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Still Not Sure How Important The Internet Is In Real Estate Sales?

Published by Barry Cunningham September 15th, 2008 in Marketing tips.

This is Barry Cunningham’s (co-host of RealEstateRadio) first guest post on Sellsius. There are many things I love about Barry. Heading the list is his fearlessness in expressing his opinion, even if it runs contrary to the (so-called) wisdom of the crowd. And while others might hide behind a comment policy to censor opposition, in the name of living room civility, Barry is just as fearless in defending his position against all comers. As readers of this blog know, I am an advocate of free speech– free speech as defined by the Constitution, not my living room (besides, you’d have to take your shoes off to comment). I do not whitewash people’s words, or judge them on niceness, to “protect” contributors. Why? Because free speech is not a right reserved only for those with good manners. Besides, contributors are not in need of my protection (how parochial), certainly not Barry.

Anyhoo, here’s Barry’s post:

The California Association Of Realtors recently released their “2008 Survey of California Home Buyers”. The data found in this survey isn’t all that astounding to those who have actually been using such information to improve their business. However it further underscores how many real estate agents are out of touch with reality in regards to what today’s consumer wants and expects.

I can hear it now. The stubborn cold-calling, door knocking old school, 3 yards and a cloud of dust, real estate agent angrily discounting the data in the survey. “It doesn’t apply to me”. “Real estate is local”. “My market is different.”

You know them, you’ve probably read their baseless, rantings on multi-agent, back-slapping, hoo-rah sites wherein no amount of data, survey results or trade information relates to them. You know them, they are the ones who still probably have AOL email addresses and may in fact still think that AOL is the Internet.

They’re the ones who are just finding out that you can take screen shots of images on your computer or believe there is “Google Juice” for “an open house this Sunday in Boise”.

If you’re still reading their blog posts and listening to what they have to say after you read this information then you deserve the lack of income you are enduring.

Does that upset you? It should! It’s time you as a real estate agent who wants to run a “business” wakes up and takes notice of what is REALLY going on in the industry.

The CAR Survey was conducted using a sample group comprised of recent homebuyers. 1,249 who used the Internet and 351 who did not and went the traditional route.

Like I said earlier, the data is not startling, but it is remarkable. Here is what the survey found:

1. Home buyers expect and want real estate agents to answer the friggin telephone or respond by email! People, can you imagine calling your local hair salon or dentist’s office or lawyer’s office and not being able to get in touch with anyone and if you do, no one returning your call?

We all know that real estate agents are some of the worst communicators on the planet. Unfortunately, the consumer knows this as well.

96 percent of Internet buyers expected a response within four hours or less…31 percent of the Internet group expected an IMMEDIATE response!

84 percent of participants ..let me say that again…84% of buyers said that they considered the agent’s response time to be either a “very important” or “extremely important” factor in their decision-making process.

I recently took 20 random listings off of the MLS and called each one of them. I called on Friday morning and Saturday morning. 40 phone calls in all. 2 agents answered their phone and only 4 called back.

Do you really think the real estate industry is slow or have agents simply given up? Until real estate agents grasp the idea of communication as a business tool, there are going to be a lot of real estate agents existing under the poverty level. This is an easy fix. You see what the consumer wants. Deliver it! Real simple. You don’t need a business coach to learn how to be accessible and answer the phone or an email!

2. “I don’t work with buyers because I’m a lister and buyer’s waste my time”. Nothing signals the label of dinosaur quicker than these words being spoken or written by a real estate agent. If you hear a real estate agent uttering these words, back away, no run away, lest you be struck by the rapidly approaching comet.

Today, gas prices across the USA are rising because of the recent hurricane. Refineries are not able to produce gas so the price goes up because the inventory can’t meet the demand. Unfortunately, in most markets across the country, the same supply and demand impact is not present.

In fact it is much to the contrary. There is so much inventory that it has dwarfed demand. So why are some “mega-producing” agents heralding the fact that they are “listers”. Doesn’t their statement pretty much mean that they don’t understand Business and Economics 101?

Now let’s look at that nutso mantra of “buyers are hard to work with” BS that we keep hearing. I have a question…too hard to work with compared to what? The NAR says that the average buyer’s agent spends 14 or so hours with a buyer. So just what is the buyer taking you away from? Oprah? Dr. Phil? You’re other job?

The fact is that the recent CAR study shows that “Traditional” buyers take as much as 10.3 weeks searching for a home and wanted to see almost twice as many homes with their agent (23.3 homes) as Internet buyers (12.7 homes).

