e‐Buyer:  Understanding  Real Estate e‐Buyers and 

 e‐Buyer: Understanding Real Estate e‐Buyers and How to Market to Them Instructor and Student Manual A program by the Real Estate Buyer’s Agent Council, Inc. of the National Association of REALTORS® e‐Buyer Copyright © 2008, Real Estate Buyer’s Agent Council, Inc. IMPORTANT NOTE: The Real Estate Buyer’s Agent Council, Inc. (“REBAC”) and National Association of REALTORS® (“NAR”), their faculty, agents and employees are not engaged in rendering legal, accounting, financial, tax, or other professional services through these course materials. If legal advice or other expert assistance is required, the student should seek competent professional advice, including legal advice from those who are familiar with relevant local and state laws. REBAC and NAR do not endorse the Web sites, products or services listed in this course and shall not have any liability for the accuracy, completeness, usefulness, performance or reliability of same. REBAC and NAR recommend that brokers and agents evaluate each such Web site, product and service themselves to determine whether they will meet their particular business needs before making a purchase or relying upon them. Real Estate Buyer’s Agent Council, Inc. 430 North Michigan Avenue Chicago, Illinois 60611 USA Phone: 800‐648‐6224 E‐mail: [email protected] Web site: www.rebac.net ii Acknowledgments The Real Estate Buyer’s Agent Council (REBAC) expresses gratitude and appreciation to Melanie J. McLane, ABR®, CRS, CRB, GRI, OA, ITI, RAA, SRES®, ePRO, and Amy Chorew. The revision of this course would not have been possible without Melanie and Amy's collective expertise, insight, and experience. iii
About REBAC – The Real Estate Buyer’s Agent Council, Inc. About the ABR® Designation The Real Estate Buyer’s Agent Council, REBAC, of the National ®
Association of REALTORS promotes superior buyer representation skills and services. REBAC’s membership numbers more than 50,000 and is the world’s largest organization of real estate professionals concentrating on buyer representation. Members who meet all course and professional experiential ®
requirements are awarded the ABR (Accredited Buyer’s SM
Representative) and/or ABRM (Accredited Buyer’s Representative Manager) designation(s). Both are the only designations of their type recognized by NAR. The Accredited Buyer’s Representative (ABR®) designation is the “benchmark of excellence in buyer representation.” The Real Estate Buyer’s Agent Council, Inc. (REBAC) of the National ®
Association of REALTORS awards this coveted designation to REALTORS® who meet the specified educational and practical experience criteria. REBAC Membership Benefits ƒ
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listing in REBAC’s online membership directory at www.rebac.net. Today’s Buyer’s Rep, REBAC’s award‐winning monthly newsletter. The Real Estate Professional, a bi‐monthly trade magazine covering the entire spectrum of the real estate industry. bi‐annual CD‐ROMs containing fresh, relevant topics. weekly HotSheet e‐mail newsletter marketing tools such as REBAC logos for print media, marketing brochures and REBAC’s Home Buyer’s Kit. REBAC Day, at the annual NAR National Conference and Expo. national consumer awareness marketing campaign plus, new benefits and membership enhancements added each year ABR Candidacy ®
The first step in becoming an ABR designee is to become ®
candidate by successfully completing the ABR designation course. Candidates must maintain membership in the National Association of REALTORS® and REBAC. A free one‐year ®
membership in REBAC is included with registration for the ABR designation course. Thereafter, dues are $110 per year. Candidates have three years (from successful completion of this ®
ABR designation course) to fulfill the designation requirements. Candidates who do not complete the designation requirements within the three‐year time frame must start over. REBAC Benefits ƒ
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All REBAC membership benefits ƒ
Discounts on products and services for your buyer representative business. ƒ
Information on the buyer representation trends and influences Consumer and industry respect and recognition Tools to help you promote your business to consumers and other real estate professionals. New designees receive Welcome Packet that includes a: ƒ
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Letter of recognition Designation lapel pin Certificate Press release for local media ®
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Note: ABR candidates cannot use the ABR logo or refer to ®
themselves as an ABR ‐designated buyer’s representative. Only ®
REALTORS who have met all requirements for the designation and are active members of NAR and REBAC are permitted to call ®
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themselves an ABR designee and use the ABR logo. Follow tthese steps to Accredited Buyyer’s Representative Managersm A
or owners, brokers, and managers who d
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he ABR® Designaation course, including an 80% passing grad
de on the written exam. Complete one elective courrse Submit docu
umentation, verrifying five comp
pleted buyer ‘s representattive transactionss Maintain membership in the National Asssociation of REA
ALTORS® and REBAC Who should
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o want to enhancce their buyer reepresentation skills, and demonstrate proficiency in servin
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Accredited Buye
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designation can be awarded to real estate profeessionals who d
do not actively r
represent buyerss, list, or sell; candidates m
must submit a le
etter from the m
managing broker, written on c
company letterh
head, attesting tto such and the ttransaction v
verification requ
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designation, tran
nsaction documentation is requ
uired. Eleective courses Go to www.C
CourseCalendar.com for coursse dates and locations ƒ
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e‐Buyeer Innovaative Marketingg for Buyer’s Reps Foreclo
osure: Prevention and Opportunities for Buyeer‐
Clientss Successsful Buyer Representation in N
New‐Home Salees Successsful Relocation
n Representation Seniors Real Estate Sp
pecialist (SRES®
®) Designation Coursee Introduction to Real EEstate Auction ƒ
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Brokerage (RLI) Land 101: Fundamentals of Land B
Effeective Negotiating for Real Estaate Professionaals (WC
CR) Harnessing the Pow
wer (WCR) Resort and Second‐Home Marketss CIPSS I: Essentials of International Real Estate Creaating Wealth th
hrough Residenttial Real Estate Inveestment (CRS 20
04) e‐PR
RO = availab
ble as online course through REALTOR® Univeersity v
e‐Buyer Table of Contents Introduction………………………………………………………………………………………………………………………….. 1 Real Estate Agent as Gatekeeper…………………………………………………………………………………………………. 1 Fast Forward to Today…………………………………………………………………………………………………………………..1 1. Understanding the e‐Buyer………………………………………………………………………………………………………… 3 Profiling the e‐Buyer……………………………………………………………………………………………………………………. 3 Taking a Closer Look at the Real Estate e‐Buyer………………………………………………………………………….. 4 Not All e‐Buyers Are Created Equally…………………………………………………………………………………………… 9 2. Service and Value in an e‐Buyer World………………………………………………………………………………………14 Defining Service…………………………………………………………………………………………………………………………..14 Services Do Not Equal Value………………………………………………………………………………………………………. 15 Managing Expectations………………………………………………………………………………………………………………. 18 Handling Objections…………………………………………………………………………………………………………………….20 Maintaining a High‐Touch Transaction………………………………………………………………………………………..21 3. Web Fundamentals……………………………………………………………………………………………………………………22 Web Site Best Practices……………………………………………………………………………………………………………... 24 Fine‐tuning Your Web Practices…………………………………………………………………………………………………. 30 4. Tools of the Trade: Advancing Your Business…………………………………………………………………………… 33 Smart Phones……………………………………………………………………………………………………………………………… 33 Additional Technology Tools………………………………………………………………………………………………………. 34 Web 2.0 Tools………………………………………………………………………………………………………………………………35 5. The e‐Buyer Transaction…………………………………………………………………………………………………………… 42 How the e‐Buyer Finds You………………………………………………………………………………………………………… 42 Where Do Our Leads Come From?………………………………………………………………………………………………43 Establishing the Agency Relationship…………………………………………………………………………………………. 43 Managing the Lead…………………………………………………………………………………………………………………….. 44 Moving from Online to In the House…………………………………………………………………………………………..46 The Contract………………………………………………………………………………………………………………………………. 47 Getting the Transaction to Closing…………………………………………………………………………………………….. 49 After Closing………………………………………………………………………………………………………………………………..50 Follow Up…………………………………………………………………………………………………………………………………… 50 6. Your Action Plan………………………………………………………………………………………………………………………. 52 vi
Introduction Introduction REAL ESTATE AGENT AS GATEKEEPER Until the mid to late 1990s, real estate agents could be described as gatekeepers of the real estate transaction. Without a real estate agent, a buyer had little chance of completing a real estate transaction, let alone accessing the multiple‐listing service (MLS) to view properties for sale. In truth, the buyer depended on the real estate agent for everything: • Property data • General information about an area • Finding and pre‐qualifying for a mortgage The buyer wanted only to be involved in the selection process, and then depended upon the real estate agent to handle all of the details. Slide 4 FAST FORWARD TO TODAY Fast forward more than 10 years, and the Internet and electronic business or e‐business have spawned the electronic buyer or e‐Buyer. The e‐Buyer uses the Internet to find properties, research communities, preview properties (inside and out), become familiar with pricing, and get pre‐
approved for a mortgage. In many locales, today's e‐Buyer can use the Internet to review courthouse data. In addition, the Internet and e‐commerce have transformed the e‐Buyer's expectations of how transactions are completed. To e‐Buyers, transactions should be easy, quick, and less expensive. Given current market conditions—the national tightening of underwriting standards, the negative media coverage of the U.S. economy, and, depending on your market, the rate of foreclosures and lagging home sales—we've got fewer buyers than a year ago. So where does this leave today's buyer's agent and the real estate transaction? Will the Internet and U.S. economic ups and downs render the buyer's agent obsolete? The answer is hardly. Because buying real estate is a sophisticated transaction and not easily or comprehensively standardized, the vast majority of consumers will contract with real estate professionals to guide them through the real estate transaction. Buyer's agents who leverage technology to serve their business objectives, who seek advanced training and education, and who specialize in representing the interests of multiple groups of buyers (first‐time buyers, second‐home buyers, buyer‐investors, 1 Slide 5 Slide 6 Slide 7 Slide 8 e‐Buyer international buyers, buyers of foreclosure or auction properties, for example) will continue to thrive. However, the e‐Buyer is a specialized consumer and has specific needs. As you will learn today, buyer's agents are under pressure now more than ever to bring value to the real estate transaction for generations of e‐
