How the Next Wave of Buyers Will Change the Real Estate Business

Written by Posted On Thursday, 16 May 2019 09:18

Millennials are entering the housing market, and they're going to bring some big changes.

They've grown up expecting the convenience of Amazon Prime and Netflix. When they want to buy something or watch a movie, they just hop on an app, and it's done in seconds. These apps also remember user preferences and offer personalized experiences. The real estate process is a long way from these streamlined, customized, and convenient end-to-end experiences. But change is coming.

Data and the New Real Estate Process

With sites and apps like Zillow and Trulia, we've already seen the beginnings of the data revolution in real estate. Prospective homebuyers can discover substantial information on the listings in their area quickly and easily.

As apps and companies like these continue to grow, we will see consolidated data becoming more important in the homebuying process. Listings with photos, descriptions, prices, locations, and so on are already used extensively, but customer data will be fed into them, as well, creating personalized experiences.

With these new oceans of data comes one important question: Who owns it all? There are two possible scenarios: a handful of entities (or even just a single one) could control everything, similar to the way Amazon owns shopping preference data on millions of people around the world. Or real estate data could become more open-sourced and democratic, with everyone sharing freely.

Regardless of who owns the new sources of real estate data, the old information source is dying. The multiple listing service is almost completely irrelevant to consumers. Why would they go through an agent to get information that's found more easily on their smartphones? Some real estate professionals defend the MLS, arguing that its information is more trustworthy. Only certified agents can enter MLS data, and it's further regulated by a board. 

But will the Millennial homebuyer care? After all, they don't mind that Uber drivers don't have taxi licenses. Industries change significantly when data and technology lead to dramatic increases in convenience and decreases in cost.

The New Real Estate Professional

If this information scares real estate agents, it should. There are going to be fewer of them in the future. Clelia Warburg Peters, president of Warburg Realty, warns that "the number of real estate agents in the United States 10 years from now will be significantly reduced."

This is not to say that agents will disappear altogether. In fact, some will thrive. New technologies mean that empowered individual agents will become exponentially more productive and give teams access to previously unattainable scale.

The remaining group of agents will be smaller but more powerful. They will become more like miniature media companies, combining their hyper-local knowledge and brand presence with universally connected technology.

The Skills Needed to Survive the Generational Shift

Access to the MLS and a few billboards around town won't be enough to convince Millennials to work with an agent. It will take the savvy use of technology and marketing.

The first step is an online personal brand. A real estate professional's online presence needs to be more than just a website with a profile picture and a listing of properties. An agent's online presence should be both informative and relatable.

And connection shouldn't be taken lightly. Millennials value an emotional connection with brands. In fact, 60% of Millennials in a recent survey showed a preference for purchases that reflect how they want to be perceived. Real estate is no different from other markets in this regard. After all, your home is a huge reflection of yourself.

Social media is the best tool to show off houses that buyers can connect with. But the execution is critical. High-quality pictures with compelling captions will draw buyers in, but lazy posts will just be scrolled past. To cast the widest net without losing focus or sacrificing quality, an agent should focus on two or three platforms. Because of its visual nature, Instagram is the perfect platform for real estate. An agent could quickly build a following with a well-executed account that connects on a personal level.

Beyond social media, a strong website provides another way for homebuyers to learn about agents and their properties. It's also something many agents are lacking: According to a recent survey, only 49% of real estate agents have a personal website. In addition to basic contact information, real estate websites can include blog posts and informational articles to draw in readers.

With all of these options, agents have the opportunity to build bigger audiences than ever before. And because technology makes the whole process easier, it's possible to grow without scaling labor.

The next generations are nuanced groups, and real estate marketing efforts won't be straightforward. Agents need to maintain a consistent presence without coming off as scammy, a quality that the younger generations detest. They need to connect with future customers on a personal level, with well-crafted content and personalized data.

The next generation of homebuyers will change how real estate is done. But learn what works for them, and they'll open their doors to you.

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Malte Kramer

Malte Kramer, MBA, is the founder and CEO of Luxury Presence, a company that's building the next generation of real estate software. Malte is also the author of "Play for Something," a book that provides student athletes with the inspiration, strategies, and know-how they need to succeed in the classroom and beyond.

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