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Are Consumers driving the Real Estate industry into a change?
A new study conducted by National Association of Realtors that compromised of real estate brokers, Realtors and consultants reveal that consumers are a driving force behind this industry change. Consumers are demanding more real estate products and options. With conflicting consumer desires, the consumer is asking for more personalized services but also some autonomy in the real estate transaction.
The study also showed the at consumers want:
- Online searches and tools
- Full information about properties listed
- Rapid response to their online and telephone inquires
- A friendly experience with the real estate agent and company
- A Smooth transaction process with no hidden surprises along the way and at closing
- Low commission fees or fee packages
- Last but not least, a sense that the Realtor and Real Estate Company add value to the whole transaction process of buying and selling.
The reports also states that retail giants like Wal-Mart and Home Depot dominate in their sector because they can offer more services coupled with lower prices and if companies cannot compete in this changing industry that consumers demand they will go out of business, hence they will fail like General Motors has to the foreign competition.
Because of the over saturation of Realtors in the market place pressure to lower the fees is at a rapid pace the study has shown. Because of this, realtors and real estate firms need to experiment with using different business models to survive in this ever changing Real Estate industry.
The advancement of technology and the internet has also empowered the consumer to demand more services and information. It yet has to be seen if this change in technology and the fast pace growing of the internet will be revolutionary or evolutionary. Consumers are very comfortable using the internet to buy and sell real estate and to look for vital information about neighborhoods and property listings which all are readily available online at the fingertips of potential buyers and sellers.
One consultant in that participated in the study stated that in the next five years, 10% of Real Estate transactions will be conducted over the internet but the other side of this, many consumers will still demand the traditional model of doing real estate business transactions
The data contained in the MLS is a big factor and key issue. Should the public have access to this information so easy or should it be controlled and be a service for realtors and brokers?
Also, the changing market conditions will allow the industry to test different business models to be able to survive the coming changing times.
Finally, managing internet leads is very important to realtors and the growing referral fee business among real estate professionals. The study showed that 25% of transactions came from the referral business which can determine long term profitability.