Buyers. LEARNING OBJECTIVES FOR THIS COURSE Slide 9 DISCUSS the fears many students have about technology—that it will replace them, cause them to earn less money, etc. Most students do not know how to bring value to the transaction. Value is brought to the transaction by knowledge, experience, negotiation skills, all delivered by exemplary service, which we will address in this course. After completing this course, you should be able to: • Understand the specific needs of today’s e‐Buyers • Explain how to bring service and value to e‐Buyers • Discuss how to leverage technology in today’s market • Learn how to manage the e‐Buyer transaction Throughout this course, we will address such questions as: • How do we find e‐Buyers and acquire their business? • How do we transition online and offline customers into the for‐life mode (the process of maintaining the relationship through the entire home ownership lifecycle)? • What are the opportunities and associated challenges for real estate professionals in this constantly evolving business environment? The answers to these questions create a clear message for forward‐
thinking real estate professionals: New “e‐Home buyers” shopping in the new “electronic real estate market” constitute a growing segment too significant to ignore. 2 1. Understanding the e‐Buyer 1. Understanding the e‐Buyer In this module: • Profiling the e‐Buyer • Demographics of the real estate e‐Buyer • Generational differences of real estate e‐Buyers Slide 10 PROFILING THE E‐BUYER So what assumptions can we make of today's electronic buyers or e‐
Buyers? If the 2007 Pew Internet Project regarding online shopping is any indication, today's e‐Buyers are likely to1: • Be 50 years and younger • Have college education • Have a household income greater than $40,000 • Live in the suburbs For a look at more results from this study, see Figure 1. Slide 11 1
Pew Internet & American Life Project. Online Shopping. February 13, 2008. Available at: http://www.pewinternet.org. 3 e‐Buyer Figure 1: Profile of Internet Users Who Have Purchased a Product Online Gender Male Female Age 18‐29 30‐49 50‐64 65 and older Education Less than high school High school grad Some college College + Household income Under $25K $25K‐$40K $40K‐$60K $60K‐$100K Over $100K Don't know/refused Region Urban Suburban Rural EXPLAIN that adults with less than a high school education are less likely to be e‐
Buyers. This is EXAM question 1. Percent 49 51 26 46 23 6 6 29 25 39 13 12 17 22 19 17 25 50 14 Source: Adapted from Pew Internet & American Life Project Survey. Online Shopping. Note: n=1,684 for Internet users. Margin of error is +/‐ 3 points. TAKING A CLOSER LOOK AT THE REAL ESTATE E‐BUYER Now, let’s specifically look at the real estate e‐Buyer. According to the National Association of REALTORS® (NAR) 2007 Profile of Home Buyers and Sellers, one‐third of buyers looked online first when searching for properties2. However, there are some noteworthy differences 2
National Association of REALTORS®. Profile of Home Buyers and Sellers, 2007. Chicago, IL: National Association of REALTORS®; 2007. 4 1. Understanding the e‐Buyer regarding buyers who used the Internet throughout their home search versus buyers who did not. Compared to buyers who did not use the Internet, real estate e‐Buyers, on average2: • Were more likely to be a married couple • Were 15 years younger • Earned $16,500 more annually • Visited 5 more homes during their property search For a complete profile comparison, see Figure 2. Slide 12 Figure 2: Characteristics of Home Searchers, by Use of the Internet Household Composition Married couple Single female Single male Unmarried couple Other Median age Median income (2006) Length of Search (median weeks) All buyers First‐time buyers Repeat buyers Buyers using an agent Before contacting an agent Number of Homes Visited None 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 or more Median Used Internet to Search Did Not Use Internet to Search 64% 18 9 7 2 37 $76,900 53% 28 12 5 2 52 $60,400 8 10 8 8 2 6 5 6 6 1 2% 14 18 21 10 12 22 12 11% 25 20 20 8 6 10 7 POINT OUT that while real estate e‐Buyers are more educated and have higher median incomes, they spend more time searching for properties and visit more homes overall. This is EXAM question 2. Source: Reprinted with permission from National Association of REALTORS®. Profile of Home Buyers and Sellers, 2007. 5 e‐Buyer Slide 13 EXAM question 3 Slide 14 More than half (54%) of real estate e‐Buyers used multiple‐listing service (MLS) Web sites to find their home2. Additional Web sites included: • REALTOR.com (49%) • Real estate company Web sites (44%) • Real estate agent Web sites (40%) • Other Web sites with real estate listings (27%) • For‐sale‐by‐owner (FSBO) Web sites (20%) • Newspaper Web sites (12%) The "Other" category (27%) is significant because it was only 10% in 20063. This increase in this category may reflect the growing popularity of Web sites like Trulia.com and Zillow.com. An overwhelming majority of real estate e‐Buyers ranked photos and detailed information about a given property as "Very Useful," as opposed to "Somewhat Useful," "Not Useful," and "Did Not Use"2. (For a look at how other Web site features fared in the "Very Useful" category, see Figure 3.)
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National Association of REALTORS®. Profile of Home Buyers and Sellers, 2006. Chicago, IL: National Association of REALTORS®; 2006. 6 1. Understanding the e‐Buyer Figure 3: % of Real Estate e‐Buyers Who Rated Web Site Features "Very Useful" 100
84
82
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Percent
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39
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37
31
24
20
0
Photos
Detailed info Virtual tours
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Interactive
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Neighborhood Agent contact Info re recently
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Source: Reprinted with permission from National Association of REALTORS®. Profile of Home Buyers and Sellers, 2007. Consider the fact that nearly one‐third of real estate e‐Buyers found online the home they ultimately purchased2, and the marketing power of real estate Web sites cannot be overlooked. More than ever, real estate Web sites that are rich in content and property listings, including detailed property information, photos, and virtual tours, cultivate an environment in which an e‐Buyer makes an emotional connection to a specific property before contacting an agent. Real estate Web sites also can help drive e‐
Buyers to locate and contract with a real estate professional. In NAR's 2007 study, more than 80% of buyers who used the Internet to search for properties purchased the property through a real estate agent or broker2. Slide 15 7 EXPLAIN that the Internet is increasingly THE source for finding properties, jumping from 11% in NAR's 2003 study to 29% (almost a third) in 2007. e‐Buyer Slide 16 Discussion Question 1: Reviewing e‐Buyer Statistics 1. Of the statistics presented on the preceding pages, which three statistics are most meaningful to you and your business? Which three statistics will cause you to change an aspect of your business? 2. What changes will those be? 3. 8 1. Understanding the e‐Buyer NOT ALL E‐BUYERS ARE CREATED EQUALLY Slides 17‐18 Not surprisingly, different generations of real estate buyers use the Internet and other electronic systems with different frequency and for different purposes. Real estate professionals need to understand the different generations, how they use the Internet in addition to generational expectations and attitudes so that real estate professionals can deliver exceptional service and convert customers to clients—to clients for life. In the U.S., demographers group the different generations and describe them in broad terms. In this course, we will refer to: • Traditionalists (1901–1945) • Baby Boomers (1946–1964) • Gen X, 13th Generation (1965–1976) • Gen Y, Echo Boomers, Millennials, Nexters (1977–1994) In the context of buying real estate, Generations X and Y accounted for more than half of the buyers polled in NAR's 2007 study2. To see the age distribution of home buyers in the 2007 NAR study, see Figure 4. ASK who in the room is a Traditionalist, a Boomer, an Xer or a Yer. You will almost always have more Boomers than anyone else. ASK the students how these data relate to them. Listen for input. Slide 19 Slide 20 Figure 4: Age Distribution of Home Buyers 100
Percent
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13
5
5
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Source: Reprinted with permission from National Association of REALTORS®. Profile of Home Buyers and Sellers, 2007. 9 e‐Buyer Traditionalists ASK who in the room have provided their real estate services to more than one member of a given family. EXAM question 4 Slide 21 Although some demographers break Traditionalists into two distinct groups—the GI Generation and the Silent Generation—in this course, the term "Traditionalist" denotes anyone born before 1945. While Traditionalists are highly regarded for their hard work ethic, they are also characterized as being: • Conventional • Skeptical • Cautious • Aloof • Sensitive Traditionalists are less likely than younger generations to use the Internet4. Traditionalists, for example, can remember a world without today's technological conveniences, e.g., automatic teller machines (ATMs), debit cards, and the Internet—not to mention personal digital assistants (PDAs), digital video recorders (DVRs), MP3s, Bluetooth headsets, and global positioning systems (GPSs). Traditionalists are also less likely to use the Internet in searching for a home. In the 2007 NAR study, 51% of homebuyers aged 65 and older used the Internet in their home search, compared to 91% of homebuyers aged 25‐442. Unlike younger generations, Traditionalists have more experience buying and selling real estate. On average, homebuyers aged 65 and older have purchased three homes2. Traditionalists' experience is particularly important for today's real estate professional. Traditionalists are more likely than other generations to rely on agent they used previously. Traditionalists are also more likely to refer their agent to their children and grandchildren. Baby Boomers Baby Boomers, born roughly between 1946 and 1964, number 78 million strong. Demographers characterize Boomers as: • Ambitious • Optimistic 4
Pew Internet & American Life Project. Generations Online. December 2005. Available at: http://www.pewinternet.org. 10 1. Understanding the e‐Buyer • Individualistic • Careerist • Competitive • Materialistic Boomers value convenience (e.g., one‐stop shopping) and face‐to‐face communication. Given the size of the Boomer population, a great deal of research has been conducted regarding their specific real estate needs. The NAR 2006 study, Baby Boomers and Real Estate: Today and Tomorrow, found that: • The average age of the Boomer is 50. • More than three‐quarters of Boomers own their own home. • Almost 90% of Boomers who have sold a home worked with a real estate agent. • Almost three‐quarters of Boomers used the Internet to search for a home. The same study found that Boomers' top five needs of real estate agents were5: 1. Representing their interests and coordinating with other parties involved in the process 2. Managing the closing process from start to finish 3. Explaining all contracts, forms, and agreements 4. Negotiating on their behalf 5. Providing advice on critical issues during the process We will look at providing service and delivering value for all generations of clients in further detail in Module 2. EXAM question 6
Slide 22 POINT OUT that Boomers are fueling the second‐home market by buying their eventual retirement home now and that a majority of Boomers feels that it costs too much to live to ever completely retire. Generation X Generation X, born between 1965 and 1976, grew up at the end of the Cold War and the infancy of the Internet. Coming from families with working mothers or that experienced divorce, Generation X represented the first wave of latchkey kids. Demographers often characterize Generation X as: • Skeptical • Cynical • Entrepreneurial 5
National Association of REALTORS®. Baby Boomers and Real Estate: Today and Tomorrow. Chicago, IL: National Association of REALTORS®; 2006. 11 e‐Buyer •
•
•
