This is the great debate for sellers in today’s fast changing world. We’re caught in this age of time where we have these extremely powerful technologically based tools, but real estate is still very much a local business. In todays world, most sellers have the choice to hire either the broker who only does business in one or two zip codes or the agent who covers huge geographies. So, who’s better? What’s the difference between the two? In this blog we will answer these questions and discuss where we think things are headed.
Once upon a time there was an MLS truck that used to deliver what looked like a phone book every morning to every real estate office. Agents used to flip through these phone books every day to see all the new properties to hit the market. They would memorize the inventory and study what went into contract and what sold. Consumers used to have to actually go to those real estate offices and meet with agents who had these books, just to see what was new on the market. This was a time when realtors held all the cards. They held all the data with regards to what was actually on the MLS, because it was not available direct to consumer on the internet. This is how your “neighborhood realtor” came to be. At this time, agents could only know and consume the data that existed in their town because it was in their head by memory, and the book was as thick as the yellow pages.
A neighborhood realtor certainly has some advantages. They know all of the little nuances of the neighborhood. They know every block, every park, every school, nearby shopping locations, etc. Their business model is to list as much property in a specific neighborhood as possible and try to corner the market. If they can list a good majority of homes in that market, then they’ll also get a chance at representing buyers in that market who came to see their listings unrepresented. They also try and move those buyers into the inventory that they hold as a way for them to be able to sell off their own listings. While this method of selling homes works, some would consider it passive. The basis of this entire method of selling property is that your listings are the “bait” for buyers. Most agents that run this model are leveraging their listings to generate more business, without carrying any marketing expenses (other than the content they generated for the listing itself).
There is this new breed of listing agents, that are technologically inclined. They understand digital marketing, and are leveraging it to cover wider geographic areas and get their sellers more exposure. People today are spending a disproportionate amount of time on our digital devices. Whether it be your iPad, iPhone, Samsung galaxy, etc. – the world is at your fingertips with these devices. Need a stock quote? An answer to any question in the world? Need to tell a friend you miss them? Want to congratulate someone on a job well done? Listen to your favorite song? All of these things can be done instantaneously on these devices. This is why our world relies on them so heavily, they’re your one stop shop to everything – including shopping for homes.
So how are these new age agents leveraging this technology? In the world of marketing, nothing is more powerful than the digital strategies that exist today. Social platforms such as Facebook, Instagram, Snapchat, Linkedin, etc – are mining our data everywhere you go on that device. With that being said, they know when you’re in the market to buy or sell a home. So, these agents are tapping into this technology to build profiles of people who they think will be a fit for their listings – and then they’re marketing their listings directly to these consumers. With this strategy, you can reach people all over the geography of your choice that fit the criteria for someone who’s interested in buying the house your selling. You can get outside of the town the house is in, and market to people coming from the city and moving to the suburbs. Your reach expands to a much broader demographic, and you can pinpoint people who are specifically looking to search for homes like yours. The one caveat that exists with this form of marketing is that it costs money. Most agents are cautious about investing a significant amount of money into running these ads, with the fear that the house may not sell. This is why the more successful agents are using this method, because they sell the volume needed to be able to have a significant marketing budget for a home.
Furthermore – a realtor who does business in multiple places may be a member of multiple real estate boards. There is an NAR statistic that 90% of buyers are represented by a realtor. In a geography like Long Island, we know that a lot of our buyers are coming from the city. The city is a completely different real estate board from Long Island. If you’re an agent who is actively involved in multiple real estate boards where the buyers are moving between these two places, then you have a higher chance of finding a buyer through the other boards. An email to 30,000+ realtors in the city for a property that’s for sale in a commuter town on Long Island will 100% garner their attention and possibly a response with an interested buyer.
In the future, I believe that you’ll only see teams of agents who cover huge geographies. Its already happening now, as the highest performing teams are covering multiple cities in different corners of the county. The neighborhood realtor still has a significant place in todays market, but as people start to understand this technology things are going to change. People will prefer that their home have its own marketing budget that drives ads in front of viable buyers across a 50-mile geography leaving no stone un-turned. For now, some people are still concerned about being able to sell a neighborhood – but quite frankly that’s something that can be done after a quick conversation with the seller. The ability to cast a wide net, push as much traffic through the door as possible, and generate offers through technology will soon supersede the local knowledge of the neighborhood realtor.