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Re-Imagine Real Estate HAR Strategies Presented by Toni Nelson 2005 Chair of the Houston Association of Realtors.

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Presentation on theme: "Re-Imagine Real Estate HAR Strategies Presented by Toni Nelson 2005 Chair of the Houston Association of Realtors."— Presentation transcript:

1 Re-Imagine Real Estate HAR Strategies Presented by Toni Nelson 2005 Chair of the Houston Association of Realtors

2 Congratulations Greenwood King! Its an honor and pleasure to be here – Its an honor and pleasure to be here – GK has 342 listings with an average sales price of $532,647 [SF,Condo,TH] GK has 342 listings with an average sales price of $532,647 [SF,Condo,TH] YTD – sold 410 listings with an average sales price of $501,000 YTD – sold 410 listings with an average sales price of $501,000 These are more listings sold than… These are more listings sold than… You are the GOLD Standard! You are the GOLD Standard! I will talk fast! Were on steroids. I will talk fast! Were on steroids.

3 Latest Trends in Real Estate Intensification of competition Intensification of competition 1.Traditional competitors 2.New business model competitors 3.Online competitors 4.Third Party Lead Generators Huge influx of members Huge influx of members Confusion of service levels Confusion of service levels Commission compression Commission compression

4 Real Estate Research on Consumers by Zip Realty.com Sellers Sellers 1.Pre-research for 5.5 months 2.Active research for 1.4 months 3.6.9 months before selecting an agent Buyers Buyers 1.Pre-research for 7.1 months 2.Active research for 5.5 months 3.12.6 months before selecting an agent Both Buyers and Sellers enter into a lengthy research process before entering into a transaction. Both Buyers and Sellers enter into a lengthy research process before entering into a transaction. Both Buyers and Sellers choose an agent quickly – take less than 3 days. Both Buyers and Sellers choose an agent quickly – take less than 3 days.

5 Consumer-Centric Era Dawning iPod – personal jukebox that saves me from having to buy an entire artists compilation. iPod – personal jukebox that saves me from having to buy an entire artists compilation. NetFlix - home delivery of movies and a consumer rating site to base my selections. NetFlix - home delivery of movies and a consumer rating site to base my selections. Scion.com – design your own personal automobile and have it delivered to your door. Scion.com – design your own personal automobile and have it delivered to your door. E-Bay started the consumer ratings to give their garage sale site validity. E-Bay started the consumer ratings to give their garage sale site validity. Consumer ratings have proliferated throughout the web and are now in online real estate – LendingTree.com, homegain.com, housevalues.com, ziprealty.com, etc. Consumer ratings have proliferated throughout the web and are now in online real estate – LendingTree.com, homegain.com, housevalues.com, ziprealty.com, etc.

6 The Consumer Dictates the Rules Service – unbiased rankings Service – unbiased rankings Savings – lower transaction costs Savings – lower transaction costs Selection – Choose the broker that meets their needs. Selection – Choose the broker that meets their needs. We cant TELL them WHAT they want – they want to TELL us. We cant TELL them WHAT they want – they want to TELL us. Competitors compete on price ONLY because they have no value proposition. Competitors compete on price ONLY because they have no value proposition.

7 Dawn of the Consumer-centric era Real estate has shifted into the power of the consumer. Real estate has shifted into the power of the consumer. Industry is still stuck in an agent-centric paradigm Industry is still stuck in an agent-centric paradigm Army buildingArmy building Lack of licensure standardsLack of licensure standards Disenfranchising customer base.Disenfranchising customer base. New entrants see huge opportunity.New entrants see huge opportunity. Top Three Most Visited Real Estate Web Sites? Top Three Most Visited Real Estate Web Sites? www.Realtor.comwww.Realtor.comwww.Realtor.com www.homeadvisor.comwww.homeadvisor.comwww.homeadvisor.com www.forsalebyowner.comwww.forsalebyowner.com

