The Millenial Mortgage Myth

This article was originally published on the National Real Estate Post: 

Millenial Mortgage MythMillenials, if we’re to believe media revelations, are an information-empowered generation that seek less human interaction. They don’t need a real person to guide them through financial transactions. They simply want devices and software to automate the processes for them.

There’s plenty of truth in the cavalcade of hype surrounding technology’s influence on consumer behavior. The connectedness of our devices causes us to become more disconnected from the need for interpersonal service. Young consumers who grew up in an atmosphere where it was easier to ask Google than grandma have been trained to seek the efficiency of an application over the advice of a trusted advisor.

The fascination with this mindset, though, becomes a self-reinforcing cycle. Millenials crave efficiency via technology, the media locks in on that generational persona, and businesses cater more and more to removing the human interaction from their services. The snowball keeps rolling downhill, growing in size and speed.

Not All Technology Is Gain

Sometimes, though, everyone loses when we cater to the preconceived notion of efficiency through automation. There are many processes that are improved by diminishing the level of personal interaction. In other cases, the human experience, knowledge, and flexibility that’s only possible through direct interaction is necessary to deliver a quality experience.

That has been our experience in the mortgage financing world. As real estate agents, throughout our careers, we’ve interacted with mortgage lenders. They’ve proven to us, and our clients, that they have the skills and responsiveness necessary to make our transactions run smoothly. We’ve built up a level of trust with our most qualified lenders and those of our associates.

We recommend a list of these professionals to our clients because we understand the alternatives. We’ve seen the bad actors in lending. We’ve watched transactions go sideways. We’ve experienced fly-by-night operators and inexperienced rookies who botch transactions that put home buyers and sellers out in the cold. We know how expensive, painful, and inconvenient mistakes in the mortgage lending experience can be.

Technology has improved much of the processing and underwriting functions of modern mortgage companies. But as much as we love technology’s influence on the efficiency of our industry, we often cringe at attempts to use its influence on the selection of a mortgage lender.

Online Reviews: A Risky Selection Criteria

We’ve been told that millennials trust reviews as much as they trust advice from their friends. While online reviews are great for easily described products on Amazon, in today’s climate, they’re a poor way to judge a mortgage professional. Much like how real estate agents game the online review system for oodles of five-star reviews, mortgage lender reviews are a wasteland of trumped up data. The vast majority of lenders have no reviews on any given platform, so consumers are choosing between a select number of marketing-driven review profiles.

Most consumers don’t know this, though. Younger consumers trust reviews, so they trust Yelp. They trust Zillow and LendingTree. They trust whichever app has helped them buy the best bike accessory or webcam. It doesn’t work out as well for mortgage providers.

Anecdotally, we’ve had three recent transactions where our young buyers did their own research online and selected a lender of whom we’ve never heard before. These lenders came highly recommended from online review sites, so they were selected over our preferred lenders.

None of them closed on time. Twice, we had to “save” the transaction with one of our preferred lenders at the last second.

Our situation isn’t unique. Sit down at a real estate conference and ask a group of agents how they feel when a client selects a lender based on online reviews. The overwhelming response will be a groan. We’re not suggesting lenders to our clients for any sort of financial reward or kickback. We make money, and we make our clients happy, when transactions close according to plan. That’s our only incentive in guiding the lender selection process.

So the next time an app developer, industry consultant, or mortgage company owner says that we need to distance the personal connection of the lending process more to enable millennials, push back. That may be what they say they want, but we know better. Sometimes the best referral is done with a phone call to a trusted adviser.

Don’t believe the myth that millennials don’t need our personal advice. Get in front of your clients’ lending education process early, and explain the gaps in the information available to them online. Reinforce the importance of working with someone who has a track record and level of experience that everyone involved in the transaction can trust. Don’t give in when your clients say “I found a great lender on Yelp.” They’ll thank you for it later.


Sam DeBord

Sam DeBord is a managing broker with Seattle Homes Group and Coldwell Banker Danforth. He is 2016 President-Elect of Seattle King County REALTORS® and has been featured in Inman News’s Top 101 In Real Estate and the T3 Swanepoel Group’s Top 20 Social Influencers. His team sells homes and condos in Seattle and Bellevue.

Raising the NAR: Sink ships or float boats?

Lack of real estate agent professional competence: it’s a perpetual topic of industry conversation. Marginal agents have been called the #1 threat to the agent sphere in the recently-released D.A.N.G.E.R. Report. “Raising the bar” in real estate is the prime focus of one of the largest agent-led groups online.

bar

Missing the mark on raising the bar

While the industry professes to want improvements in agent competency, tangible progress is inconsistent. Franchisers, brokers, associations, MLS’s, and licensing boards control the barriers to entry and sustaining licensure in real estate. These organizations are primarily driven by the inertia of their need to sustain revenue.

