Monday, July 20, 2009

Missing Link: polarization of real estate groups (part-1)

Generally speaking, people are usually divided into two groups when dealing with technologies. The “Baby Boomers”, who are middle age + who are well short of being experts in technology, and the “Generation X’s”, who are the younger generation who’s very in tune with technology and social media.The real estate industry is really no different; it has people who are traditional Realtors, and then there are others who are active in many internet communities, from Activerain, Facebook, BarCamps, Inamn, and even Tech South. The problem I see right now is 1) the polarization between the two groups and 2) the forgotten group who’s fit’s neither in these categories and are desperately trying to find their identity.

Maybe problem is too strong of a word, but definitely an unresolved issue. First, let’s talk about polarization between the two groups of “Baby Boomers” and the “Generation Xs” in the real estate industry. As all of you know, the real estate industry has a very low barrier of entry which entices many people to pursue a career in this field. Because of this, many, many people pursue a career in real estate only to struggle to get started. Sellers and buyers, want more “established” Realtors, and the combination of two situations have created a subset of “super-agents” who comprise of 10-20% of the population but earning 80-90% of the overall profits. I’m not concerned with the uneven distribution of money (this is capitalism and I’m all for it), but rather that the 10-20% of the population seem to be the ones who are NOT connected to those who will lead the real estate industry in the future; specifically, those you see frequently in Activerain, Facebook, BarCamps, Inman, and Tech South. Therefore, we’re in danger of losing some great insights and information from these “super-agents.” We’re in an information age, and these “super-agents” have great knowledge and information about the real estate industry, both locally and nationally. While we do have some representatives who connects to both worlds but that connection is too limited.

I was recently at NVAR’s social media panel and sat next to a broker (we’ll call him John Doe) who was interested in this social media buzz and wanted to learn about it; more importantly, John wanted to learn how this would help his business. As a former financial analyst, I quickly recognized his analytical intelligence and talked to him through out the session. One of which was the effectiveness of social media in terms of sales. During the panel, he downloaded all the “experts” business performed in 2008 and 2009. He then turned to me and said “if I sell the same amount the panel members do then I’d go broke. I’d have to combine all their sales volume to meet mine.” A shocking statement when you consider that the panelists were very well known in the social media and real estate community, and sell quite a few homes. I then tried to explain to him the segmentation of home buyers and sellers; specifically that majority of the panel’s businesses come from the internet world, while John’s business comes from the traditional world. Therefore, customers gained through the social media are not from the same group of people that John’s current business comes from. Meaning, cannibalization would not occur and his aggregate sales volume would actually be compounding sales not supplementary sales. John agreed, but then said “but why would I re-invent the wheel?” His main concern was why not just be great at what he does now and not change? I wanted to disagree with his comment sooooooo much!....But I couldn’t. John’s in his mid 50’s and he could probably continue doing what he does and be very successful until he retires.

John’s not the only agent who feels this way; I know many others including a former GCAAR Realtor of the year. Many of us would identify these people as “disconnected”, but they are very much connected……..with each other….the ones who generate majority of the sales.

The issue, as I see it, is the lost knowledge from these “super-agents” to those who’s building the industry. Information is very powerful and I don’t see many connections bridging the two groups. I’m not saying there aren’t any, but we need more. One can argue that the real estate industry isn’t that difficult so we really don’t need to bridge that gap. However, isn’t the real estate industry like everything else? Easy to learn and difficult to master? We can learn 90% of the business quickly but getting to that 99% is very, very difficult. That’s why I’d love to hear people’s views: first, is this a problem? Second, if so, then how do we solve this problem?

In part 2, I’ll discuss the “forgotten group.” They’re not quite young enough to be a “Gen X” and they’re not quite old enough to be the “Baby Boomers”; they’re not completely disconnected from technology, nor are they connected 24/7. How these agents adapting to the changing industry and how these clients are selecting agents? - Real Video Tours; not just flying photos.

No comments:

Post a Comment