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Depending on who you listen to, it’s all doom and gloom for agents in the coming years. From no transactions to disruption, it certainly seems like the future is a bleak one. But some agents and industry leaders are more focused on solutions than prepping their heads for the chopping block.
Disruption is one of the industry’s favourite buzzwords, but nobody can quite agree on the shape it will take if, or when, it comes. In a recent REINSW panel, fice prominent industry members discussed the future of the industry and how agents could improve their chances of survival.
“If we’re complacent, lazy and naive then we won’t just be disrupted, we’ll be made redundant,” said Starr Partners CEO Doug Driscoll.
One of the possible issues for agents discussed on the panel was decreasing fees, Morton Real Estate managing director Ewan Morton said their business has already begun discussing their survival on a one per cent fee structure.
“Certainly in our business we’ve started to talk about what will we do if fees are 1 per cent, how will we make money? I think that’s a question everyone in the industry needs to ask. People are holding their houses for longer, so we could be the best prospectors and nurturers in the world to hold on to that relationship for 20 years. Now we need to ask the question of what else can we do with that person over that 20 years with the end game being them selling the house,” said Mr Morton.
BresicWhitney director Shannan Whitney agreed with this outlook, “I think we have to accept that the fee for what we do now will be dramatically less.”
“From a business owner’s point of view if you have a business model which is fee for service and that is dramatically cut, you’ll end up with a different business and a different landscape and, I think, we’ll end up with a vastly different industry,” said Mr Whitney.
So where to from decreased fees? Adding value to your clients in other ways is the answer, and it’s time agents started reassessing their role in the industry, said the panel.
“The traditional real estate agent today is still unsure what their value is ... we’re still of the belief that the vendor is the one we need to add value to, however we [need to] deliver value to a buyer and understand what they need. We have completely forgotten about the buyer and the buyer is the most important person in that transaction. As a result, when the vendor decides they want to sell, the first place they go is a website because they deliver more value than us,” said Mr Whitney.
Agents need to get back to basics and understand the product they are actually selling, said LJ Hooker’s head of real estate Chris Mourd, something the current crop of agents climbing the ranks aren’t placing enough focus on.
“We used to know a whole lot more about the product, new agents coming on board now are clueless about those things and we need to get back into understanding that,” he said.
Mr Mourd also cautioned on agencies selling out to big corporations, he said that the emotional side of real estate was where agents come into value and “the danger of big corporations owning chunks of the industry is it [focuses on] providing benefits to the shareholders rather than providing benefits to our customers”.
The customer relationship, and focusing on providing benefit to both the buyer and the seller, while still maintaining an emotional connection, was the best way for agents to protect themselves against any coming disruption agreed the panel.
“The good news is that we hold customer relationships. The question’s going to be what we sell that customer, be it services or product,” said Mr Morton.
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