Realtors invest heavily in technology with more than half of brokers, sales agents, associate brokers and managers saying they spent more than $1,000 in 2006, and 25 percent spend $2,000 or more, according "The 2007 Realtor® Technology Survey," a new survey conducted by the National Association of Realtors' Center for Realtor Technology.

The question is -- are they getting their money's worth?

Approximately two-thirds of those surveyed have a real estate business website, and a quarter spends more than $1,000 annually to maintain their site. Nearly all of these sites -- 93 percent -- provide listing search capabilities. Other than their own website, the most popular sites for Realtors to display their listings include the local MLS, their broker’s website and REALTOR.com. 

Yet, in the just-released Member Survey 2007, NAR found that all Realtors are earning less due to increased competition, grossing a median of $47,700 annually, down from $49,300 in 2004 and $52,200 in 2002.

Median business expenses are approximately 25 percent of gross for Realtors, no matter what the earnings. For Realtors with gross personal incomes of less than $10,000, their business expenses were $2,410. Those earning $150,000 spent a median of $36,170 in 2006.

While the business expense breakdown includes such categories as promotion and marketing expenses, as well as others, Realtors spent a median of $820 on the technology products and services category in 2006. What is difficult to determine is how much of promotion and marketing expenses was technology-related. Realtors spent a median of $1,050 to promote and market themselves in 2006.

For example, 61 percent of Realtors have websites for business use. They spent a median of $300 annually to maintain their websites with one-third spending as much as $500 annually to do so. The more spent for maintenance the more inquiries -- those who spent no money to maintain their websites had two inquiries while those who spent more than $1000 annually had a median of 16 inquiries.

Yet, websites generated a shockingly low percentage of leads, suggesting they're more suitable for information-gathering by existing clients or prospects than as lead generators. The median number of customer inquiries originating from Realtor websites was a paltry four. Eleven percent of Realtors said they had received more than 50 inquiries, up from eight percent in 2005.

Such figures could cause Realtors to rethink where and how they spend their money. Service providers should consider developing greater technology services that facilitate communication and information delivery over lead generation capabilities.

Why? The technology survey respondents cite referrals and repeat business as the top sources for generating the greatest number of leads. One-third of respondents said that more than half of their business comes from referral clients, which makes staying in touch with current and past clients crucial to a Realtor’s success. The most popular way to maintain relationships with current clients is through phone calls (48 percent) and e-mail (39 percent).

Two-thirds of Realtors continue to communicate with their former clients at least once or more every quarter. The methods, however, have changed. Electronic newsletters have gained in popularity as a way to stay in touch with former clients; other favored methods are mailings and market updates. By comparison, the telephone has fallen out of favor; in 2005, one of every three Realtors® picked up the phone to reach out to former clients, but less than 1 percent of Realtors® in the current survey relied on phone calls to stay in touch with their past client base.

This squares with the NAR's member survey which found that one out of five residential Realtors reported that up to 25 percent of their business was from referrals or repeat customers and 27 percent reported that more than 50 percent of their business in 2006 came from referrals and repeat customers.

Where Realtors could use some help competing on and off the Internet is the most widely used tool -- the Comparative Market Analysis, which compares a home to similar properties that have sold in an area, suggests Lesswing. Ninety-four percent of those surveyed include a CMA as part of their listing presentations, and most Realtors® are satisfied with the program. However, 35 percent thought the program could be improved by offering the ability to personalize designs and making it easier to use.

The most popular devices Realtors® use in their day-to-day business include digital cameras, desktop computers and cell phones -- all information delivery and communication devices. The survey also revealed the growing popularity of smart phones or PDAs, which provide phone, Internet and e-mail capabilities. In 2005, only 8 percent of respondents used a smart phone compared to 28 percent in 2006, and as many as 30 percent of respondents plan to purchase or replace one in the coming year.

“Realtors® have invested a lot of time and millions of dollars in building and improving real estate technology, and the demand for additional technology is high,” said Mark Lesswing, NAR senior vice president and chief technology officer. “While eight in 10 Realtors® think the current technology supplied by their broker is valuable, two-thirds would like their broker to expand the amount of technology offered. Eighty-four percent of those surveyed were also interested in augmenting the technology and services offered by their Multiple Listing Service.”