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Independent Self‐reliant Pragmatic Reluctant to commit DISCUSS Generation X as strong, up and coming, and a big part of any agent’s business. ASK the students: Are YOU ready for these buyers? EXAM question 5 Slide 23 Most members of Generation X cannot remember a world without technology. Childhood for Generation X included fast food, remote control entertainment and quick‐response devices such as automatic teller machines and microwave ovens, all of which provided instant gratification. Members of Generation X embrace technology as it allows them to work smarter, not harder. Compared to all generations, including Generation Y, Generation X members are more likely to conduct their banking business online3. Generation X is regarded as having brought e‐Business into the mainstream. The average real estate buyer is 39 years old—a member of Generation X. The typical first‐time buyer is 31 years old and sits on the cusp of Generations X and Y2. Generation Y Slide 24 EXAM question 7 Generation Y, born between 1977 and 1994, is the most ethnically diverse generation in American history. Demographers describe members of this generation as: • Idealistic • Trend conscious • Entrepreneurial • Socially responsible • Multi‐taskers Members of Generation Y were weaned with computers as early as elementary school. Also known as the MySpace or FaceBook Generation, members of Generation Y use the Internet for virtually everything: • Update their social networking profile • Play games • Download music • Download videos • Develop and read blogs If Generation Y had a theme song, it would be “Reach out and touch someone—constantly.” Using all permutations of technology, including 12 1. Understanding the e‐Buyer short‐message service (SMS) technology, Generation Y has mastered the art of staying connected 24‐7. Because of their wider net of relationships, Generation Y is the first to try, buy, and spread the word. At the same time, Generation Y avoids the difficulties of face‐to‐face confrontations. Today’s real estate agents need to be aware of this when working with this unique group. Many marketing efforts today with Generation Y involve hiring a person in this age group to conspicuously use and endorse a product to his or her peers. Exercise: For each of the following statements, put a checkmark in the generation column that BEST fits the statement. There is only one correct answer for each statement. This generation…. Consists of 78 million consumers. Understands dedication. Is fiercely independent. Would identify with the message: "We know you could do this yourself, but we’re here to make your life easier.” Would identify with the message: "You have sacrificed long enough. Reward yourself.” Would identify with the message: "We can help you transition to the next stage of your very exciting life." Would identify with the message: "Stay connected." Slide 25 Traditionalist Baby Boomer Gen X Gen Y X X X X X X X 13 e‐Buyer 2. Service and Value in an e‐Buyer World Slide 26 In this module: • What is service in an e‐Buyer world? • Delivering value • Handling objections DEFINING SERVICE In Module 1, we learned that the real estate e‐Buyer is coming to the table well prepared. So, in a world of educated e‐Buyers, how does the real estate agent deliver service? First, let's define client service. True client service is delivering to clients the services they want, when they want them, and how they want them. EXAM question 8 Slide 27 EXAM question 9 Slide 28 If the real estate e‐Buyer is a first‐time homebuyer, he or she may not know all the services they want (or need). However, the majority of real estate e‐Buyers have very specific ideas about when and how they want services. As a general rule, real estate e‐Buyers are looking for real estate professionals who are fully familiar with and comfortable using new technologies to help make the home buying process: 1. Easier 2. Quicker 3. Less expensive A 2007 study on customer experience sponsored by RightNow Technologies underscores the following6: • Customers want feedback and responsiveness. • Customers expect multi‐channel choice—the ability to contact a company by phone, e‐mail, fax, or in writing. • Customers like having the ability to find the information they need online. Consider this quote from Greg Gianforte, CEO of RightNow Technologies: “If you can’t make it easy and satisfying for people to do business with you, you’ll lose them to someone who does—and quickly.” 6
RightNow Technologies. Customer Experience Report. August 2007. Available at: http://www.rightnow.com/. 14 2. Service and Value in an e‐Buyer World Slide 29
Discussion Question 2: How Easy Is It for Customers and Clients to Contact and Work with You? 1. How do you determine the way(s) in which your customers and clients wish to be reached? 2. In what ways can your customers and clients reach you (or your staff)? In person, phone, e‐mail, SMS, live Web chat? 3. How quickly do you (or your staff) respond to customer and client inquires and requests? SERVICES DO NOT EQUAL VALUE Slide 30
Making yourself available around the clock to customers and clients and responding to inquiries and requests within a specified amount of time do not necessarily mean you are delivering value, especially to e‐
Buyers who come to the real estate transaction with weeks of research and preparation. 15 e‐Buyer Primary ways real estate professionals can demonstrate and deliver value to e‐Buyers are: 1. Interpreting, validating, and supplementing the information the e‐Buyer has already researched. 2. Helping the e‐Buyer negotiate terms and conditions of the purchase. 3. Guiding the e‐Buyer through the process of buying a home. Who ultimately defines value? The customer or client receiving it. EXAM questions 10 and 19 Slides 31‐32 These conclusions are echoed in the results of the NAR 2007 study where buyers were asked to identify the benefits that their real estate agent provided2. See Figure 5.
16 2. Service and Value in an e‐Buyer World Figure 5: % of Buyers Who Identified Benefits Provided by Agent Benefit First‐Time Buyers 77 50 Repeat Buyers 44 45 Helped buyer understand the process Pointed out unnoticed features/faults with property Improved buyer's knowledge of 37 search area Negotiated better sales contract 41 terms Provided better list of service 37 providers Shortened buyer's home search 37 Negotiated a better price 35 Provided a better list of mortgage 22 lenders Narrowed buyer's search area 17 Expanded buyer's search area 20 Other 9 Source: Reprinted with permission from National Association of REALTORS®. Profile of Home Buyers and Sellers, 2007. 42 36 38 34 30 20 19 17 9 17 e‐Buyer Discussion Question 3: The When and How of Interpreting Information Slide 33 1. When do you begin interpreting, validating, and/or adding to the information the e‐Buyer has already researched? During the buyer counseling session? After you have formalized the agency relationship? 2. What specific ways do you interpret, validate, or supplement an e‐Buyer's research? MANAGING EXPECTATIONS Slides 34 Experienced real estate professionals know how to manage the expectations of their buyer‐customers and clients, including e‐Buyers, from the outset of the real estate transaction. The more you meet your customers' and clients' expectations, the more satisfied your customers and clients will be. For the perspective of one real estate sales coach on managing expectations, see Figure 6. 18 2. Service and Value in an e‐Buyer World Figure 6: How to Deal with Unreasonable Clients—Keep Their Expectations in Line By Kelle Sparta Is there a mismatch between your clients’ expectations and the reality of your local market? How Expectations Are Set First you must acknowledge that your “unreasonable” buyers and sellers are that way for a reason. Buyers are inundated with negative coverage of the national housing market from their trusted media outlets, and are often overwhelmed with their choices. Buyers and sellers base their expectations on what they believe to be good information; they don’t intend to be unreasonable. Therefore, in the initial meeting with the clients you need to address their expectations of the market and their expectations of you. Don’t wait until they start to get upset or frustrated with you; it’s too late then. You have to deal with it up front. Here’s how. Get Buyers to Get Real It’s your job to explain to buyers that while there are a lot of houses on the market right now, they don’t need to see all of them to make a good choice. They need to know that you have been previewing the properties in their price range and will show them the houses that meet their needs. Tell them that if you understand what they’re looking for, you should be able to find their house within six showings — and you’ll probably find it before then. Inform them that if you haven’t found their house after six houses, then you would like to arrange another meeting to discuss their search criteria in detail to make sure that something hasn’t changed. Stuck In Unreasonable Mode? If you have clients who won’t budge from unreasonable thinking, then you may have failed to validate their feelings. It sounds mushy but it usually works. Restate how it is that you think they are feeling, and let them know you understand their point of view. It’s in Your Hands As a real estate professional, you’re the authority on your local housing market. That’s one of the most important values you bring to your clients. You must use your communication skills and your ability to interpret real estate data to convey current market conditions and help them make an informed, rational decision. When you have clients or prospects that are being unreasonable, it’s your job to help them revise their expectations based on the market reality. If you’re clear about what they can expect, and you do a good job of communicating it, you will be well on your way to a business full of completely reasonable clients. Source: REALTOR® Magazine Online. Available at: http://www.realtor.org/rmomag.nsf. 19 e‐Buyer HANDLING OBJECTIONS Slide 35 In a sea of information, the hyper educated e‐Buyer may think he or she knows as much (or more) than the real estate agent and challenge him or her, leading to potentially awkward situations. Experienced buyer's agents know how to convert objections into opportunities to demonstrate value. Exercise: Divide into groups of two, with one acting as the agent initially, and the other acting as the buyer. Change roles so that each of you plays the part of an agent. The student playing the part of the buyer should pick one of the following objections/statements, and the student playing the part of the agent should provide a possible counter. "I don't really need you to help me find homes. I've been on all the Web sites and looked at the virtual tours; I know what I want." “Virtual tours are helpful that way. However, sometimes either the listing agent doesn’t do good job or doesn't do one. If, after getting to know you and what you want, I find a house I think you’d like, do you want me to encourage you to look at it, even if the virtual tour is "I know what my house is worth; I looked it up on Zillow.com." “Zillow is one of many Web sites that provide some great information. However, like any site working with raw data, sometimes they make mistakes and miss the nuances of the market. You wouldn’t want to sell your home for less than it is worth, would you? "I found a really awesome lender on the Internet." “If you are on the Internet, you’ve probably heard of predatory lending. As an active buyer’s agent
I have a list of reliable lenders I’d like to share with you. My criteria are: 1) they must be honest; 2) when they say a loan is approved, it is; 3) the GFE is very reliable; and 4) they close their loans.”” "I found a really cool Web site with contracts on it. When I find the house, I'll just go there and download the forms and do a contract." “Because the Statute of Frauds strictly interprets written documents, it’s important to get them right.