Raising the bar for the industry is widely accepted as a necessary goal, but few have the motivation to fund it.

This paradox was particularly evident at NAR Annual this year, with the debate over making ZipLogix a nationwide member benefit. NAR would spend $12 million per year to provide the transaction management platform to all of its members. The funds would come from NAR reserves.

ZipLogix for all agents?

Proponents of the deal spoke of the long-term benefits to Realtors:

  • Keeping the real estate agent at the center of the transaction
  • Protecting the data of Realtors from outside vendors
  • Recruiting the almost 1 million non-Realtor licensees into NAR

These were all important points in guiding the financial and technological strategy for the organization. There was also a significant undercurrent in the discussion, though, about raising the level of membership professionalism. Financial and competitive issues aside, it was implied that this service could improve the competence of the members who currently don’t use transaction management software.


 

Efficiency and professionalism increase

There’s an argument in favor of the deal, simply for this cause. By getting the vast majority of real estate agents on board with a platform that will increase their efficiency, it could improve the professionalism of their interactions with clients. Theoretically, better tools could boost the image of a Realtor in the eyes of consumers, one transaction at a time. Each time a client closed an efficiently-managed transaction with a tech-savvy agent, NAR’s broader image would be enhanced to the buying and selling public.

That’s a lofty goal, but one that shouldn’t be dismissed simply because of its difficulty.

Spending money on the lower rung

The flipside is that most successful agents are already using software that improves their transaction management, document management, and e-signature processing. There are a plethora of tools that competent agents already pay for on a monthly basis and use consistently in their businesses.

This is a clear duplication of costs for this group. The implication for them, and their brokers, is that money is being spent on those members who aren’t willing to step up and commit themselves to better tools and service. They see NAR spending money to raise the level of competence of its lowest-performing members. The top performers will continue to use the tools they currently have, while carrying the water for the rest of membership.

We often hear in these circles that this strategy doesn’t actually improve the image of the organization, but preserves its lowest rungs. It focuses on those who can’t, instead of embracing those who can and do, to the tune of tens of millions of dollars.

There are strong arguments for both sides. Does a rising tide really lift all ships? Can we raise the bar in real estate by bringing up the baseline of all agents?

Taking out the weakest links

Or, should NAR be torpedoing everything that’s a drag on the top line of our industry? Does the industry, and NAR, ultimately only improve when focusing resources on those who can lead a smaller successful core of agents toward a higher level? There is plenty of rhetoric about significantly increasing the costs associated with membership and shrinking the population to put more business in the hands of the purportedly more capable bigger producers.

A board divided

With the stated goal of recruiting many of the 1 million non-Realtor licensees into the fold with the ZipLogix deal, it seems that the current leadership is leaning toward the rising tide. NAR’s directors voted two-to-one for the proposal. But that is a highly divided board, compared to the nearly unanimous approval that most proposals receive by the time they get to the directors.

This is a discussion that has to be central in the search for NAR’s ideological future. Is it in our best interests to focus our resources on increasing the population of members from its current slate of 1.2 million? Will that increased membership have the resources to improve the level of real estate agency services nationwide, or will it dilute the organization’s focus and lend less resources to its best and brightest?

Getting off the fence

We certainly have the ability to provide different services to distinct groups within our membership. But choosing to bifurcate our mission to both a bottom-up and top-down approach means we’ll be less successful at both.

Float more boats or sink more ships? Let’s decide, let’s say it out loud, and let’s put it on our flag, so everyone on board knows where we’re headed.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth, and 2016 president-elect of Seattle King Country REALTORS®. You can find his team at SeattleHome.com and BellevueHomes.com.

Could the Supreme Court put an end to open house signs?

This article was originally published on Inman News:

Key Takeaways
  • A recent Supreme Court ruling threatens agents’ ability to display open house signs.
  • Municipalities will be reviewing sign codes and may remove real estate exemptions for expediency.
  • The ruling allows exemptions for compelling state interests, and real estate signage has been cited as supporting Fair Housing laws.

Open house signs dot the sidewalks on a weekend morning — it’s a sight of familiarity for our clients and our businesses.

Based on a recent legal ruling, those signs might disappear in short order.

That’s unless Realtor associations nationwide step up quickly to help their local governments identify the language in the ruling that supports open house sign exemptions in sign codes.

The town of Gilbert, Arizona, recently took a sign code case all the way to the Supreme Court. The town’s ability to regulate the content and manner in which temporary directional signs are displayed is at issue.

The Supreme Court ruling

In short, the court ruled that any sign regulation must be content-neutral so as not to deny free speech. A city can impose restrictions on size, type and placement of a sign — but not the message.

If a city employee has to read the sign to determine whether it complies with municipal regulations, then the regulations are not content-neutral. Therefore, the regulations are unconstitutional.

What does this mean for municipalities?