8 Fast Company – November 2004 101 Trends in 2005 # 55 – Real estate agents will be a thing of the past if Home Depot is successful. # 55 – Real estate agents will be a thing of the past if Home Depot is successful. For $12.95 – H.D. offers a yard sign and allows you to load multiple pictures and data onto FSBO.com. For $12.95 – H.D. offers a yard sign and allows you to load multiple pictures and data onto FSBO.com. FSBO.com requires buyers to get pre-approval online before they can make an appointment with the seller to take a physical tour of a property. FSBO.com requires buyers to get pre-approval online before they can make an appointment with the seller to take a physical tour of a property. Home Depots web site features rich detail on everything you need to know to sell your home yourself. You can do it. We can help! Home Depots web site features rich detail on everything you need to know to sell your home yourself. You can do it. We can help! Now the only place we will see loud blazers is at the country club. Now the only place we will see loud blazers is at the country club. Anti-Realtor ads - BuyOwner.com and OnePercentRealty.com Anti-Realtor ads - BuyOwner.com and OnePercentRealty.com

9 Consumers Question Our Value!

10 The Latest Agent Comparison

11 Rise to the Online Marketing Challenge! Fact 1: 74% of all home buyers in the first 6 months of 2004, used the internet to search for a home. Fact 1: 74% of all home buyers in the first 6 months of 2004, used the internet to search for a home. Fact 2: 81% of Internet home buyers use a Realtor while only 66% of the traditional home buyers use Realtors. Fact 2: 81% of Internet home buyers use a Realtor while only 66% of the traditional home buyers use Realtors. Fact 3: Internet home buyers tend to purchase more expensive homes and pay more for homes than traditional buyers. Fact 3: Internet home buyers tend to purchase more expensive homes and pay more for homes than traditional buyers. Average internet home buyer looks at 6 houses, takes 2 weeks to buy and purchases an average home of $470,000, according to CAR.Average internet home buyer looks at 6 houses, takes 2 weeks to buy and purchases an average home of $470,000, according to CAR. Average traditional buyer looks at 15 houses, takes 7 weeks to buy and purchases an average home of $350,000.Average traditional buyer looks at 15 houses, takes 7 weeks to buy and purchases an average home of $350,000. Fact 4: 99% of Internet homebuyers [84% very useful – 15% somewhat useful] consider multiple property photos to an online listing to be useful! Fact 4: 99% of Internet homebuyers [84% very useful – 15% somewhat useful] consider multiple property photos to an online listing to be useful!

12 HAR Listings with Pictures – First Quarter 2004

13 HAR-MLS Picture Research HAR ran 2004 year-end statistics on "time on the market" for listings featuring multiple pictures and those featuring no pictures. HAR ran 2004 year-end statistics on "time on the market" for listings featuring multiple pictures and those featuring no pictures. 80.5 days for listings with nine or 10 pictures.80.5 days for listings with nine or 10 pictures. 91.5 days for listings with one or two pictures.91.5 days for listings with one or two pictures. 109 days for listings with no pictures109 days for listings with no pictures Research shows that listings that feature 6 or more pictures of the home, get viewed 228% more than homes with few or scanty photos. Research shows that listings that feature 6 or more pictures of the home, get viewed 228% more than homes with few or scanty photos. The Top Two features that 99% of consumers want when searching for a home on the web are The Top Two features that 99% of consumers want when searching for a home on the web are 1.Multiple photos 2.Rich property detail

14 This is Scary! Go to www.ebay.com Go to www.ebay.comwww.ebay.com It is the worlds largest For-Sale-By- Owner site of products, and some real estate. It is the worlds largest For-Sale-By- Owner site of products, and some real estate. Type in the search area, Kitty Condo Type in the search area, Kitty Condo 4 foot Kitty Condo selling for $79.95 4 foot Kitty Condo selling for $79.95 Can you guess how many pictures are featured? Can you guess how many pictures are featured? Answer: 18 Answer: 18

15 IDX and the Realtors Image IDX – Internet Data Exchange, is the method by which most real estate web sites receive listing information. IDX – Internet Data Exchange, is the method by which most real estate web sites receive listing information. The data on your web site is the same as all MLS listings that can be viewed from www.har.com. The data on your web site is the same as all MLS listings that can be viewed from www.har.com. The consumer thinks YOU are providing the image and data on your web site and holds YOU responsible for all of the listing content. The consumer thinks YOU are providing the image and data on your web site and holds YOU responsible for all of the listing content. Consumers have e-mailed web masters of our member sites asking for more pictures – cant provide, it is some other brokers listing! Consumers have e-mailed web masters of our member sites asking for more pictures – cant provide, it is some other brokers listing! You have a right to project your image the way you see fit, but when everyones image is affected – the standards must go up! You have a right to project your image the way you see fit, but when everyones image is affected – the standards must go up!