In our state (pick one of the following) 1) agents have the authority to fill in preprinted documents. May I give you a sample, blank copy? 2) attorneys prepare the contract. May I give you some names of really good real estate attorneys?”
20 2. Service and Value in an e‐Buyer World MAINTAINING A HIGH‐TOUCH TRANSACTION Buying a home is still a high‐touch transaction and, regardless of the path taken to get to the market, in the end it will remain a personal one. Real estate professionals have always functioned as intermediaries in a service‐
driven business. Real estate professionals need to consider how and when to communicate with each of your unique clients throughout the transaction. The need for real estate professionals to stay in touch with their clients after the transaction is just as important. In the following modules, we will look at tools to enable real estate professionals to use high technology for high touch—that is, using technological tools to effect person‐to‐person communication between agents and clients, not computer or automated voice response system to person. EXAM question 28 Slide 36 POINT OUT that one of the greatest gifts of technology is contact management via a database. Your older students will remember when “contact management systems” were metal boxes with 3 x 5 index cards with notes on them. Remind the students that the obligation to keep in touch is a one‐way street. It is not a situation where “They didn’t send a holiday card to me, so I’m not sending one to them.” 21 e‐Buyer 3. Web Fundamentals In this module: •
Characteristics of good Web sites •
Web site best practices •
Fine‐tuning your Web practices As discussed earlier in this course, the e‐Buyer is expecting the real estate professional to make the home buying process (1) easier, (2) quicker, and (3) less expensive. Although few professionals can guarantee at the beginning of the transaction that it will be less expensive, most real estate professionals will strive to make the process easier and more expedient, in which case real estate professionals will make communication and technology tools priority one, which includes Web sites. Slide 37 In today's marketplace, it is essential that real estate brokerage firms and their agents have an Internet presence, especially for those firms and agents who hope to capture e‐Buyers as they begin researching possible homes. A majority of REALTORS® find value in having a Web site. Close to two‐thirds of respondents surveyed in NAR's 2007 have a Web site2. (See Figure 7.) Figure 7: % of REALTORS® Who Have Web Site Slides 38‐40 Source: National Association of REALTORS®. Member Profile 2007. Chicago, IL: National Association of REALTORS®; 2007. Not all Web sites are effective tools, however. So what makes a good Web site? See Figure 8. 22 3. Web Fundamentals Figure 8: Ten Features of a Great Web Site 1. Lots of property photos and descriptions. Photographs and detailed property information are considered the two most valuable Web site features by buyers and sellers, according to a survey by the National Association of REALTORS®. 2. Searchable listings. Buyers want to see properties. Provide access to your area’s MLS listings using an Internet Data Exchange, says Mike Barnett, CRS®, e‐PRO®, vice president of technology for InternetCrusade. Let visitors know you’re there to help them as soon as they find properties they like. 3. Updated links. Make sure hyperlinks are working and link to the most current information available; when visitors get snagged on broken links or see you don’t keep your site updated, you lose credibility. 4. Type that’s accurate and easy to read. As tempting as it may be to experiment with colored or textured backgrounds, or to use light‐colored text on a dark background, the best sites stick with easy‐to‐read black text on a light background. Proofread for misspellings, and make sure words aren’t overlapping images, which impedes readability. 5. Customer‐centric content. Your Web site should tell prospects what’s in it for them. “Consumers aren’t impressed when they see a picture of a [practitioner] posing with a phone to his ear,” says Marc Davison, executive vice president of VREO Software Inc., a real estate software company in San Luis Obispo, Calif., that has surveyed consumers. “They’re saying, ‘Show me the properties.’” 6. Information prospects can use. The best sites go beyond mortgage calculators and local weather to provide information that’s truly valued by the niche customer. For example, if you prospect in a condominium project, publish bylaws and tenant rules and let all the residents know they can find the information on your site. 7. Simplicity. Consumers should be able to take a quick look at your home page and know how to contact you, how to search for homes, and where to find resources for buying or selling. Flashing graphics, slow‐loading animation, and too many links will slow them down. 8. Organization. It doesn’t matter how much great information you provide if it’s buried. Don’t make visitors scroll down several screens to find contact information, listing search tools, or neighborhood data. Organize content into categories and provide clear links on the home page. A site map helps consumers find what they’re looking for. 9. A consistent look. Use the same typefaces, type sizes, design elements, and navigation tools on every page of the Web site. It’s great to have different sections for buyers and sellers, but don’t make the sections look like entirely different sites. 10. Short, snappy copy. Use digestible bites of information when explaining how you got into the business and what awards you’ve won. Bullet points and short paragraphs work best. And don’t put your mission statement or biography on the home page. Source: REALTOR® Magazine Online. Available at: http://www.realtor.org/rmomag.nsf. 23 e‐Buyer WEB SITE BEST PRACTICES Make Your Domain Name Easy to Remember EXAM question 11 Slide 41 Slide 42 Good Web sites have easy‐to‐remember domain names. What is the key to creating one? If you are an agent and you can purchase your own domain name, include your name (first and last) in your domain name. If you own a brokerage firm, create a domain name that includes the firm name, geographical location or name, or some other attribute, e.g., LoganSquareRealty or SeashoreRealty. Put the Customer First For sales professionals, the purpose of a Web site and Web presence is to build a good relationship with customers so they choose to buy from you. Good Web sites place the customer at the center of the online experience, anticipate their needs, provide information that they want, and, most important, treat them intelligently and with respect. EXAM question 12 Slide 43 Provide Information in No More Than 3 Clicks Appropriate information needs to be readily available. The last thing an e‐Buyer wants is to wade through unnecessary content about the salesperson and the company when he or she is searching for property and neighborhood information. The e‐Buyer must be able to attain the desired information within 3 clicks—the fewer clicks, the better. Information must be presented so that the customer can use it easily and not be required to “think” through the process. The steps should be easily defined and clearly marked, and all links must be live. Prioritize MLS Search Functionality Slide 44 EXAM question 26 What customers want to do is search for a home, which all begins with the MLS database. A good Web site will provide all the tools necessary to supplement MLS data in an easily understood and prioritized format. For instance, assume that most buyers are primarily interested in locating a home that meets their specific requirements. Your Web site should prioritize that aspect. Your Web site should provide highly detailed information for each property and include photos (lots of them) and maps of the property and its surrounding neighborhood. 24 3. Web Fundamentals Property Listings: Keep Them Fresh EXAM question 13
Slide 45 While many e‐Business Web sites struggle to provide content that is timely and relevant, this is not necessarily a struggle for today's real estate brokers. Brokers who participate in an MLS may operate “Internet Data Exchange” (IDX) Web sites, whereby they exchange consent to display each other’s listings on the Internet. IDX, also known as “broker reciprocity,” enables MLS participants to display each other’s listings on their own Web sites, thereby allowing brokers to maintain their identity on such Web sites, and still be able to advertise a wide array of listings, including those of other brokers. EXAM question 20
Content: Go Deep Web sites should provide content depth to entice customers to stay at the Web site and complete the desired call to action, such as providing one’s name, e‐mail address, and phone number. Web sites also should provide content depth to keep customers coming back, since many online customers today are e‐Lurkers. Unlike the motivated real estate e‐Buyers profiled in Module 1, e‐Lurkers may require up to 24 months before they decide to buy. Twenty‐four months of incubation time requires a great deal of content, calls to action, and information. See Figure 9.