For decades, Realtor organizations have worked with local communities to craft reasonable sign codes. These regulations allow for responsible placement of open house signs that support consumers, real estate practitioners and their communities.

The Supreme Court ruling will force every municipality with a sign code to re-evaluate their regulations and decide whether they’ve granted exemptions that don’t pass the content-neutral sniff test.

If they currently grant content-based exemptions, they’ll likely see two basic choices:

  • Grant the right to place directional signs to everyone, regardless of content. This means the hardware store, the adult novelty shop and the liquor store can all place A-boards wherever an open house sign can be displayed.
  • Throw out all of the sign exemptions. Don’t allow any businesses to display any directional signs, including open house signs.

The second choice will likely be viewed as the easier, cleaner solution. Legal advice is currently going out to towns across the country asking them to review their policies, and many will lean toward the fastest solution.

There’s one caveat in the ruling, though, and it applies directly to real estate signs. If the content regulation is being applied in pursuit of a compelling governmental interest — and narrowly tailored to that end — some content exemptions are allowed.

The Supreme Court and Federal Trade Commission have, in the past, cited real estate signage as an asset to federal fair housing. These signs create non-discriminating access to housing and are supportive of the Fair Housing Amendments to the federal Civil Rights Act.

Why sign codes for real estate?

Cities create sign codes to limit sign sprawl. If every shop on every street is allowed to drop A-board signs around the block, a city’s rights-of-way quickly become cluttered and unmanageable.

Sensible sign regulations allow for business advertising while still keeping to the community’s desire for an attractive image.

Most businesses don’t require directional signs. They’re in a static physical location, with a permanent address, and they can be found fairly easily by consumers searching them out.

Real estate open houses, on the other hand, are dynamic in location. Each weekend they change, and consumers are led by temporary directional signs to properties that might otherwise not be located on residential streets.

One could say that Internet advertising and GPS-enabled apps have all but removed the need for open house signs, and most consumers find the homes they’re searching for on their computer or phone.

That’s a bit of a myopic big-city view, however. There are still many people who find homes through traditional means, and there are also those who don’t have regular access to online resources.

What would real estate look like without open house signs?

Would the lack of these signs significantly affect the industry? The first and most obvious change would be the reduction of the marketing opportunity to agents.

Agents often base their businesses on the ability to meet new buyers at their listings as well as neighbors who will be future sellers. Without signs on the street, the casual open house visitor might never stop in.

Serious homebuyers will usually find a way to view the properties they are most interested in — open house or not.

But agents who’ve used open houses as a significant source of new clients via the lookie-loos who happen across a sign in the neighborhood would see a drop in business.

And there are still plenty of home sales that happen when buyers walk into a home that they had no idea they’d love until they stepped inside at an open house.

FSBOs vs. sign codes

There would also be a potential benefit to organized real estate. Licensed real estate agents who belong to an MLS might take a firmer grasp on the volume of listing inventory. The open house sign is currently a neutral marketing platform, open to homesellers — licensed or not.

With FSBOs unable to advertise their own open houses through neighborhood open house signs, market exposure of properties on the MLS might become a much bigger value proposition. The FSBO seller would have fewer ways to garner consumer attention and likely be more inclined to list property with a licensed real estate broker.

Safety and fair housing

Realtor safety and homeowner safety might increase with fewer unknown open house visitors. The idea of the open house itself is bizarre to most outside of the industry.

Professionals invite complete strangers into the home of a client who isn’t present. There is a multitude of opportunities in these situations for bad things to happen to the agents or their clients’ property. Fewer open houses might result in better security in general.

On the other hand, fair housing efforts are supported by open house signs. Protected classes and groups who might not have access to certain real estate marketing information cannot be discriminated against when a physical sign invites all comers in a geographic location into a home for sale.

There is still a sizable portion of the population that does not regularly engage in online activities or does not have regular access to the Internet. Physical signs can engage these consumers no matter their social and economic status.

Saving the signs

The fix for the real estate industry is straightforward, though it will require much legwork and expediency. Municipalities don’t like to open up their sign codes. It’s a tedious process.

Their inclination when faced with the SCOTUS ruling will be to throw their hands up and throw all of the signs out. Rather than let their communities be cluttered, they’ll toss out the exemptions.

Education now, before the decision-making processes come about, is necessary to let these municipalities understand their options. The key is to engage local officials before the fear of lawsuits arises.

City councils and their counsel need to know that there is a compelling interest in allowing exemptions for real estate signage:

  • Open house signs increase local home sales, the rate of sales and revenue collection for municipalities.
  • Open house signs improve access for all citizens to housing and support fair housing and non-discrimination efforts.
  • Municipalities can continue their narrowly tailored exemptions based on this content.

City and county governments don’t want to be tied up in lawsuits, which is why their first inclination might be to take all exemptions away. Unfortunately, that will likely create more litigation from real estate organizations that rightfully wish to keep their current signage rights.