16 Raising the Bar in MLS On February 14, we passed a 6 picture minimum and a 16 picture maximum which went into effect on March 3. On February 14, we passed a 6 picture minimum and a 16 picture maximum which went into effect on March 3. Rules to provide complete property detail before uploading into MLS are being upgraded with fines. Rules to provide complete property detail before uploading into MLS are being upgraded with fines.

17 Raising the Bar in E-Mail Response Rates Fast Response time is critical – 80% of consumers do business with the first person to respond, but 50% of inquiries never get a response. Fast Response time is critical – 80% of consumers do business with the first person to respond, but 50% of inquiries never get a response. Research findings are that an agent must be: Research findings are that an agent must be: 1.First to contact the prospect 2.Fast to respond to the request and 3.Frequent in staying in touch While it is difficult to be tied to a computer 24-7, help is on the way! While it is difficult to be tied to a computer 24-7, help is on the way! HAR in a joint venture with NAR will provide VOIP – e-mail leads to the cell phone in the very near future! HAR in a joint venture with NAR will provide VOIP – e-mail leads to the cell phone in the very near future!

18 Advertising the Value of a Realtor HAR has a cracker jack marketing and P.R. department. HAR has a cracker jack marketing and P.R. department. A $250,000 television advertising campaign is currently running to advertise the value of a Realtor. A $250,000 television advertising campaign is currently running to advertise the value of a Realtor.

19 HAR.COM In June, har.com had 78 million page views In June, har.com had 78 million page views Providing 47,745 leads to agents Providing 47,745 leads to agents We are indeed fortunate to have this powerful site working for all of us. We are indeed fortunate to have this powerful site working for all of us. VOIP critical to keeping the consumer coming back! VOIP critical to keeping the consumer coming back! Leverage the value to benefit you. Leverage the value to benefit you. A Brand Called You A Brand Called You Follow the Money Follow the Money

20

21 Best Practices An Independent Contractor made my Dell Computer. An Independent Contractor made my Dell Computer. Dell has standards, a set of best practices and holds their I.Cs accountable for precision work. We should too! Dell has standards, a set of best practices and holds their I.Cs accountable for precision work. We should too! HAR recently helped seed the newly formed Real Estate Standards Institute in an effort to enable members that aspire to a higher standard HAR recently helped seed the newly formed Real Estate Standards Institute in an effort to enable members that aspire to a higher standard 1.to meet best practice guidelines that have been set forth and 2.To be certified. 3.Go to www.touchstoneforexcellence.com for a copy of these practices. www.touchstoneforexcellence.com Transparency will rule and your standards of service, recorded by the receiver of the service, will be visible for the world to see. Maybe a consumer Blog site for real estate. Transparency will rule and your standards of service, recorded by the receiver of the service, will be visible for the world to see. Maybe a consumer Blog site for real estate. They already are visible on Homegain, Lending Tree and e- Bay is entering the arena. They already are visible on Homegain, Lending Tree and e- Bay is entering the arena. My vision is that one day, we will post consumer responses on har.com and our own web sites. My vision is that one day, we will post consumer responses on har.com and our own web sites. Quality Service Certification already has it available. Quality Service Certification already has it available. Lets learn from those that have re-imagined our business and designed a ranking system on the web. Lets learn from those that have re-imagined our business and designed a ranking system on the web.

