Maintaining Your Value as a Real Estate Agent in the Digital Age
July 30, 2018
Team Leader, Sibbach Team, RealtyOneGroup
Real estate agents are under immense pressure today from outside forces. Unlike the industry most of us came up in, the important early buying period is largely out of our control: aggregators and iBuyers are influencing potential buyers well before we become involved. And because we’re not initially there to guide buyers, our role is diminishing.
Buyers used to come to you and say, “I want to see some four bedrooms in this area.” If you showed them a home that didn’t exactly meet their criteria but they liked the overall house, they were already in it and could overlook some of the less-than-ideal characteristics. They were emotionally involved.
Now, they’re picking out the major criteria themselves without the advice of a real estate agent or a trusted adviser. They can control what they see and what they don’t see with filters. The combination of HGTV-inspired design awareness and aggregators has changed the demand curve. They may not even see your listing because it doesn’t fit their search parameters.
As the representative of the seller, how do you counter this? Unfortunately, the most common solution is to suggest a price reduction. But if price is the only suggestion we offer to sellers, what is our value? Pricing can now be done by a computer! Let’s look at steps we can take to demonstrate value and help sellers get top dollar.
Understand “functional obsolescence”
Let’s say a home has a low number of bathrooms relative to its square footage. The house is over 3,000 square feet and it has two and a half baths. When we were in control of the search process, buyers didn’t know they had more options than the standard two and a half baths. It wasn’t as important as it is now, because we were in control of the search process. Plus, when we showed the house, we had the impact of emotions on our side.
Now, having fewer baths may actually reduce the value because consumers have upgraded expectations. This is an example of what I call “functional obsolescence”: those relatively small but consequential criteria — like the number of bathrooms per square foot — that remove your listings from search results.
Knowing the pros and cons of a home can help you pinpoint functional obsolescence. If you can address those issues, the home can go from average to spectacular, rank higher in search engine searches, and get top dollar for your seller.
Know the pros and cons of the home
Because online searches take the emotion out of the home-selling process, we need to better understand homes so we can identify what will resonate with buyers. If two houses are the same size, with all of the major characteristics basically the same, certain things will transform each of them from average to extraordinary. Our value in the future depends on our ability to identify these characteristics and articulate their worth.
We need to stay on top of trends, know which search terms are trending, and play to the wants and needs of today’s home buyer. Here are a few selling points to consider:
- Sight Lines. A home’s function evolves as its owners evolve. Is the tree they planted years ago disrupting the gorgeous view? Is it easy to see the kids playing in the backyard? Freshening the landscaping is an easy fix.
- Would replacing the faucets and drawer pulls upgrade the look of the whole room? Can a half bath be converted into a full bath? In my experience, the upgrade cost more than pays for itself in the sale price.
- Simply painting cabinets white can make a big difference. Adding stainless steel appliances and a tile backsplash is an even better improvement.
- Is there an office or craft room that can be converted into a bedroom? Taking a three-bedroom home and converting it to a four-bedroom home will have an immediate impact on search results.
- You can’t underestimate the impact of fresh monochromatic paint throughout. It’s the simplest, least expensive upgrade there is.
- Take a critical look around, making note of both plusses and minuses. Your listing may be the only three-bedroom home in the neighborhood, but it also may be the only home on a single floor, a detail that could outweigh the number of bedrooms.
Jeff Sibbach leads the Sibbach Team, which is ranked in the top 1 percent of all REALTORS® in Maricopa County, based on home sales.