So I’m selling the house I’ve lived in for the past 22 years, and the experience is much different this time around. One example is how the house is being marketed by our veteran real estate pal, Peggy. “Older clients want to see their home advertised prominently in the newspaper,” she told me. Instead, she gently explains to them that only older people respond to newspaper ads, “and those are not the people who will be buying your house.” Today’s potential buyers find homes using one of multiple apps—Zillow, for instance, or the local multiple listing service online.
There’s another difference: The traditional lockbox on a home for sale has changed. The lockbox looks the same from the outside—a clumsy looking device that hangs off the doorknob with the house’s key inside. However, the sales agent now uses an app to unlock it.
When I mentioned this in passing to Ram Nagappan in an interview in early December, the Pershing chief information officer’s eyes lit up. “Of course! They can monitor who viewed the house, how many times they’ve come to the house” and how long the agent and prospective buyer stayed.
The agent and the real estate firm also have access to—and provide to the seller—the number of times a prospective buyer (or other agent) has viewed the home’s listing on the MLS site, and how many prospects have “favorited” the home online. Beyond assuaging the seller’s concerns about how well the house is being perceived, those reports clearly inform the sales agent and real estate’s marketing and sales strategies.
The ways home sellers now interact with their realtors correlate with how advisors market and sell their services and how prospective clients find and employ advisors. Successful advisory firms are already using social media and big data to market themselves—and smartly successful advisory firms are using everyone in their firms, especially younger digital-native employees, to tell their firm’s story in places other than traditional media channels.
I should mention that the realtor still plays a unique role in the successful selling of a house, from both the seller’s and the buyer’s perspective. Finding a home that looks attractive on a website is only the beginning of the sales process. First, there’s lots of data that a buyer or seller can find online, from what the taxes or association fees are and what the house last sold for to the ratings of the local school system or even the crime rate.
But the good realtor also has access to what “comps” in the neighborhood sold for, which helps the buyer or seller to determine how realistic a home’s listed sales price is. An experienced realtor has a network of home inspectors, contractors and mortgage experts she can call on. Finally, she tends to know who the listing agent is and how the buyer’s or seller’s real estate firm operates, which can be very helpful in determining the mind-set of the seller or buyer, coming up with a listing price or offer, and helping the buyer or seller know exactly what they can expect at a closing in terms of dollars and cents.
Trolling that network also often results in referrals of likely buyers or new sellers. Oh, did I mention that there’s an agreement that the buyer and seller gets that discloses exactly what they will be paying in commissions and what they’ll get for those fees? (In New Jersey, at least, the commissions are negotiable. Really.)
I’ll leave it to you to draw all the obvious specific comparisons between realtors and advisors.
Changing technology and demographics constitute a challenge for advisors who want to succeed and grow now and over the next, say, 35 years—which not by coincidence is how long this magazine has been published. Our cover story suggests five trends that advisors must embrace to be successful now and in the future. Smart advisors are already doing so; so should you, and with any luck we’ll be around for the next 35 years to help you figure it out.