200% more, twice the amount of work…Hello McFly!! , I ask again. Buyers are too much work? Maybe you are working with the wrong buyers!

3. Today’s consumer is not satisfied with the performance of their real estate agent. Again, not surprising. In the CAR survey, customer satisfaction with the home-buyer process dropped in EVERY category and dropped 16% from the preceding survey last year. Wow!

Almost 80 percent of those who were not happy with their agent’s performance said the agent “did not negotiate aggressively on their behalf”. That’s completely understandable since most real estate agents are not trained negotiators.

I recently watched a David Knox video and he amusingly pointed out in one of his workshops, that going back and forth with counter-offers is NOT negotiating. Don’t you think if you are going to be in this business that you might want to learn some negotiating skills?

Watch Divorce Court or re-runs of L.A. Law..do something! If you’re not going to learn how to properly negotiate then you are doing a disservice to your soon to be former client. I can’t tell you how many times I have heard a real estate agent tell me how “insulted they were by my low ball offer”. No…what’s insulting is that you don’t know how to negotiate aggressively and you expose yourself as an amateur by making such an utterance.

Why do I say “soon to be former client”? The CAR survey found that only 71 percent of the Internet buyers would use the same agent again. That would not be all that bad except for the fact that this is down 21% from the same period last year.

If you think that’s bad, it only gets WORSE when you speak to traditional buyers. Among the “traditional” buyers, only 27 percent reported they would use the same agent again…which is down 20% from last year and down an alarming 52% from 2005.

Business people do not ignore this kind of data. However, many real estate agents will.

3. You need a well marketed, SEO intensive Blog or website if you are going to survive as a real estate agent. There it’s said. It’s in black and white. What are you going to do about it! Going to keep hanging out singing Kumbayah on some mass agent community network or are you going to actually up your game and get your site up to today’s standards. Your choice but guess which agents are going to succeed?

Homebuyers who used the Internet in the home-buying process reported that the first Web site they visited was Google (40 percent), followed by Realtor.com (28 percent), Yahoo Real Estate (8 percent), and Zillow (5 percent). Four percent reported that they first visited the Web site “of a home that I was interested in,” while 3 percent reported that Craigslist.org was the first site they visited and 13 percent were unsure.

Hmmm, when 40% of the market is using Google to find homes just what do you think they were searching for? If you have to think too hard for the answer you may already be lost!

They’re not looking at single property websites, they’re not looking at your broker’s website, they are not looking at your company’s main website. 33% of respondents cited an individual real estate agent’s Web site was cited as the most useful Web site during the home-buying process.

4. Yard sign calls, brochures, pamphlets and the like are of little or no interest to today’s consumer. They won’t deliver you business! The survey found that 90 percent of buyers in the Internet group found their real estate agent using the Internet, while just 9 percent found their agent through a for-sale sign and 1 percent through an agent’s marketing materials.

Ok, so what are you going to do with this information? We already know that most will discount it as it not being relevant to their endeavors. Some won’t believe it and others won’t even know how to respond. That’s fine.

It’s the others out there that this is written for. That small percentage of maverick real estate agents who use contemporary data and means to actually run a real estate business. You know who you are. Take this data and run with it. You are and will continue to distance yourself from the pack and this survey confirms you are on the right track.

For the rest of you, please, by all means, continue with your ignorance and old school methodology. It’s expected and counted on. Seriously, how else are we in the New World Order of Real Estate going to overtake you if not for your ignorance.

For that, we thank you.

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  • Thank you for your post, Barry.
  • Recently the Real Estate Commissioner in Georgia was talking about some of the most frequent filings against agents in the state. The most common complaint was the lack of communication from the clients agent. I think that can even be taken further, if an agent is not going to give feedback on a listing they have shown they should not be allowed to show the listing.

    For the agents who don't want to work with buyers in the Atlanta Market just send them to me. I'll be happy to pay you a referral fee. On the other hand thank goodness my site is well optimized and generating quite a bit of traffic itself.

    Thanks for the article Barry.
  • Joe thanks for the opportunity and Mack I appreciate your comments! By the way...your website looks great!
  • "Facts don't cease to exist because they are ignored"

    Aldous Huxley
  • Indeed, those real estate agents that do not embrace the internet is going the way of the dinosaurs. In Singapore where I live, the use of internet for property hunting is very much alive with good websites like StreetSine. Many agents are using the such portals to meet new clients and close deals faster than the traditional route.
  • http://www.longbeachrealestatehome.com/thinking...

