In this month’s National Association of REALTORS® Power Broker Roundtable, industry leaders discuss how new business models are shifting the real estate landscape.
Cindy Ariosa, Senior Vice President, Regional Manager, Long & Foster Real Estate, Chantilly, Virginia; Liaison for Large Firms and Industry Relations, National Association of REALTORS®
J. Lennox Scott, Chairman and CEO, John L. Scott Real Estate, Seattle, Washington
Rei Mesa, President/CEO, Berkshire Hathaway HomeServices Florida Realty, Sunrise, Florida
Shad Bogany, Broker, Better Homes and Garden Real Estate Gary Greene, Houston, Texas
Greg Zadel, Founder/Managing Broker, Zadel Realty, Firestone, Colorado
Cindy Ariosa: Real estate is an industry that lends itself to change. We have only to look at the year just past, and the adjustments we’ve made to safely manage business in the midst of a global pandemic, to see the truth of that. At the same time, we have a long history of orderly, ethical behavior—a Code of Ethics set down by the National Association of REALTORS® (NAR) more than 100 years ago and emulated by Multiple Listing Services (MLSs) nationwide, that sets the standards of conduct and rules of cooperation by which REALTORS® everywhere must operate. But the past decade has ushered a wave of new entries into the field—discount agencies, third-party portals, new business models using artificial intelligence to shortcut traditional home-buying. How closely will these new players adhere to these ethical standards—and how do we maintain our prominence in competition with those who may or may not?
J. Lennox Scott: We all have the same tools available to us—the same technologies, the same database management tools, the same approaches to business. The difference is that traditional real estate is focused on relationships. While new players have flipped the 80/20 rule on its head, spending most of their time on implementing new technologies, we stay engaged with our customers—and in this business, in my experience, relationship trumps all.
Rei Mesa: In Florida, we’ve seen every new business model there is, but however you feel about these new players, it’s important to know your competitors—to understand their culture, the way they operate, and then just do it better. You can’t be everything to everyone, but our Code of Ethics has tremendous value. It’s what protects our customers and leveraging that—adhering to and consistently promoting our value to consumers—is the reason they trust us and will continue to trust us while lesser service models fizzle.
Shad Bogany: Some of these new models can actually make us better because we can embrace new technologies and the ingenuity of new players to raise our own game. I was using videos and VHS tapes back in the ’80s to sell properties to customers out of state. We’ve always used technology as part of our business plan, and we have no fear of learning new methods. But I agree that real estate will always be a personal business and, taking care of our customers—being advocates for consumers—is, and always will be, No.1.
Greg Zadel: The truth is, there have been new players for decades—and there is always a segment of buyers and sellers looking to do business based on price alone. The job of a full-service real estate agent—a dedicated and experienced professional—is to help customers find out what they don’t know…and typically, there is a lot they don’t know, and that technology will never give them. That’s why educating the public is vital: Is your agent a REALTOR®?
CA: Yes, what you’re asking there is, “Is your agent playing by the rules—behaving fairly, ethically and on your behalf? Especially when it comes to fairness, including MLS rules, and licensing rules and fair housing practices.”
SB: That’s right. We don’t need new rules when it comes to fairness. They are written into the framework of our Code of Ethics. We need enforcement to be sure that consumers stay protected—and continuing marketing and education so that they understand the value we bring to every transaction.
LS: That, plus our focus on building relationships. That’s how you compete, how you retain prominence—with the day in, day out customer service, the clear advantage of staying engaged, the advantage of our relationship database.
RM: Everything about real estate is cyclical. Right now, it’s a good time to sell. When that turns around, as it inevitably will, the advantage of promotion, of effective marketing, will once again become crucial. As traditional real estate agent, we will be around, and prominent, long after some of the iBuyer and other business models are scrambling to retain their relevance.
GZ: Traditional agents will do the right thing in any case, advocating on behalf of the consumer, building and nurturing relationships. In the long run, tradition wins out, first because of our commitment to ethical behavior, and second, because no computer can ever compete when it comes to customer hand-holding.
CA: Good points, and there’s nothing onerous about a little friendly competition. Will these cool new kids on the block be good soldiers? Will they play by the rules we know and love? We hope so, because we see the value of an orderly, ethical marketplace, and NAR will continue the campaign to remind consumers of that value. We are resilient, respectful and, most important, we will do the right thing. We are well up to the challenge of maintaining the trust we have earned over the decades.
For more information, please visit www.nar.realtor.