Technology TransactionsWhat Is Your Time Worth?
With the onslaught of new Web sites and offline business models that rely on Realtor fee modifications, many agents are blindsided by the reality that they really don"t know what their time is really worth.
Two events will lead the Realtor to evaluate how s/he spends her time and which tasks are the most profitable - the proliferation of the online consumer who performs many home buying chores alone, and the advent of fee-for-service business models that cater to the cost-conscious consumer. Their meeting ground is the Internet.
Even if online services are providing leads to agents, a new phenonomon is changing the fee structure paradigm, and that is the fact that younger, online consumers seek information first and the assistance of an agent second. With the agent no longer involved in the transaction from the beginning, the question of how much value the agent brings to transaction is better answered in post-homesearch activities.
Matt Wise, vice president and general manager of Classified Ventures, operator of Homehunter.com, says, "HomeHunter works with agents to show more to the consumer beofre they visit the agent. By the time the consumer reaches the agent, they are closer to buying than they were historically. The consumer is in a position to say "I"m looking for a home, and I"ve found three I like." Wise adds that agents will have to rely more on other expertise besides accompanying buyers to showings in order to bring value to the client.
Wise is supported by an entire online economy built by local MLS organizations all the way to national listing partners such as Realtor.com and Homeadvisor.com. These companies compete on their ability to show online consumers the most bang for their click-throughs, with eye-popping tools such as interactive pictures to nitty-gritty property disclosures. The purpose? To get the buyer one step closer to making a decision.
Another company, HomeGain.com, has just secured $53 million in second round financing. It"s business plan is based on providing blind seller referrals to agents, either with a participation fee or a 15 percent commission upon closing (Editor"s note: other fees may apply.) The caveat? The service is also marketed to consumers - as a means of getting "negotiated commissions from agents," as was reported by the Homegain founder"s other business, a news service.
The new Internet real estate ecommerce has a number of players facilitating the transaction between the consumer and the agent, and by providing the tools to the consumer to gather information preemptively, the agent is compromised in their usefulness to the transaction, unless they can prove of greater worth once the home search has been completed.
The Internet consumer is expecting reduced fees, according to Ed Krafchow, president of Prudential California Realty and Nevada Realty (Northern California.) His company is a network of 110 offices, over 3,000 agents and ranks as the 12th largest brokerage in the United States. He says that the Internet stock rich young home buyers in the Silicon Valley are already clamoring for reduced broker fees. "If it hasn"t hit your area, yet," warns Krafchow, "it will."
The point is not whether agents intend to let commissions be negotiable
but how they will defend their share.
Part II - Fighting Back - Ways to Prove Your Time"s Worth
Also See:
The Big Hole In Your Day
"Time Block" Your Way to Success
Tackle Those Time-stealing Gremlins
Take "I Don"t Have Time" Out of Your Vocabulary