    Hmmmmm, I got a little carried away with this one. CAR, and you, hit a few of my hot spots.
  • AMEN...I love when my clients contact me through my blog/website, they are so much better informed and usually know what they want. To illustrate you article: once I got a listings because I was the only agent who returned their call. Whew that was hard!
    Janice
  • 40% of buyers started their home search with Google

    I learned this on my summer vacation:
    http://tinyurl.com/3w4u5e
  • Just read about Joe's summer vacation. You are a man ahead of you're time.

    Read Lauroe's post too. Any wonder she is LAURIE MANNY? She rocks!
  • Sorry for misspelling Laurie's name..big fingers!
  • The sad truth in this is that by the time many wake up and realize what's going on, others will have gained such a strong internet presence it will be very difficult to catch up. As for answering the phone, I'll admit I'm guilty on that score. I refuse to answer the phone if I'm with someone. It's rude.
  • There exist marketing channels everywhere-- online and off. There are traditional ones and others that may require a little creativity to stand you out from the crowd. Personally, I believe a bunch of For Sale and Sold signs, with your name on it, are much more powerful marketing tools than any online Q&A; forum-- by far. Old school is still school.

    The trick is leveraging as many marketing channels as possible, with the objective of getting a transactional visitor to your website, or, better yet, a telephone call. Then comes the hard parts, the parts only professionals can pull off-- the conversion of lead/prospect to client and then a closed transaction. These are what you take to the bank. Marketing is not sales. Learn how to convert.
  • Yes, Laurie does rock.
  • Colleen,

    You said "As for answering the phone, I’ll admit I’m guilty on that score. I refuse to answer the phone if I’m with someone. It’s rude."

    I don't either. I also don't answer when I am taking a shower, and am often already on the phone with somebody else. But I'll bet you return those calls, as I do. That's the difference.

    Nobody can answer every call, every time.

    I called somebody back recently, who called while I was already on the phone, he informed me that he had already contacted an agent and was going to work with them. I called him back in under 10 minutes. We cannot be all things to all people. It is going to happen, it is the nature of our business.
  • Joe,

    It is true that local traffic can be driven to a site through traditional methods. My website is a prime example of that, all past traffic to it was locally driven through my past marketing and advertising efforts. Having moved that site onto a blog with a static front page recently the traffic has gone up considerably. So now I have the local base that was already built and the internet exposure which is building the site further. It is no competition for my blog - yet - but it may be! The combination was healthy for this site.
  • Laurie, I too recently moved my site to a blog site and not only has traffic increased, but increased stckiness considerably! And yes...I do return calls IF they leave a message.
  • I haven't seen the CAR one, but I have brought the NAR profile of home buyers and sellers to listing appointments all of the time. People are stunned when they see the numbers.

    On a side note...


    Matt said: I think that can even be taken further, if an agent is not going to give feedback on a listing they have shown they should not be allowed to show the listing.


    While I typically give feedback, I don't think it's appropriate for agents to ask me "how do I need to price my home to sell?" I mean there is feedback "house is too dated for my clients" and then there is telling someone how to do their job. If listing agents take overpriced listings, or don't have the skills to tell people "your house stinks" or "take down the rooster wallpaper" I'm not sure I want to help perpetuate incompetance by offering them free advice.
  • Melina, I didn't say "how do I need to price my home to sell". I said I was asking for your professional opinion of the home. Two sets of eyes are better than one.
  • Barry,

    I ran into the opposite when I arrived in Seattle in 2004, and still hear it today. Many if not most agents didn't want to list at all, and only wanted to work with buyers. I quickly realized it was because those with licenses for 2-3 years needed an asking price and didn't know how to value a home from scratch.

    Agent training rarely includes "How to value a house from scratch to set an asking price". Most wanted to grab the buyer by the hand, open the door and write up a full price offer with an escalation clause.

    This changing market, which has just started changing here in Seattle, is leaving many agents who are ONLY tech savvy and have no basic traditional skills...in the dust. Many came into real estate from the tech industry and had all the tech stuff down...it was basic real estate skills that were lacking.

    Balance is key. With volume of sales down by 40%, being ONLY tech savvy is not going to work either. In fact the tech savvy buyers are the ones standing on the sidelines moreso than those who find an agent by traditional means. Divisification of effort is more important today than ever and putting all your eggs in either basket, old vs. new methods, is going to leave your glass half empty.