By pre-emptively engaging and educating local leaders with this information early, we can preserve the ability to advertise open houses without opening the floodgates of rampant right-of-way signage.

Many thanks to our Realtor staff, volunteer leaders and housing specialists in providing the background for this post.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.

Slowing Seattle home sales only disguise a bigger inventory crunch

This article was originally published on MarketWatch:

The Seattle real estate market saw an intriguing shift this past month. Home sales dropped when compared to the previous month. Total closed sales in the Northwest MLS for October were at their lowest level since April.

With the historic and extended inventory drought that the Seattle real estate market has been under for the past two years, these signs seem to point to a slowdown. Exhausted buyers who have been competing fiercely for a home in one of the nation’s hottest markets might see some relief on the horizon.

Curb your enthusiasm, Seattle home buyers. A deeper reading of the numbers, especially current pending sales, says something quite different.

While overall home sales have dropped in recent weeks, there are a few signs that point to the Seattle market’s competitiveness growing. An obvious factor is the natural seasonal nature of real estate. October is the harbinger of sales volume decreases. It happens every year, like clockwork, on a relative scale. Fall and winter home sales will decrease, no matter the market.

Seattle real estate prices are also showing little sign of slowing down. The median residential sale price in October was $485,300. That was up just slightly from September, and significantly from one year ago when the median was $446,800. That 8.6% clip of appreciation doesn’t lend itself well to the narrative of a slowing Seattle market.

The story is similar for the condominium market in Seattle. The median condo price in King County sits at $297,500, up from $247,500 just last year. 20.2% year-over year appreciation is clearly unsustainable for the long-term, but the market dynamics show no letup. Condo construction in Seattle is far behind demand and it won’t catch up any time soon.

Within the city itself, median condo prices have fluctuated between $295,000 and $422,000 this year, with one new large luxury condo building skewing the month-to-month statistics. Compared to 2014’s range which capped out at $318,000, though, it’s clear that new pricing levels are being set in Seattle and they’re on a significant rise.

Pending home sales in the Seattle region are an even bigger reason to distrust the story line of a slowing real estate market. In 19 of the 23 counties covered by the regional MLS system, pending sales surpassed the new listings added in the past month. Though it seems implausible based on our current lack of inventory, the rate at which buyers are devouring new listings is greater than the rate with which sellers can deliver new listings. Local inventory is still shrinking.

Annually, home sales were up 7% from one year ago. 2014 was a phenomenally hot sellers’ market. That’s a significant year-over-year gain in home sales during a period when the market has added zero inventory. The streak of available homes for sale sitting at around one month is now going on two years. For homes sales to increase during that time and keep inventory rates steady, it’s clear that buyer appetite is keeping up just fine.

Like most statistics, the rate of home sales can be manipulated to look many different ways. It may be a popular trend to view the current slowdown in Seattle of closed sales as a slowdown in the market. That would be a significant mistake. The faux slowdown is just disguising an even greater upcoming inventory crunch.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com

Seattle homes selling in 5 days and over asking price

This article was originally published on MarketWatch:

If buyers in the Seattle real estate market are hoping for a bit of cooling off in the fall, they’re in for a surprise. Home sales are even hotter than they were in the summer, and there’s no sign of slowing down.

Buyer competition and lack of available properties for sale are pushing prices upward and making bidding wars commonplace. Seattle’s inventory of real estate for sale was at just one month in September (a balanced market would have four or five months), and has held at that level for an entire year now. We haven’t seen a constricted inventory market like this since 2006, and nothing on record has been as prolonged.

With the same number of properties being sold every month as come on the market, home buyers in the area have become comfortable with the process of making offers above list prices, and making them the first weekend the home is available. That has pushed the average sale-to-list price ratio to 103.3 percent in Seattle, a number we haven’t reached in a decade. The average home seller is netting significantly more for their home than the advertised price.

The most common situation we see real estate agents employing in the current market is to list a property on a Wednesday or Thursday, and review all offers from buyers on Monday evening. It gives buyers ample opportunity to view the home, but focuses buyer competition at one point in time to maximize the seller’s returns. With the abundant number of buyers in the market, it’s the exception when a well-priced property stays on the market more than a week.

North Seattle home.

The small 1908 North Seattle home pictured here is a perfect example. The 2-bedroom, 1-bath house, was listed for $370,000 and sold just a week later for $446,500. While that bidding war was greater than normal, Seattle median home prices have risen 10.4 percent year-over-year. The median in September hit $551,000.

Much of the boom in Seattle real estate is fueled by technology workers relocating to work at Google, Amazon, Facebook and Microsoft. The Seattle market has become a less-expensive location for tech companies to fight the intellectual labor wars than their traditional homes in the San Francisco Bay area. Housing and salaries in Seattle are pricey compared to much of the nation, but are still significantly less expensive than New York, Los Angeles and San Francisco.

