What are the TOP 6 Reasons Realtor’s phone will not ring in 2019 due to the Shift?
We are most expecting a Shift like last time meaning the Shift (2006-2010) meaning less volume and lower sales prices eating at our commissions. Yet, but this time I don’t expect those 2 effects to be as severe, but I do expect more and different impacts comprising the SHIFT, which may not recover in the future years, as we did last time as the volume returned! See the top 6 reasons below.
- Reduction in force – Teams are upping their game and individuals chose independence over comradery, the following list comes with commission compression caused by these forces reducing deals through referrals, once lining their pockets, putting pressure for the individual agent to look elsewhere for income as skill set lags and objections change and phone rings less! Teams are gobbling up the business by training, marketing and focusing on their skill set more by training produced by Elite Agents vs Broker who have not recently sold homes in the current market.
- Your sphere shops online – Before they contact a friend/relative and the RELATIONSHIP referral loses to a partnership or value added realtor- The focus of this one is that your past clients and friends first call for real estate used to be you, now they begin online and get “Syrupped IN” meaning they do a lot of searching on their own and get involved in a deal involved with another agent or builder before even thinking of reaching out to you! (10-15% of past referrals lost to this)
- PEOPLE BELIEVE THE INTERNET – (PBTI will cause 10-15% reduction of referrals you once received) Google your name, then go to the neighborhood you sell most and search on Zillow, Trulia, Realtor.com, YahooHomes, Rocket homes! If your internet presence is not close to the experience they believe they can get from what they found online, you don’t get the call! Book will be ready soon!
- RELATIONSHIP loses to a PARTNERSHIP – (Zillow, Realtor.com,YahooHomes, Homelight, Rocket Mortgage, Opendoor) – this is the biggest cannibalization of a Traditional Agents referrals – Aggregators listed above send their deals to their agents through paid fees or referred commissions and valid their elite status whether true or not but either way they are referred strongly before you get the call. (15%-20%)
- RISE OF LOW COST HIGH SERVICE – The volume is at the low end and unfortunately Traditional Agents have not worked to improve their market of homes from 5-10 years ago leaving it up to syndication to sell their homes and therefore other agents to sell their houses when clearly the consumer is searching on their own. This has allowed low cost-high service MODELS (meaning their marketing plan looks like yours) like Redfin, PurpleBricks, Homie, OpenDoor, OfferPAD and many provide the similar level of service as Traditional agents.
- Volume will lessen, but significantly through traditional measures – In most years, except for the hottest of markets in 2004, 2005, end of 2012, to mid 2013 and 2017 and 2018, meaning super low inventory, 95% of the homes sold MLS and the traditional listing process. This is and has been changing and affect referrals (10-15% of past referrals lost)
Please note these companies mentioned and highlighted in the article are attempting to provide a high level of service to the consumer and ultimately sending their business to Realtors like you so they are not the enemy but do represent the Shift that will threaten the Traditional Agents and Broker practice and income more forward!