Slide 46
Slides 47‐48
Figure 9: Content for the Decision‐to‐Buy Cycle 25 e‐Buyer Slide 49 Real estate professionals may want to consider developing two levels of content for e‐Buyers and e‐Lurkers: direct content and indirect content. For examples of direct and indirect content, see Figure 10. Figure 10: Examples of Direct and Indirect Content Direct Content •
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Indirect Content Detailed product information Product frequently asked questions (FAQs) Product demos Background information Additional images •
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Education How‐to information Customer testimonials Electronic magazines Events Real estate professionals should consider developing direct content in the form of local, regional and/or state‐specific information, for example: • Current market information. Consider including information on recent sales, current list price/sales price ratio, days on market, etc. • Restrictive covenants. Any other pertinent information should be included, e.g., "Happy Hollow is a qualified 55+ community; part of the application to join the home‐owner's association includes proof of age required" or "Woods Estate is built around a championship golf course; membership in the golf club is mandatory for residents." • Tax laws. For example, South Carolina has a three‐tiered property tax system, with the lowest rate reserved for state residents over the age of 65, the middle tier for state residents under 65, and the highest tier for non‐state residents. This would be information an out‐of‐state buyer would appreciate. • State‐specific forms. For example, if there is a seller's disclosure statement on file, consider scanning it in and making it available. Agents who specialize in niche markets should develop indirect content specific to their niche, for example: • How to buy a house for first‐time homebuyers • Ten steps to downsizing painlessly for senior clients • Considerations when purchasing a resort or second‐home property for resort and second‐home buyers 26 3. Web Fundamentals Pull, Don't Push If one of your business strategies includes distributing newsletters and/or handy tips to clients and consumers, make the newsletters and tips available in an electronic format and allow consumers to "pull" them from your Web site. The concept of pull marketing is the consumer pulling data and information that interests them. If you have a place on your Web site where a consumer can sign up (an excellent call to action) for information like a newsletter or tips via e‐mail, they are pulling the information. It is information they actually want and think they have a need for. Better yet, they have given you permission to market to them. Pull marketing is in stark contrast to push marketing, which can be defined as pushing out information, data, etc., to clients and consumers who have not asked for them. Those online pop‐up ads, scented perfume strips in magazines, and free product samples that arrive in the mail are all examples of push marketing. EXAM question 14 Slide 50 EXAM question 29
Make It Easy for e‐Buyers to Contact You When the e‐Buyer is ready to buy, your Web site should provide the e‐
Buyer with adequate ways to reach you: E‐mail—If you provide an e‐mail address, make sure you have a way to respond to Internet leads quickly. This can be accomplished with an e‐
mail–enabled cell phone, which we'll address in further detail later in this module. Slide 51
Toll‐free phone numbers—Consumers, e‐Buyers included, like them. Many consumers view a toll‐free phone number as a convenience and somewhat impersonal, which is less threatening. Some toll‐free numbers use short‐message service (SMS) technology, which enable agents to deliver text messages back to consumers. Ready to send a text message blast advertising your real estate services to consumers? Not so fast. Check the Federal Communications Commission’s wireless domain name list to make sure that the message is not being sent to any of the listed domains. Visit www.realtor.org for an explanation of FCC rules regarding “mobile service commercial messages” (“MSCM”). Call centers—Some companies provide a service where the customer enters a telephone number listed on the Web site. Then a call center contacts the customer and a salesperson, directly connecting them then and there. The objective is not to give the customer any reason to find another site for information—or look for another salesperson. Text Messaging—Some Web sites incorporate SMS into their contact page. People can type a message on their computer and you get a text message. Companies are also using sign riders on listings to accomplish the same thing. Permission is key in this very personal medium. Once they text message you, always ask permission to text again. 27 e‐Buyer Instant Chat—Many agents are turning to this for live chat or instant answers. An example is a product like realPING, which puts a link on your Web site. Consumers who click the link will activate the application, which dials your phone number automatically. Contact Forms—Contact forms are highly useful and can used for different purposes. For example, a contact form can be a survey; it also can be a place for consumers to ask a question. Note: Privacy policy information should be placed prominently so that consumers will feel comfortable to contact you. Promote Your Web Site Everywhere EXAM question 24 Slide 52 Experienced real estate professionals promote their URL in all marketing opportunities, including: • Business cards • Voice‐mail messages • E‐mail • Marketing pieces • All listings • Newsletters • Directories, rosters, etc. • Press releases • Promotional giveaways Ask for Input Slide 53 An exercise that should be done often is to have a trusted friend who is not in the real estate business visit your Web site and give you honest feedback on the following: • Was it easy to navigate? • Did it contain information that was useful? • Did it contain enough information to invite the person to return again? 28 3. Web Fundamentals Exercise Slide 54
Real estate practitioners who are e‐savvy REALTORS® need to be mindful of the NAR’s Code of Ethics. How well do you know NAR’s Code of Ethics? Try the following exercise.
Situation Allowable? Yes No 1. REALTOR® B’s e‐mail address is [email protected]. Answer Key YES 2. REALTOR® C’s e‐mail address is: [email protected]. Yes No NO (Article 5, Section 7) 3. REALTOR® A discovered that his chief competitor, REALTOR® D, did not own the domain name for his company. REALTOR® A bought the domain name and uses it to direct traffic to his own Web site. Yes No NO (SOP 12‐12) 4. REALTOR® V has her own business Web site. It displays her team name, her e‐mail address, pictures of V and her team, but does not contain the name of her firm. Yes No NO (SOP 12‐5) 5. REALTOR® J, an active licensee in Florida and Ohio, has two Web sites: one for her practice in Florida and the other for her practice in Ohio. On each Web site, she notes that she is “licensed in both Florida and Ohio.” Yes No YES (SOP 12‐9) 6. REALTOR® T is very proud of the fact that two years ago, he sold the largest, most expensive home in his town. He still has that listing displayed as active on his Web site. Yes No NO (Article 12 & SOP 12‐8) 7. REALTOR® L finds a wonderful history of her community on a private Web site that is not L’s. L cuts, pastes, and puts this on her own Web site. Yes No NO (Copyright law) 8. REALTOR® H sells the names and e‐mail addresses he gets from his Web site to local lenders, home inspection companies, and title companies. He notifies consumers in advance that he will be sharing their information. Yes No YES 9. REALTOR® J is in competition with REALTOR® W for a listing. While perusing the “Rant and Rave” section of craigslist.com, J finds a highly uncomplimentary post, from a consumer, about W, which J knows is untrue. She forwards this to the sellers who are deciding between her and W. Yes No NO (15‐2) 10. REALTOR® N has feature on her Web site so that consumers, in order to obtain information, must click on an “I ACCEPT” button. When consumers click on this button, they are agreeing to an exclusive, one‐
year buyer agency relationship with REALTOR® N. Yes No NO (9‐2) 29 e‐Buyer FINE‐TUNING YOUR WEB PRACTICES Real estate professionals who want to fine‐tune their Web practices should consider the following: • Implementing Web analytic solutions • Search engine optimization (SEO) • Pay‐per‐click (PPC) advertising • Aggregator Web sites and online classified sites Web Analytic Solutions EXAM question 15 Slide 55 Real estate professionals can measure their Web site traffic and overall effectiveness by using Web analytic solutions. Web analytic solutions can identify: • Number of visits • Number of pages viewed per visit • Average amount of time spent at Web site • Sources of traffic • Percentage of conversions—Web site visitors who take a desired action, for example, signing up for a newsletter or completing a short survey A number of analytic programs are available, including Google Analytics, WebTrends.com, Visistats.com, and Getclicky.com. Another company, Stepforth.com, will analyze your Web site to see where it places in Internet searches. Search Engine Optimization (SEO) Slide 56 Need help in making sure your Web site consistently ranks high in organic searches (search results that are natural and do not include paid advertising)? You may want to consider search engine optimization, or SEO for short. There are a number of ways your Web site can be “optimized” to enhance its ranking during organic searches. Those ways include: • Ensuring proper presentation, layout, and coding • Adding content such as articles, multimedia, blog posting, or other data, that increases the amount of relevant materials on the site that corresponds to certain search terms • Using keywords—also known as meta tags—to specific relevant search terms 30 3. Web Fundamentals •
“Backlinking,” i.e., getting other sites to backlink to your Web site Slide 57
Pay‐Per‐Click (PPC) Advertising The pay‐per‐click (PPC) advertising model is based around the delivery of actual traffic, not just the “impression” of advertising. It is a model of marketing that makes the marketers more accountable for delivering an actual return on advertising dollars – something that offline marketing continues to struggle with to this day. Since PPC models can be configured and tracking guaranteed, the use of PPC or “ad words” has become a standard marketing technique for many real estate brokers worldwide. The most popular PPC systems in the world are currently Yahoo Search and Google AdWords; these two systems generate the most interest since their Web portals also dominate the #1 and #2 traffic space for online search. With PPC, brokers can “sponsor” searches by bidding for key words the consumer might use to search for their services. Since there are usually many competitors bidding for the same keywords, the costs for each bid – the cost per click that the bidder is willing to pay – can range from a nickel to tens of dollars per term. Plus, PPC bidders can adjust their bids to achieve different “spots” in the results – higher costs for the first or second ad placement, lower costs for 6th or 10th position, and so on. PPC is a kind of “traffic auction” that gives brokers the ability to focus their potential traffic generation based upon specific phrases, terms, and contexts. Aggregator Web Sites and Online Classified Sites Real estate professionals’ business Web sites aren’t the only place where agents can market property listings, expand their Web presence, and promote their brand. Most active agents today find value in marketing their listings through: 1. Aggregator Web sites like REALTOR.com 2. Online classified sites like the ones listed on the next page An aggregator provides consumers the opportunity to go to one location to view a multitude of listings. Typically, the aggregator provides (unqualified) leads back to the brokers via a link to the broker’s listing. One advantage of aggregator Web sites is that the consumer has a unified experience and therefore does not need to learn the navigation of a multitude of web sites. Another advantage is that consumers can view a majority of available listings through one location. Online classified sites provide agents with the opportunity to expand their marketing reach to more prospective buyers—many at no cost—which 31 EXAM question 16