As rent prices continue to rise in Seattle, so does the attractiveness of buying. Many technology transplants view their new location as potentially temporary, so they’re willing to pay a premium for a long-term rental. Corporate rentals have pushed rental prices up significantly in locations like South Lake Union, where Amazon is headquartered. New condo buildings like Insignia will give some new home buying options to local residents, but the rate of condo building in Seattle is still not nearly enough to keep up with the growing population.

If September is any indication, we’re not ready for the usual fall slowdown in Seattle real estate The water is still very, very warm out there.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.

Will RPR fears hold back industry vision for Upstream?

This article was originally published on Inman News:

  • Upstream provides the model for broker-led data management, but the expense of RPR worries brokers.
  • Data management isn’t free. Brokers need to spend to keep up with portals.
  • Inaction based on past failures will only deepen brokers’ loss of control.

Broker conversations about data today usually take on a grim tone. That was the case when I recently moderated an industry panel of MLS and broker executives. The topic was the future of organized real estate, and the conversation was filled with worry that we (the broker-centric world) had lost the ability to manage and profit from our data.

Brokers and agents create the bulk of real estate’s valuable data sources, and then promptly give them away. Technology companies use the data, with few rules attached, and drive the majority of their revenue with it. They charge brokers to advertise adjacent to it.

This sentiment isn’t new, nor is it unique. It’s been around since the first portal website started charging for advertising. The message’s volume has been steadily growing, though. Its simple truths haven’t become any less true.

So when our panel’s conversation moved to the potential of Upstream to right the power structure in the world of real estate data, one would imagine the tone would turn aspirational, hopeful, or determined. It did not. While the concept clearly addressed our biggest concerns and drew significant approval in theory, the outlook was met with skepticism and distrust.

Skepticism’s roots

Unfortunately, this wasn’t a rare instance. Many of the industry folks whom I speak with about Project Upstream begin their conversations with wariness. There are well-founded concerns about the ability to bring such a diverse group of real estate companies together to make the project work.

By and large, though, the fears keep coming back to RPR.

Let’s get the bogeyman out of the way: RPR has cost the National Association of Realtors more than $120 million since its inception. That’s about $120 per member over its lifetime.

New annual expenses for RPR are around $22 million. They’re included in members’ dues (the Second Century Initiatives include RPR, HouseLogic, Real Estate Today Radio, .realtor domain, and eProperty data, at a cost of about $25 per member annually).

Maintaining RPR is a significant expense, one which many brokers feel is too large. It was built to be a revenue-producing tool, and it hasn’t become that. Although many Realtors across the country love and use the tool, adoption rates are still far too low.

Lack of access to MLS data in certain markets hamstrings its ability to provide profitable analytics products (its initial revenue model). Border wars between MLSs, brokers and vendors have created a maze of roadblocks to its adoption.

Moving forward

That $120 million is a sunk cost. It’s gone. RPR has been a failure so far as a revenue producer.

But it’s pivoting. We built a powerful tool, not realizing at the time what its most useful application would be: It’s ready to plug in to the data dashboard that brokers have been clamoring for.

The hottest topic at industry conferences is the desire to take back the management of our data. Unfortunately, many of the speakers get gun-shy when the tools are laid out on the table.

Ignoring how conspicuously RPR fits in to the model of broker-led real estate data management is playing the small game. Brokers are emotionally scarred by past ventures that didn’t go as expected, but we can’t let that drive us into a perpetual state of stagnation. If there’s one thing we can guarantee, it’s that marketing portals won’t be sitting still.

We must demand that RPR is run efficiently in the future as a facet of Upstream. The $20 million a year price tag is a big ticket, though it pales in comparison to the $50 million quarterly losses that advertising portals are taking on to secure a larger portion of the digital real estate pie.

The opportunity to shift the landscape of the industry’s data management isn’t free. Our leaders have to be aware of past mistakes, but not let them paralyze our will to take strategic risks.

After venting fears about RPR, our industry panel had one final related question:

“Considering that data management is the primary concern we’re voicing at the moment, is downplaying Upstream because of questions about RPR a signal that we’re OK doing nothing? Will we be sitting here next year with the same issues, or worse, if we don’t at least attempt to support Upstream?”

There was no answer. That’s because, frankly, we all knew it was the case. Our industry has many intelligent leaders with legitimate concerns about the path going forward. But the inertia of inaction in real estate is often scarier than the uncertainty of change.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.

Justify Your Existence

This post was originally published on Realtor.org:

Changes in technology are creating questions about the future roles of real estate associations, MLSs, and brokerages. As a result, REALTOR® association leaders have been increasingly focused on defining our value to members.

A good friend of mine, who was an engineer at Apple, used to recount Steve Jobs’ version of this value-seeking process. He’d walk into a room of employees and yell, “Justify your existence!”