22 Re-Imagine Real Estate! Look for a day where a natural part of our MLS is a Transaction Management Platform, and becomes one integral system. It must happen so we remain in control and central to the transaction. Look for a day where a natural part of our MLS is a Transaction Management Platform, and becomes one integral system. It must happen so we remain in control and central to the transaction. Look for a day when those that aspire to leadership positions at HAR, Look for a day when those that aspire to leadership positions at HAR, go through a highly intensive Leadership Program to prove their commitmentgo through a highly intensive Leadership Program to prove their commitment to our profession, to our profession, our community and come to our community and come to lead our association with a broader perspective. lead our association with a broader perspective.

23 Other Issues We have enlightened you on mortgage fraud and sent out numerous messages enumerating red flags in mortgage fraud. We have enlightened you on mortgage fraud and sent out numerous messages enumerating red flags in mortgage fraud. We want our Realtors to be safe in their practice. We want our Realtors to be safe in their practice. SOS – Sold On Safety program with the Police Department as partners for 45 or more attendees.SOS – Sold On Safety program with the Police Department as partners for 45 or more attendees.

24 Working on the Future We are conducting a survey of Houston Home buyers and sellers by UH Center for Public Policy: We are conducting a survey of Houston Home buyers and sellers by UH Center for Public Policy: Source of finding their Realtor.Source of finding their Realtor. Source of finding information on homes.Source of finding information on homes. Overall opinion of the RealtorOverall opinion of the Realtor Do they view rankings of Realtors as important?Do they view rankings of Realtors as important? Would they want a secure web site that gave the status of their home sale available online 24/7?Would they want a secure web site that gave the status of their home sale available online 24/7? Share results with members for better strategic planning.Share results with members for better strategic planning.

25 Working on the Future The Realtor organization was founded on 3 core values: The Realtor organization was founded on 3 core values: 1.The Code of Ethics – process is Industrial Age, needs streamlining for faster results. 2.Education – continuous improvement of our profession. 3.The only and largest Political Action Committee dedicated to the protection of private property rights and the free and easy conveyance of property without undue governmental burden or taxation.

26 Looking to the Future We are at a crossroads. We are at a crossroads. The more we advertise www.har.comThe more we advertise www.har.comwww.har.com The more we advertise the value of a RealtorThe more we advertise the value of a Realtor The more the public views our association as an avenue of restitution when some Realtors does them wrong.The more the public views our association as an avenue of restitution when some Realtors does them wrong. We need a vehicle for a speedy and economical resolution. We need a vehicle for a speedy and economical resolution.

27 Other Issues My proudest moment in the Texas Legislature – My proudest moment in the Texas Legislature – After working for 3 years to get TREC to clarify the Minimum Services Rule to no avail After working for 3 years to get TREC to clarify the Minimum Services Rule to no avail The Texas Legislature and Governor Rick Perry unanimously wrote Minimum Services into law. The Texas Legislature and Governor Rick Perry unanimously wrote Minimum Services into law.

28 TAR Legislative Objectives 1. Reduce property taxes while adequately and fairly funding our public schools. 2. Prevent measures that would further increase the cost of homeownership in Texas – we rank 45 th out of 50 states in homeownership levels. 3. Protect the interest of Realtors, homeowners and other property owners in the state.

29 Texas was founded on the principle of protecting private property. Realtors® are dedicated to the principle of protecting and preserving the rights of property owners in Texas.

30 TREPAC TREPAC The legislature closed without an answer to property taxes or school finance issue. – There is currently a special session trying to resolve this. – We are still funding lobbyists to talk to elected officials so that a tax on your commission or real estate transfer tax is not an option. – Last Monday, at 4:00A.M., the legislature almost passed a bill to double our licensure fees. Our lobbyists stopped it. – We also filed an Amicus Brief negating the Supreme Court decision on Eminent Domain. The House of Representatives did also. – From now until July 31, donate to TREPAC, Sunset Dinner Cruise for 8 - $35 gets one chance and $99 gets 3 chances for the cruise.

31 I invite you to be a Change Agent. Growing number of members that are innovators, leaders and change agents. Growing number of members that are innovators, leaders and change agents. They will help to reshape our industry for good, for better, forever They will help to reshape our industry for good, for better, forever Never think that a small group of dedicated, committed individuals cannot change the world. Never think that a small group of dedicated, committed individuals cannot change the world. Thats the only way that change has ever happened. Thats the only way that change has ever happened. To the proud professionals of Greenwood King – thank you for making a difference! To the proud professionals of Greenwood King – thank you for making a difference!