    Agents look at me like I have two heads when I tell them that most of my client emails total in the thousands by close of escrow, and none are less than many hundreds of emails. Talking on the phone is almost passe. This I know from my daughters who most often communicate with me by text message.

    But when the market turns to a higher % of empty nesters being the buyers and sellers, as often happens in any market this time of year, you better know how to do it ALL. Leaving any stone unturned in today's real estate market, which is at half mast any way you slice it, will be a mistake in hindsight.
  • Yes the internet is the main driver of inquires, I would guess.
  • Barry; You hit the nail right on the head when you say that communication is key - The first one back to the customer with what they need wins almost every time. Very Old School though :-)

    But then, I have to admit I'm a little confused - The CAR study says there is a high number of people looking on the Internet, but Joe's post about his summer vacation makes the point that he thinks the lower number published in an earlier survey by NAR is too high and is suspect because of the survey's methodology- so which is it?

    Or could it be that the 40% number weas misunderstood? I understood it to read that 40% of the people who were using the Internet started there search at Google - maing it the largest starting point , and making Barry's point about Blogging being importnant (since Google loves Blogs) - did I miss something there?

    Joe:
    I agree that every marketing channel should be used - In our company we have found that when people said they "found the property on the Internet" they had often seen a website address on a sing or in some other supporting marketing material which led them to our site -

    Ardell:
    I agree with you completely. I find that new agents typically work with buyers first because they are (a) more accessible and (b) are a source of faster money (since the commissions comes quickly after a sales is made, while listings don't pay until after they have been marketed for a bit - then add the time to closing) - But I think anyone who doesn;t work both buyers and sellers is missing opportunities -
  • When NAR CAR or any other group touts the % of folks using the net, they never say it's exclusively where they look-- because it's not.

    Based on my 10,000 mile trek across the country and 30+ cities, talking to the man and woman on the street, as well as agents and internet companies, the internet is only one way folks investigate home buying or selling. People still drive the neighborhood and read signs, they go to open houses, read the glossy real estate porn mags that come in the mail, they read billboards and bus stop ads, they watch tv, listen to radio, read magazines ...
    in some towns & cities, they even read the newspaper classifieds.

    Old school is still school and still works. So don't abandon it for the lure of the net (unless you can't afford it, in which case you should go guerilla). If anything, be more creative in finding ways to connect with folks offline.

    Build your brand. Give consumers value they can taste. Use repetition. http://www.nextmediagroup.net/images/home-homev...
    Host free seminars. Give away stuff (not junk). Get involved in your community. Do charity. Do meetup.com. Sponsor a kid's team. Market to must buy or must sell folks-- newly married, divorced or dead (Proctor's play book). Find out what successful people are doing (Tony Robert's school). Find your blue ocean. http://en.wikipedia.org/wiki/Blue_Ocean_Strategy
    Geez, there are so many offline marketing channels to get you b2b. I'll take face-to-face interaction over avatar to avatar any day.

    But you can't overlook the internet for its world wide reach, permanence and low cost (mostly time, which can be expensive though). You have to use online channels too. But to put all your marketing eggs in that basket may be a mistake IMO (even Zillow does print ads).

    Ideally, you ought to blend offline and online methods and find out a way to measure your results. Go with what works best for you. I know one very successful blogger who still gets his business with a low tech tool-- the telephone.

    For most folks the internet is the Google box. So SEO is important if you're going to work the net. So is distribution/syndication (content is not king). But so is brand. You'd rather folks type your name in that box than Zillow's (unless you own your local market on Zillow).

    But in the end, the best communicator (not writer) and quickest to respond, regardless of which marketing method brought the prospect, usually makes more trips to the bank.

    While I agree, Bill, that generally, you want a mix of sellers and buyers, market conditions may dictate a mix that favors one over the other. In a very slow market, I'd say weight buyers over sellers.
  • Glad to see Barry here. I was getting bored.
  • Me too. Barry is Mr. Blogcitement
  • For many home and condo seekers, the internet SHOULD BE the first place they look. We are in a digital age after all. I don't think many people enjoy reading as much as they used to, and therefore would not stare at a magazine or brochure for hours reading tiny print. Instead, buyers could go on the internet and SEE what they are thinking about purchasing. Seeing = limited reading required. Many real estate websites such as Expert Realty get tons of traffic to their site because of all of the pictures and helpful information about the housing and condo communities. I think business would skyrocket if more real estate companies focused their efforts on the internet.
  • In Singapore, most real-estate agents now promote their property through online classifieds. There's simply just no other way as cost-effective as free advertisements.

    ----
    Singapore Property
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