Maniacal as his temperament was, his goal was focused and strategic. If an employee or an organization can’t succinctly state the value it creates, it won’t be able to justify its existence to its constituents.

Building Justification for REALTOR® Membership

Here in Washington, we’ve been working at the local and state level, along with NAR support, to create a framework for delivering concise messaging that sells the value of REALTOR® membership to real estate licensees. The tacit compulsion of membership for MLS access is a benefit to some markets, but every association needs a non-MLS value proposition as well.

Seattle King County REALTORS® have been working with a communications consultant and creative agency for the past two years to develop a messaging platform for REALTOR® value. Our work may be of value to other boards seeking to improve their engagement with membership, so we’d like to share it with any of our interested counterparts nationwide.

Our associations need an elevator pitch that quickly and succinctly educates members as to why they are REALTORS®. That requires boiling down all that we do into soundbites that are relevant to members.

Segmenting the Value Pitch

While a general elevator pitch for membership can be a good starting point, a more focused set of pitches segmented by audience improves engagement. Our members are diverse in their backgrounds and their roles. They’re also bombarded by advertising messages every day. Crafting narratives that specifically address each of their needs has been the focus of our rebranding (see nwrealtor.com).

segmenting the value pitch

Broker-Owners/Managers

Government affairs and political advocacy are arguably the most important roles that the REALTOR® association serves in the industry. Brokerage owners and managers usually agree. They’re focused on the big picture of a healthy real estate market for their agents.

Delivering news about legislative wins, as well as legal or political threats, is an effective way to engage to this constituency. Company owners regularly tell us that they simply want to hear about how much money we spend on advocacy, and how well we’re doing. They want us involved, and focused, on government affairs.

brokers

Example: “Through advocacy, the REALTOR® Association protects brokers and their agents from onerous financial, legislative, or legal barriers and allows them to build their businesses.”

Agents

Real estate agents, on the other hand, are much less likely to be swayed by the value of political advocacy, and I’ve found they’re often turned off by it. The engaged faithful of our REALTOR® associations are, of course, dedicated to these causes, but most agents are simply focused on sales. It’s our job as involved association leaders to keep our focus on their sales as well.

Real estate salespeople want to sell more homes and take home larger paychecks. An association has to be able to show them how we help them do that. If that’s through advocacy, it has to be directly and visibly linked to the agent’s paycheck.

Member benefits, education, and legal guidance are all services that improve an agent’s bottom line, and that’s how they need to be messaged to the member. If it makes the member more money, state succinctly how it does.

agents

Example: “Our association provides the business support tools and financial protections that allow REALTORS® to sell more homes.”

Seasoned vs. New Agents

The services we promote to our members can be focused on those who will be most likely to use them. New agents need business building education and informational support for learning the framework of the industry. We’re focusing messaging for new members on just those items.

seasoned vs new

The classes that are most valuable to them should be specifically offered to them when they join the organization. Benefits like discounted services, technical support, and a legal hotline need to be immediately promoted to new members to create the first impression of value. An explanation of the direct financial impact of our advocacy efforts on their paychecks will set the tone for their view of REALTOR® membership for the long-term.

Seasoned agents, on the other hand, may need to be reminded of these services, but are also seeking a deeper level of knowledge. They need education about expanding a successful business, building a support team, selling a business for retirement, or becoming involved in leadership.

seasoned vs new 2

Messaging to this group should be significantly different than to a brand new member. Seasoned agents are more likely to have been through an upturn-downturn cycle and be more receptive to the advocacy pitch. It will still need to be focused on their bottom line.

Selling, Not Telling

The overriding theme of the communications audit and creative agency work we’ve done is that we are a sales organization. Seattle King County REALTORS® is selling membership.

selling not tellingAssociations often fall into the mode of telling membership what we’re doing. We talk about our organizational processes. We give annual reports and committee updates. These rarely break through the rest of the marketing noise that our members are faced with every day.

Every time we touch a member, it should be with a sales mindset. Each phone call reinforces value. Every e-mail subject line says, “Open me up because it will benefit your business.” Every dues billing says, “This is why you’ve chosen the value of membership.”

That mindset has been a shift for our board and our staff, but it’s one we’re embracing because it focuses us on our future viability. No matter what technological changes face our industry, if the REALTOR® association is providing clear benefits that our members can see, we’ll continue to thrive as a trade organization.

Our board has spent a lot of time and resources going through this process, but we believe it has been well worth it for our members and the organization as a whole. If your board is going through the same process or would like to engage in it, feel free to contact us. Refocusing our communications by engaging membership with segmented, sales-oriented messaging can benefit any local or state organization.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth. He is 2016 president-elect of Seattle King County REALTORS® and vice-chairman of legislative steering for Washington REALTORS®. You can find his team at SeattleHomes.com and BellevueHomes.com.