32 Property Tax Appraisal Caps vs. Revenue Caps [Truth in Taxation]

33 Commonalities Both camps want the same thing. Both camps want the same thing. 1.We want to lower property taxes in the state of Texas. 2.We do not want a short-term fix where the appraisal creep over time wipes out the savings.

34 Property Tax Appraisal Caps 301 Sunny St 302 Sunny St Current Appraisal $75,000$75,000 Appraisal value -15 yrs 5% cap $148,495$148,495 Mkt. value assuming 7% growth in value $193,390$193,390 Sold in 15 years NOYES Appraisal Value in 16 th year $148,495$193,390 Property Taxes due in 16 th yr.[assuming $2 per $100] $2969.90$3867.80 DIFFERENCE+$897.90

35 Property Tax Appraisal Caps Property Tax Appraisal Caps dont lower taxes – they just create inequities for taxpayers and havoc in the tax system. Property Tax Appraisal Caps dont lower taxes – they just create inequities for taxpayers and havoc in the tax system. Taxpayers resent their neighbors paying less in taxes on the same size property. It leads to unfair taxation. Taxpayers resent their neighbors paying less in taxes on the same size property. It leads to unfair taxation. Lowering the tax appraisal cap from the current 10% will: Lowering the tax appraisal cap from the current 10% will: Discourage home salesDiscourage home sales Freeze people into their homesFreeze people into their homes Create an unstable revenue sourceCreate an unstable revenue source California Prop 13 shows long-term effects.California Prop 13 shows long-term effects.

36 Interesting Facts about NAR Homebuyers in the Survey 40% were purchasing for the first time. 40% were purchasing for the first time. The median age was 39 years of age. Largest age sector was 25-34 or 32% The median age was 39 years of age. Largest age sector was 25-34 or 32% 24% of first-time home buyers identified themselves as African, Asian or Hispanic. 24% of first-time home buyers identified themselves as African, Asian or Hispanic. 21% purchased a new home 21% purchased a new home The majority of buyers rated neighborhood quality as the most important factor. The majority of buyers rated neighborhood quality as the most important factor.

37 Interesting Facts about Home Sellers 82% bought a single-family detached home. 82% bought a single-family detached home. Had owned their home 6 years. Had owned their home 6 years. 55% purchased a home larger than the home they sold. 55% purchased a home larger than the home they sold. 73% of sellers contacted only one agent before listing their home. 73% of sellers contacted only one agent before listing their home. When choosing an agent, 54% thought an agents reputation was the most important factor. When choosing an agent, 54% thought an agents reputation was the most important factor. 24% of FSBOs thought that getting the price right was the most difficult task when selling their home. 24% of FSBOs thought that getting the price right was the most difficult task when selling their home. 24% of FSBOs indicated fixing up the home for sale was the most difficult. 24% of FSBOs indicated fixing up the home for sale was the most difficult.

38 FSBOs According to NARs 2004 Survey of Home Buyers and Sellers, 69% of FSBOs said that they sold FSBO because they did not want to pay the commission. According to NARs 2004 Survey of Home Buyers and Sellers, 69% of FSBOs said that they sold FSBO because they did not want to pay the commission. However, in a home price selling comparison in the same survey, FSBOs sold their home for an average of $163,800, while those that were agent assisted sold for an average of $189,000. However, in a home price selling comparison in the same survey, FSBOs sold their home for an average of $163,800, while those that were agent assisted sold for an average of $189,000. Therefore, while saving 6% on the commission, FSBOs lost 15% of their homes value by going on their own. Therefore, while saving 6% on the commission, FSBOs lost 15% of their homes value by going on their own.

39 Marketing Information Sources Used in Home Search Information Sources Used in a Home Search 1995200120032004 Real Estate Agent 86%79%86%90% Newspaper Ads 51%41%49%53% Internet2%41%71%74% For 2 years in a row, more buyers use Internet as an information source than they do the newspaper.