Slide 58 e‐Buyer ultimately will help agents find buyers faster. Examples of online classified sites include: • Trulia • Zillow • Frontdoor • Googlebase • Craigslist • LiveDeal • Postyourlistings • HomeScout • Oodle • SecondSpace • Homescape • Propsmart • Syndic8 • Propbot • Backpage • Citycribs • hotpads There are also sites that allow agents to create an ad once and then post them on many of the classified sites. These sites include: • www.postlets.com • www.vflyer.com • www.nls.point2.com • www.realestateshows.com 32 4. Tools of the Trade: Advancing Your Business 4. Tools of the Trade: Advancing Your Business In this module: • Smart phones • Additional technology tools • What is Web 2.0? In today’s market, it’s not enough to have a great Web site. Savvy real estate professionals leverage technology to make communication with e‐
Buyers more efficient and effective. Forward‐thinking real estate professionals budget money each year for technology acquisition, upgrades, and training. In this module we will look at Smart Phones, additional technology tools, and an array of Web 2.0 applications. Slide 59
SMART PHONES Slide 60
The Smart Phone, also known as an e‐mail enabled phone or personal digital assistant (PDA), is the communications tool of choice for most connected real estate professionals. The single most important feature of the Smart Phone is the ability to receive e‐mail throughout the day. With a data contract (not cell phone minutes) real estate agents can receive a copy of all e‐mail correspondence and browse the Internet. Real estate agents who use a program like Microsoft Outlook can synchronize contacts and calendar with the Smart Phone as well. Until recently, the major player in PDA computing was Palm®. The most popular model now is the TREO. Now with Web‐based MLS systems, other PDA models can be considered, including pocket PC‐based units from Microsoft® and BlackBerry®, which is from Research in Motion (RIM) and has a proprietary operating system (OS). Before buying any Smart Phone, real estate professionals who are REALTORS® should check with their local REALTOR® board or association to verify if they are currently using, or have any intention of installing, electronic key lock‐box and MLS‐download systems. The use of these products may be a consideration when purchasing a Smart Phone. In addition, REALTORS® should visit www.realtor.org for member benefits for any available product discounts. How can a Smart Phone enhance the consumer experience? Here is short list of what a PDA can do to make your return on investment a quick one: 33 e‐Buyer •
CONSIDER making the Smart Phone discussion a town hall exercise. ASK students who have used these devices successfully in their business to share their stories. •
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Check e‐mail anywhere on the road. If an e‐mail is important, the Smart Phone user can respond immediately. If an e‐mail response can wait until you are sitting in front of a computer you will know so from the road. Make sure you have a signature set up on your Smart Phone that tells your clients and customers that you are responding while on the road. If your answers are short, they will understand. Return almost every phone call immediately, if it's important to do so. Schedule business meetings and property showings, thereby eliminating phone tag and delayed service. Make follow up and prospecting calls when there are a few extra minutes to spare, such as when a buyer is late for a showing. Perform MLS searches and provide pricing information whenever a client may need it, whether in person or by phone. Avoid missing appointments and/or scheduling two events for the same time. It's understandable that many agents may resist spending a few hundred more dollars on yet another computing accessory, and then having to learn how to use it. However, the ability to have instant access to all of important contact information means being able to conduct business: • Faster • From anywhere • Without having to carry a laptop with you at all times All of the above can enhance an agent's productivity while substantially enhancing the service provided to clients and customers. ADDITIONAL TECHNOLOGY TOOLS •
Automated forms—Real estate professionals may manage as many as 20 documents to complete a real estate transaction. Automated forms simplify the creation and storage of real estate industry forms. Unified messaging—One number to deliver all voice, fax and e‐mail in conjunction with a call center … anywhere, anytime. Instant messaging—Live, text‐based chat between you and the customer over the Internet. Video conference—Webcams can be used in conjunction with instant messaging to create a video conference. Voice Over Internet Protocol (VoIP)—Allows your customers to connect with you instantly by voice over the Internet. •
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34 4. Tools of the Trade: Advancing Your Business WEB 2.0 TOOLS No doubt you've heard the term Web 2.0 before. It's often used in combination with terms like wiki, mash‐ups, ajax, and Real Simple Syndication (RSS). But what is Web 2.0 exactly? Web 2.0 refers to a second generation of technology, services, and tools that facilitate communication, creativity, collaboration and sharing between users. EXAM question 24 Slide 63 Web 2.0 is conversation marketing. It gives you the ability to dialogue with your niche where there is a sense of community and trust as opposed to being told what to like and use. You can become a trusted friend who recommends products and services that solve your problems. Ideally, Web 2.0 technologies will continue to make it easier to buy, sell, or rent properties. Web 2.0 tools include blogs, social networking Web sites, and videos, which we will explore in further detail. Slide 64
BLOGS EXAM question 21 Slides 65‐66 Blogs, short for Web logs, give agents a format to converse with Web site users. Blogs also allow users to ask questions and offer their opinions. A surprisingly low percentage of REALTORS® publish blogs. See Figure 11. 35 e‐Buyer Figure 11: % of REALTORS Who Publish Blogs Slide 67 Source: National Association of REALTORS®. Member Profile 2007. Chicago, IL: National Association of REALTORS®; 2007. Benefits of Blogs Slide 68 For some real estate professionals, the time investment in maintaining a blog outweighs its benefits. However, blogs do offer a number of benefits: • Spread a message • Establish credibility and authority • Connect with groups of interested readers • Provide networking opportunities • Give a brand a human face Slides 69‐70 How to Get Started •
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Find a publisher. Wordpress or RealTown.com/blogs created by Internet Crusade. Wordpress is free and has hundreds of themes and plug ins. Many hosting plans have one click installs of Wordpress in their account. Choose a host. You can use the Internet address assigned to you or you can upload it to a page on your existing Web site. Ideally, your blog 36 4. Tools of the Trade: Advancing Your Business •
appears as part of your Web site; example blog.abcrealty.com. Use GoDaddy.com; InternetCrusade.com to register your domain name. Publishing with RSS. The goal is to attract readers and earn subscribers. This is done with Real Simple Syndication (RSS). This enables software like newsreaders to download your content (text, images, audio, or video) automatically every time you publish. How to Get Others to Read Your Blog •
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Invite Contributors. Contributors and guest writers can help drive traffic to your blog. Post Comments. For every blog post you do, make 5 comments on someone else’s blogs. This will encourage others to check out your blog. Likewise, when someone comments on your blog, thank them for stopping by and return the favor by checking out their blog. Also, you may leave an interesting comment and a conversation can start, which can lead to a separate blog post in itself. Commenting is networking at its best. Submit Stories to Social Bookmarking Sites. Examples include Digg.com, Reddit.com, and Del.ico.us. Provide Links to Other Blogs. When someone sees you referred them on your blog, they typically will stop by and leave a comment. If your goal is traffic, search engines are very friendly to sites that are winning in the linking space. Blogging is different than the thought behind a Web site where once you get them there, you want them to stay on your site. With blogging it isn’t important to be an expert on everything, but you do want to be seen as the place to go to get answers and interesting information. Create a Blog Resource for Your Neighborhood. Team up with a foodie, a school board member, a city planner, a retail expert—for your neighborhood. Sponsor a Blog. Don't have the time to author a blog? Advertise on a popular mortgage blog, or advertise on your local school blog. Sponsorship can be in the form of a paid banner. Or do an interview and offer a guest perspective for the post. Do a Blog Roundup. Real all the blogs from a specific community and publish the “best of the week.” Promote Offline. Promote your blog offline in brochures and business cards and in conversation. SOCIAL NETWORKING Slide 73
Social networking refers to online communities where members can post information about themselves and invite others to become their friends. A 37 e‐Buyer Slides 74‐75 EXAM question 30 EXAM question 22 Slide 76 Slides 77‐78 primary benefit to social networking is the ability to reach out to consumers, even when they are not ready to contact you. In real estate, the most active networking sites are: • Facebook and MySpace—Social networking, primarily for Generations X and Y • Active Rain—Social networking for real estate agents • LinkedIn—Business networking There are many networking sites where you can post answers to frequently asked real estate questions—the long‐term goal of which is building a reputation as an industry expert. Some examples include: • Trulia Voices • Linkedin Answers • Answers.yahoo.com • Realtown – Ask the Experts • Active Rain – Localism • Zillow Communities In order to get maximum benefit from networking sites, consider the following tips: • Complete your profile: Many people don’t even think of this, but by completing everything in your profile, you are showing people that you are a real user and that you actually care about the social network. • Be generous: Always think of helping others first. If you help them, they will probably help you later in return for your help. Even if they don’t help you, they will probably remember you for another situation. • Get involved: Everyone must see you are really engaged with the community and that you spend time on it to make it a better place for everyone. • Don’t expect immediate results: Most people starting into social media marketing think they will succeed with their first try. Although this is not impossible, don’t expect it to happen. Be prepared to fail as many times as necessary for learning more about how to have success. • Remember users are real people: Don’t do things real people won’t like, think what would happen if you do that thing you want to do to someone you know, that will give you the answer. • Don’t try to sell: Never sell anything directly on social networks, what you should do is submit something that will make people go to your site and check what you are selling. 38 4. Tools of the Trade: Advancing Your Business •