Make Connections, Reduce Risk

This article was originally published in REALTOR Magazine:

Our guest editor Sam DeBord looks at how today’s hyperconnectivity has widened business opportunities and created networks of spaces to keep agents safe on the job.
SEPTEMBER 2015 | BY SAM DEBORD

Connections are the currency of our industry. Our professional development and financial success depend on our ability to connect with customers and industry friends. I had the honor of serving as guest editor for this issue of REALTOR® Magazine and learning how the staff links so many of us with the information we need to stay relevant. For years, I’ve contributed online pieces to the magazine working remotely (I’m a managing broker with Seattle Homes Group-Coldwell Banker Danforth in Seattle). Spending time with the team helped me develop a deeper understanding of the publication and a more solid camaraderie with the people behind it.

Technology has allowed us to develop global online connections at breakneck speed. We discuss, argue about, and laugh at our industry with peers we may never have met in person. By the time we share a beverage at a convention together, we’re old friends. I’m excited to build on those connections when I attend my first NAR conference in November. In the convention preview, you’ll find compelling ideas from several conference speakers about how to always be innovating in our business—a kind of sneak preview of the San Diego meeting’s educational highlights.

While today’s hyperconnectivity has vastly broadened our business opportunities, the exposure may also be making our work more dangerous. Our characteristics, habits, and daily routines are available online to anyone who would profile and target us.

This reality hit home when Arkansas agent Beverly Carter was murdered a year ago. In recent years, real estate practitioners have also been murdered in Washington, California, Michigan, Texas, and Ohio. Assaults on our colleagues are being reported regularly. These events snap us collectively back to the reality of our occupational risks, but the concern doesn’t last long enough to instigate broad action.

But some initiatives are underway to change the mindset. The REALTOR® Safe Harbor program is growing in Arkansas, with members sharing their office spaces so people can meet safely. Iowa REALTORS® are taking a safety pledge committing to checking IDs before every showing. At Open Door Partners, we’re compiling a nationwide map of broker, lender, and title offices to make safe agent check-ins easy. Learn more at MeetMeHereFirst.com. These are in addition to NAR’s expanded safety resources available at realtor.org/safety. But all these efforts will be merely lip service if we don’t commit to them.

Let’s go to this year’s conference ready to learn, to be challenged, and to be inspired. Let’s focus on making connections and sharing, not on brand rivalries and office politics. Let’s keep the well-being of our friends and colleagues top of mind. Then, of course, let’s have fun. The REALTOR® Magazine team and I will see you in San Diego.

Sam DeBord

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth, and 2016 president-elect of Seattle King Country REALTORS®. You can find his team at SeattleHome.com and SeattleCondo.com.

Trulia-Zillow fiasco reveals disjoint, opportunities in real estate agent reviews

This article was originally published on The Real Daily:

Remember when there was no MLS? Neither do I, but legends of those real estate dark ages paint a grim picture. Brokerages each held their listings closely, and consumers had to go meet with each of them individually at their offices to try to cobble together a mental picture of the total market.

It was disjointed, full of misinformation, and detrimental to not only the consumers’ needs but also the efficiency of the market.

That’s where we are today with agent reviews

There are no standards, no structured cooperation, and little overlap or sharing. Plenty of companies are building their own review platforms, but they’re almost all proprietary boutiques. The platform builder wants the consumer to use its review tools, but doesn’t want its competitors to have access to those reviews.

Home buyers and sellers are asked by their agents to write reviews for them—on Yelp, Realtor.com, Zillow, (formerly) Trulia, and any agent matching service where the agent would like to appear relevant. Our clients don’t want to jump through these hoops, and they shouldn’t have to. It’s inefficient.

A clumsy attempt to clean up reviews

Zillow is flexing its muscle in the review space because it currently has the best single-location, quick, verified review platform. When it merged Trulia’s reviews into its own platform, it decided that a large portion of Trulia’s reviews had not been verified, and likely could have been gamed by the agents. They were tossed out without notice to the agents.

The act was clumsy, and the backlash from agents who’d lost their reviews was swift. The mea culpa came almost as quickly as Zillow offered to retrieve the purged reviews for any agent who requested them directly. They would not, however, be appearing on the newly merged Zillow/Trulia review platform.

All sites should verify legitimacy of reviews

While the company tripped over its industry relations in the conversion, the strategy of the purge is still a step in the right direction for real estate agent review standards going forward.

Every review platform should be following guidelines that, at a minimum, verify that the client and agent actually worked together. A company that intends to inform the public on the quality of real estate agents’ services should be intently focused on making sure those reviews are real, via mutual admission, property identification, and other means.