40 What Homebuyers Were Looking for Online Properties for sale93% Properties for sale93% Information about an area21% Information about an area21% A real estate company 5% A real estate company 5% A real estate agent 3% A real estate agent 3%

41 Top Ways Buyers Found Agent 44% referred by [or is] a friend, neighbor or relative 44% referred by [or is] a friend, neighbor or relative 13% Used agent previously to buy or sell a home. 13% Used agent previously to buy or sell a home. 8% saw contact information on For Sale Sign 8% saw contact information on For Sale Sign 7% saw agent on an Internet site 7% saw agent on an Internet site 6% visited open house and met agent. 6% visited open house and met agent. 5% walked into/called office and agent was on duty. 5% walked into/called office and agent was on duty.

42 What Buyers Want Most from Agent 54% want agent to help them find the right house. 54% want agent to help them find the right house. 10% want agent to tell them how much home they can afford. 10% want agent to tell them how much home they can afford. 10% want help with negotiations. 10% want help with negotiations. 10% want help with paperwork. 10% want help with paperwork. 8% want agent to tell them what comparable homes are selling for. 8% want agent to tell them what comparable homes are selling for. 5% want help to find and arrange financing. 5% want help to find and arrange financing.

43 Method Used to Find a Listing Agent 38% Referred by [or is] a friend, neighbor or relative 38% Referred by [or is] a friend, neighbor or relative 31% Used agent previously 31% Used agent previously 7% Agent personally contacted them. 7% Agent personally contacted them. 4% Visited open house and met agent 4% Visited open house and met agent 4% Referred by another real estate broker. 4% Referred by another real estate broker.

44 Most Important Factors in Choosing a Listing Agent 54% Reputation of real estate agent 54% Reputation of real estate agent 19% Agents knowledge of the neighborhood. 19% Agents knowledge of the neighborhood. 8% Agents association with a particular firm 8% Agents association with a particular firm 4% Agents professional designations held by agent. 4% Agents professional designations held by agent.

45 What Sellers Want Most from a Listing Agent 25% Help to sell the home within specific time frame 25% Help to sell the home within specific time frame 25% Help find a buyer for home 25% Help find a buyer for home 23% Help seller to price home competitively 23% Help seller to price home competitively 12% Tell seller how to fix up home to help sell it for more. 12% Tell seller how to fix up home to help sell it for more. 6% Help with paper work 6% Help with paper work 4% Help with negotiations 4% Help with negotiations

46 Why Rank by Quality? Quality Service Certification addresses the fact that real estate service is an unmanaged process. Quality Service Certification addresses the fact that real estate service is an unmanaged process. Service delivery remains the invisible domain of the sales agent. Service delivery remains the invisible domain of the sales agent. Brokers abdicate responsibility, and most base rewards on productivity, with no reward for quality customer care. Brokers abdicate responsibility, and most base rewards on productivity, with no reward for quality customer care. Therefore, each service experience produces unique outcomes based on the preferences, practices and idiosyncrasies of each individual service professional. Therefore, each service experience produces unique outcomes based on the preferences, practices and idiosyncrasies of each individual service professional. Its a mom and pop business mentality in what has become a big business arena. Its a mom and pop business mentality in what has become a big business arena. Where quality is uncertain, price increasingly becomes the more certain determinant. Where quality is uncertain, price increasingly becomes the more certain determinant. Can any business survive in a consumer centric environment, where independent agents choose independently how to serve their client? Can any business survive in a consumer centric environment, where independent agents choose independently how to serve their client? Your broker should consider adding a Quality Service Assurance Program because online competitors already have. Your broker should consider adding a Quality Service Assurance Program because online competitors already have. Lending Trees research found that consumers want an agent rating system. They feel more confident with consumer rating systems than the self-proclaimed statements made by brokers and agents. Lending Trees research found that consumers want an agent rating system. They feel more confident with consumer rating systems than the self-proclaimed statements made by brokers and agents. More and more third party agent rating web-sites, appear everyday. We need to give the consumer what they want or they will get it somewhere else. More and more third party agent rating web-sites, appear everyday. We need to give the consumer what they want or they will get it somewhere else.


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