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Don’t spam: Submitting content that no one likes and that is submitted just because you want to get benefit won’t help you to be successful at social networks. Don’t get enemies: Getting anyone to be your enemy on social networks can make your life impossible. Analyze the community: Check what makes it to the homepage and what doesn’t, try to do some research to see what kind of contents people will like and what they will dislike. Get as many friends as you can: As in life, getting to know as many persons as possible can be valuable. Whenever you need some help, you know they are there to help you and that you can count on them. Photo‐Sharing Web Sites as Social Networking? Slide 79
Web sites for sharing photos are not only great storage places for photos, but they also serve as a social network. You will meet people looking for great local pictures and people finding your photos. For example, Flickr has an interface that lets you also post to your blogs. You can give your photos a "tag", which is like a keyword. Tags help you find photos that have something in common. You can assign up to 75 tags to each photo. Photo‐sharing Web sites are a way to get your portfolio of real estate work out there (for free) so it can be seen. Put links on your blog to both the stream of photos and the discussion or use the blog to display the photo stream. VIDEO Video has moved online in a big way. Estimates indicate that in 2007 over half of all Internet users watched video online, and that number is increasing every day. So why should you care? Video involves more of the senses; it sells you and your service using sight, sound, and emotion. With video, you can make your “first impression” perfect every time. Realtor.com listings with Featured Tours were looked at 4 times more often than homes without Featured Tours. The favorite search filter for consumers? Sort by Featured Tour. Social networking sites built around or substantial inclusion of multimedia (in the form of podcasting and video) is where the growth in social networking sites is seen. 39 Slide 80
e‐Buyer Slide 81 Discussion Question 5: Real Estate Agent 2.0 •
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Technology tool ideas include: Tablet PC for presentations and signing of agreements Tablet or laptop for buyer presentations, listing presentations Built‐in (via MLS or another program) mortgage qualifying software Use of data base to create mailings (high tech) sign them personally with a note about their family (high touch) Digital camera to take a picture of the buyers in front of their new home (high tech) convert it to a postcard “We’ve moved”, with their new address—and your contact information on the back (high touch) and give it to them to mail or get their mailing list and mail it for them Scan the HUD‐1 after closing (high tech) e‐mail it to them Jan. 2 (high tech & high touch) , or put it on a CD, or on a flash drive, or in a password protected Web site. Start a blog to start ‘social networking” with your database. Instead of sending an e‐newsletter – just send your most recent blog post. Join a social networking site. Join a list serve community. Use video to engage – buyers virtual tour to send to their sphere 1. What technology tools could you use to communicate more effectively with your clients to create a high touch/high tech relationship? (You can include software and hardware.) 2. Which Web 2.0 tools do you currently use? 40 4. Tools of the Trade: Advancing Your Business 3. Which tools and ideas will you incorporate into your business as a result of completing this module? Remind the students to go to the Action Plan section of their book, and jot down their top one or two ideas for using technology to expand their business. Then, tell the student to write down the item(s) on the back of a business card, along with a date by which they hope to accomplish this (no more than 6 months in the future). They need to find another student, exchange cards, and agree to call the student whose card they got on the agreed upon date and check in on their progress. If they are feeling like they are behind, encourage them by telling them that according to stats repeated at the NAR Meetings in Las Vegas in 2007, 75% of Realtors have cell phones. That means 25% DON'T!!! 41 e‐Buyer 5. The e‐Buyer Transaction Slide 82 In this module: • How e‐Buyers find their agents • Source of leads • Establishing the agency relationship • Managing the lead • Moving from online to in the house • The contract • Follow up HOW THE E‐BUYER FINDS YOU Slide 83 EXAM question 23 How do e‐Buyers find their real estate agent? They search for them! Traditionally, buyers drove around neighborhoods, looking for real estate signs, or picked up the local newspaper and read the classified ads. Today, that e‐Buyer is Googling, Yahooing, and from there, going to other Web sites. Much has been written, presented, and talked about as means to boost a Web site to page one of Google or Yahoo. Experts agree that one of the primary ways to boost a site is by continually adding fresh content, adding a blog to your Web site, and using the correct key words in your blog and Web site. For extra tips, re‐review Module 4. Attracting customers to any business is often a combination of a number of things. All real estate agencies utilize everything from advertisements to the ubiquitous refrigerator magnets to keep their name in front of the public. The hope is that if you are “top of mind” when the consumer needs/wants a real estate agent, they'll think of you. Today's buyer needs 15 touch points to remember your name and where you work. These impressions start online, first by looking at a listing, then, by you keeping in touch. This could be an IDX‐prospecting e‐mail, and subsequent e‐mail newsletters and follow‐up phone contacts. e‐Buyers may follow your postings on other Web sites like online classified sites and blogs. Make sure you contact them in the time sequence and manner they request. If they are not ready to purchase, a simple e‐mail once a month or every two weeks can go a long way to making them your client later on. 42 5. The e‐Buyer Transaction WHERE DO OUR LEADS COME FROM? Truth be told, many companies and agents do not really know where the leads come from. Some companies try to track it; some agents do also, with varying degrees of success. Sometimes, the consumer may not remember what initially brought him/her to the agent. They may have seen a billboard which contains an easy to remember URL; they could have checked out the Web site, and ended up going to an open house, or possibly, driving by and calling the name of the agent on the sign. Marketing experts agree that good marketing is repetitive and executed in a variety of formats. Agents interested in branding themselves and building business relationships for life need to cultivate their prospects into clients, who may later refer new business to the agent and come back to the agent again for their next real estate transaction. It is possible that your "Internet leads" do not come from the Internet. You can't prove it if you can't track it. Tracking is so easy with the technology available today. You must put some type of system in place. You may find that even though someone eventually finds you online, they also saw a sign, chatted with a friend, and/or saw a billboard ad. You need to know these numbers so your marketing dollars are spent wisely. Slide 84
ESTABLISHING THE AGENCY RELATIONSHIP Slides 85‐86
In most states, you need to make a written disclosure to potential clients and customers regarding agency relationships. Agency relationship disclosures should be a mouse‐click away on your Web site, and you will need to make sure potential clients read the disclosure, understand it, print the disclosure off, and sign it and return it to you. If your clients are savvy enough to do this online—great! When you receive this back, you’ll create a file for this client in your contact management system. REALTORS® who are signing up the buyer online need to make certain the consumer understands the nature and terms of the agency relationship. The NAR Code of Ethics Standard of Practice 9‐2 states: When assisting or enabling a client or customer in establishing a contractural relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractural relationship being established prior to it being agreed to by a contracting party. 43 e‐Buyer Note: In most states, the broker is not only entitled to a copy of every contract an agent writes, but is required by law to supervise the agents, which includes having copies of all necessary documents. Some brokers may be content with an e‐mailed copy. However, agents should exercise care and caution in backing up files daily. Back‐up hard drives, memory sticks, etc., should always be stored in a different location than the computer where the hard drive is. MANAGING THE LEAD Slides 87‐88 Lead management is not just getting the lead and answering it quickly, it is properly managing the lead once you have it. Some companies have hired lead coordinators to facilitate this contact. Some of us have bought SmartPhone devices so we can track our e‐mails throughout the day. Whatever system you choose, you also need to manage the lead until they end up buying. Statistical analysis of leads finds that many good leads are marked dead. Just because someone doesn’t work with you after two or three e‐mails, doesn’t make them a bad lead. How do we manage leads more effectively? By making sure we understand how the consumer wants us to stay in touch. Many buyers are just not ready to buy when they contact us. We need to build relationships so when they are ready they will buy with us. Discussion Question 6: Did You Know? Slide 89 1. 2. For every initial inquiry e‐mail you receive from a consumer, he or she has e‐mailed how many other brokerages? What percentage of consumers stay with the first agent who responds to their inquiry? 44 5. The e‐Buyer Transaction 3. Some of today’s e‐Buyers take how many months of actual incubation? The e‐Buyer may have a different purchasing timeline than agents have prospecting stamina. The process of working with the e‐Buyer still follows the same steps as the traditional buyer did, just more and more of the steps can—and are—taking place online. The real estate industry is built on referrals and creating relationships. If you have spoken to or communicated with an e‐Buyer lead and they request you just put them on the prospecting search, do that. Automatic e‐
mails to this lead is a valuable option until they are ready to contact you. Managing the e‐Lurker Slide 90
How do you manage the real estate e‐Lurker? Convert the interview process that you use on the phone into e‐mails. Many Web sites offer back‐end software to keep track of internet leads. Once an e‐mail address is captured and permission to contact granted, systems can automatically send drip e‐mail campaigns, tell you when they are looking at properties and if they even opened your e‐mail. For these customers, use a drip marketing system that allows you to send informative e‐mails so you can keep in touch until they are ready to reach out. From e‐Lurker to e‐Prospect Slide 91