Zillow should be praised

Zillow should be commended for pursuing that verification. While real estate listings are gaining nationwide structural standards with RETS, reviews are just beginning the process of setting standards. Just as big of an issue, though, is that portal reviews are just that—single location reviews. Realtor.com reviews can’t be exported or integrated into Zillow’s review platform. Reviews on Homes.com can’t be integrated into the Yelp profile. It’s the same situation on almost every other portal or agent rating website. They don’t speak to each other.

Ironically, the technology companies who built portals to egalitarianize the consumer listing space are now building walled gardens of reviews to bring back the disjoint of the pre-MLS era.

Each proprietary system hopes to force more consumers into its own custom sandbox. They’re funneling buyers and sellers back into the “meet me at my office to see our exclusive listings” mode.

Good for competition, bad for the consumer

While that may be a good business decision in terms of competition, it blunts the progress toward true consumer visibility of broad agent reviews. Buyers and sellers see a small, skewed version of an agent’s reviews on portal websites, with each one portraying a different picture than the last.

Consumers won’t review us on all of the sites necessary, so we get a sprinkling of reviews here, and a dash of reviews there.

All hope is not lost

There is hope, though. As portals up the bar in terms of review verification, companies likeRealSatisfied and Quality Service Certification continue to deepen our view of the kinds of quality standards that are possible on a brand-agnostic level. If standardized requirements for legitimate reviews become common practice, we may be able to cross-reference reviews on different platforms.

Each website could combine reviews as a whole, or at least reference the agent’s reviews from multiple platforms, side-by-side. The ability for a consumer to see our reviews on Yelp, Realtor.com, Zillow, RealSatisifed, etc, in one place, would be a huge boon to consumers’ ability to see who’s really keeping their clients happy.

I hope NAR will lead the charge

I’ve written before than NAR should be the driving force to make this allegiance happen. Even if it doesn’t take shape that way, tech companies in the review space should continue to develop products with these standards in mind for the good of consumers as a whole.

Agents may have experienced some hassle with the Trulia review losses, but that’s nothing compared to many more years of asking clients to do us a favor in a disjointed, time-intensive manner.

If we can improve the verification requirements for reviews, and agree to communicate cross-platform with those who adhere to those standards, we’ll be doing a great favor for ourselves and our clients.

#AgentReviews

It’s REALTOR® Safety Year, and there are no more excuses

This article was originally posted on The Real Daily.

September is Realtor Safety Month. It’s traditionally a time for us to reflect on the physical dangers of our occupation, and then get too busy to make any changes in our businesses. We forget about the issue until the next year, when we’ll reflect again on our associates who were robbed, assaulted, and murdered.

2015 has been different, though. There are a number of brand new causes making real headway for Realtor safety that have the potential to logistically transform how we do real estate sales.

This year, we’re going to remember

So let’s get to the point with what you can do, and why you can’t ignore it any longer:

Remember when Vivian Martin was murdered in Ohio showing her listing?

If you have broker friends like Vivian, they’d benefit from everyone signing on to a policy like that of Iowa Realtors. The Realtor safety pledge, to always meet new clients at an office or verify ID, could alter consumers’ view of how we do business. If it becomes standard practice, it could keep many of our associates out of harm’s way.

Remember when Mike Emert was murdered showing a vacant home in WA?

If you had a friend like Mike, you would’ve wanted your Realtor board to join a cause like Realtor Safe Harbor. State boards across the country are starting to endorse this idea of sharing our office spaces for the mutual safety benefit of our members. It’s putting safety before competition.

Remember when Ashley Oakland was murdered in a model home in Iowa?

You probably have agents in your office who could benefit from safety awareness training. Create a supervised environment for agents like Ashley to work in, and give them the training necessary to avoid dangerous situations.

Remember when Sarah Anne Walker was murdered at a home in Texas?

Agents like Sarah Anne who work with buyers would benefit from a number of smartphone safety apps. She could have gotten a scan of her murderer’s ID and known if he was a long-time criminal before going to that home. Better yet, she could have scared him off by just asking him to text over a picture of his ID before going to the appointment.

Remember when Ann Nelson was murdered in Wisconsin showing a home?

If you have co-workers like Ann, they could use any of NAR’s recommended safety timers, devices, and even jewelry that alert others when they are in distress. At the first signs of trouble, these devices save valuable minutes in getting help to our friends.

Of course, we all remember Beverly Carter’s murder in Arkansas.

You can do something as an individual business to prevent that kind of crime from happening to an agent you know. Sign up your team for Open Door Partners and let agents use your lobby, instead of an empty home, to meet unknown clients.

Realtor safety is a difficult topic to sustain. It’s not glamorous, and it’s not driving dollars into our businesses. It is, though, at the heart of what we do. Real estate is a people business, and if we don’t make our agents’ and brokers’ safety our top priority, we’re just burying our heads in the sand.

The danger is real, and when it hits home, no amount of sales volume can make up for what we’ve lost.

2015 is Realtor Safety Year. Let’s remember this year. Let’s take action.

#RealtorSafety