For those customers who have contacted you and communicated their level of commitment, you need a more personal contact. One size does not fit all. Use technology to deliver what the client wants, not what you have available at the time. Interview buyers and sellers in your market and find out their buying and selling habits. Use your contact management program to flag e‐mails or contact records, and pick a date to follow‐up. If your client is a Baby Boomer or older, they may appreciate a call. If your client is Gen X, an e‐mail may be appropriate. If your client is a Gen Y, you may need to send him or her a text message. Let your technology task you to follow‐up. Contact management systems can be as simple as Microsoft Outlook and as sophisticated as an online lead management system that is fed leads from your Web sites. Many of these products have Web analytics so you 45 e‐Buyer can see what properties people searched, what pages they clicked on and what e‐mails they opened from you. MOVING FROM ONLINE TO IN THE HOUSE Slide 92 Slide 93 Slide 94 At some point, almost every e‐Buyer becomes the person who meets you in person, shakes your hand, and looks at the houses. Your online persona has set them up to expect a professional, educated, and informative agent—make sure the person they meet is just that. Moving from online to person is often as simple as: "We got the e‐mail and would like to see that house. Can we go on Saturday afternoon?" If they e‐
mail you, e‐mail them back, but once an appointment is in the works, you need to ask the best way to contact them quickly if there is a change in plans or a glitch. Start by volunteering to them: "Here's my cell phone number. We are set up for our appointment on Saturday at 3, but if anything should change, this is the best way to contact me. If anything happens on my end, how shall I contact you?" After the showing, if they like the house, there are two things that can happen: they are ready to write a contract, or they have questions and/or want to think. Assuming the later, jot their questions down‐‐possibly on your notebook computer, if you use one. Get the answers and reply to them in the manner in which they direct (should I call you?). Then‐‐follow up with an e‐
mail, which both clarifies things and becomes part of your online (or paper trail) about the transaction. If they hate the house, do what you have always done‐‐probe, ask questions, and learn what they didn't like so you can focus on what they do. If you send on information about another listing, reference what they said about the last one. "This listing is also in Sagamore Hills, which you like, but it has a nice level lot, unlike the last house, where the lot was so steep." Continue to communicate how and when they direct you to. The Home Buying Process: Simple or Sophisticated? EXAM question 25 Slide 95 According to Roger Turcotte of Roger Turcotte Seminars, (www.rogerturcotte.com), consumers believe the buying process is simple: 1. Search 2. Find 3. Buy 46 5. The e‐Buyer Transaction What are the actual steps when buying a home? In truth, there are many: • Needs assessment • Financial assessment review and approval • Community / neighborhood selection • Property types • Market data about competing buyers • Identify available properties • Visit properties • Evaluate / prioritize • Decide to purchase or continue the search. If decision is to purchase proceed to next step • Negotiate terms of the agreement • Inspections / contingencies • Re‐negotiate as required based on results of inspections • Arrange for move • Close Slides 96‐97
The home‐buying process doesn't change if consumers use or don't use an agent, the quality of the result changes. Slide 98
If e‐Buyers add an agent to their team, they will benefit from the knowledge and experience that the agent brings to the process. As agents, we need to adapt to the e‐Buyers’ needs. The agent must ensure that the home‐buying process is conducted in an environment that is comfortable for e‐Buyers, even if that environment is not one that the agent prefers. This is an excellent example of client‐centric versus agent‐
centric real estate. THE CONTRACT Slides 99‐101
We have seen a lot of advances with online forms that affect our contracts. In some states, standard forms are used, and the forms are lengthy. In some states, each brokerage has their own forms. And finally, in some locales, a letter of intent and/or understanding is prepared and an attorney drafts the contract. No matter what happens in your state, make certain that (1) your Web site contains information about the process and (2) if you use standard forms, provide a copy to the buyer ahead of closing for their review. That way, when they see the documents “in the flesh,” they are ready for it. 47 e‐Buyer If you use standard forms that are purchased through software, you have the ability to fill out the form, put it in a PDF file, and e‐mail it to your client. Upon receipt, the client can review it online, and if he or she has the ability to affix a digital signature, sign it online and return it to you. At the very least, most of your e‐Buyers can print it out, review it (recommend reviewing it over the phone so that you know the client knows what he/she is signing), sign it and either (1) scan it in and e‐mail it back, (2) fax it back, or (3) snail‐mail it back. Upon receipt, you can use technology to deliver the contract to: (1) the other broker, (2) the lender, and (3) the title company. Another bonus is that you store a copy of the contract on your computer, so even when you are not in the office, you can look up what the contract says. There are many new transaction management software products now on the market. Many of these programs have one‐click integration with the popular online form applications. Whether you’re beginning your transaction on the buy or sell side, all parties of the transaction are brought together from office staff, agents, brokers, consumers, and vendors. Of course the consumer and vendors have limited access to information that is only pertinent to them. The cooperating agents decide whether to allow the consumer to upload additional documents and which documents they may have access to and view. Companies give access to the information in different ways. Every consumer must set up their passwords in order to protect the integrity and security of the transaction. All visits by all parties to the transaction are tracked and logged and provides a risk management feature. These products have a CD‐ROM function that can utilized as a marketing tool to secure transactions or delivered to the consumer with all of their documents at the end of the transaction. Privacy of information and risk management are all accomplished with these products. The consumer is not in the “dark” any more as soon as the contract is signed. Digital Signatures Digital signatures have been around for quite some time; the appraiser side of the industry has been using them for some time to sign and then e‐
mail appraisal reports. The average consumer does not yet have one, but 48 5. The e‐Buyer Transaction some consumers do. The technology is there; it will simply be a matter of when it becomes so convenient to have one, consumers will get one. GETTING THE TRANSACTION TO CLOSING Slides 102‐103
A big part of every agent's job actually begins when the buyer finds the house and signs the contract. From there, the contract needs to be shepherded through lending, underwriting, home inspection, appraisal, title work, etc. It is here that you can combine high touch and high tech to make the entire process as easy as possible for your client. First of all, understand that some e‐Buyers want more control over the process than do others. Second, understand that good risk‐management techniques say that if you give one name, give several. The question always comes up: "What if my client wants to use XYZ Home Inspection, and I think they are clueless?" This is a tough question, because if you know that XYZ is careless and if you don't tell your client, you have violated your fiduciary duties to the client. If you make unwarranted statements about XYZ, they may sue you. You are always better off with a positive statement, which you repeat as needed. For example: You: "On my Web site is a list of reliable home inspectors. Any of those I can recommend as being competent and thorough." Client: "But what about XYZ? I don't see their name on your list." You: "Those on my list I can recommend as being competent and thorough." Client: "But what about XYZ?" You: "The only inspectors I am comfortable recommending are the ones on my Web site." Transaction Management Software Products EXAM question 27
There are many new transaction management software products now on the market. A transaction management software product begins when there is a signed contract and keeps the office staff, sales agent, consumer and vendors all connected through a Web‐based system. Of course the consumer and vendors have limited access to information that is only pertinent to them and permissible to give them under all applicable privacy laws. 49 e‐Buyer Companies give access to the information in different ways. Some give a password‐protected Web address where the data is accessed. Other burn all of the pertinent data onto a CD or flash drive and give it to the consumer for safe keeping. AFTER CLOSING Slides 104‐105 Once the closing has occurred, technology makes it possible for the agent to continue to deliver post‐settlement services, from the simple 10%‐off card for purchases made at a hardware store chain (which you may get by signing your e‐Buyer up for one) to putting the e‐Buyer into your personal database (so that you may continue to market to this client until he/she is ready for the next house). Every client should be in your database, along with any personal information you have gleaned during the transaction. Technology will soon make it possible for customer‐relationship management (CRM) applications to complete many steps of the home‐
buying cycle, from keeping in touch before the sale through closing to post‐closing services and onto the initiation of another cycle. As the customer completes a transaction, the software gathers personal and collective data and behavior patterns across multiple channels and feeds it into a centralized database. The analytics within the program can then “mine” that data and compare it with pre‐determined business rules to generate predictive models, which are then forwarded to the salesperson as part of a new marketing campaign. In other words, good CRM can be a good partner in developing and managing customer communication. FOLLOW UP Slide 106 The goal is to make a prospect a customer, a customer a client, and keep the client for life. Marketing does not end when the client buys a house. Marketing continues on and on, so that when the client is ready to buy their next home, or when they have a friend, neighbor, or relative who is ready to buy or sell a home, you get the call—or the referral. In a presentation at the NAR 2007 Annual Conference and Expo, Seth Godin asserted that over 90% of all real estate licensees in the U.S. do not contact the buyer after the closing. This means 90% of all agents are simply choosing to reinvent the wheel the next time they need a buyer. Rather than get a “warm” prospect (someone who has used them before and likes them), they end up with “cold” prospects (who don't know them, and don't know if they like them). By simply entering all your prior clients into a database, and utilizing the database to contact them at least four times a year, you will be head and shoulders above your competitors. Slide 107
50 5. The e‐Buyer Transaction Discussion Question 8: Your e‐Buyers 1. Where do your e‐Buyers come from? Please list all sources that you know. 2. How do you establish agency relationships with your e‐Buyers? 3. 4. What percentage of the forms used in your state can be filled out electronically? What are the ways in which you follow up with your e‐Buyers? 51 e‐Buyer 6. Your Action Plan Throughout this course, you will be asked what you will do differently as a result of completing several modules. Use the spaces provided to commit to your action plan. 52 53