Superhero Agents
Issue 72 - February 18th, 2022
The role of the agent is rapidly changing, but the importance of the agent having a seat at the table is only getting stronger and stronger. Agents were still involved in over 87% of transactions in 2021. As I have written about in a previous post, the agent role has evolved from an “information gatekeeper” role to a Superhero “information hub” in today’s real estate world.
The Superhero agents of today possess the following traits:
They are master networkers and experts on the areas where they sell homes
They understand all of the trends in the industry and are able to explain new concepts and changes in the industry concisely and professionally to their customers
They continue to learn about new technologies and emerging trends in the industry
They always think in terms of what is best for the customer
They welcome innovation, particularly advances in technology, and understand it is a natural path for the future
They are well versed in all parts of the transaction from helping clients getting pre-approved for mortgages on the front end to helping suggest things like lawn care companies post closing
The real estate industry is becoming increasingly competitive and home sellers and buyers have more and more options when it comes to purchasing or selling a home: iBuyers are changing the landscape rapidly, innovative brokerage models continue to pop up, and low-fee FSBO options continue to compete with real agents for clients.
The agents will continue to win by being much more than just someone who helps in the transaction process (although this is pretty important too!). In addition to their main task of finding or selling a home, the agent also needs to assist and guide their client through process helping with everything imaginable along the way from suggesting lenders, title companies, inspectors, home insurance providers, movers, home upgrades, etc.
I believe the role of the agent is getting more valuable as more technology hits the industry and consumers have multiple options to acquire or dispose of a home. Consumers need guidance to navigate the home buying and selling process and the local Superhero “information hub” agent is more relevant than ever in these conversations. Pure technology firms completely overlook the “hyperlocal on the ground knowledge that agents possess”, and I think it will be hard for people to displace agents entirely like so many have tried and failed to do over the last decade.
The part of the industry that needs to be “disrupted” is the relationship between the brokerage firm and the agent.
So many entrepreneurs and companies have tried (and failed) to get rid of agents completely and time and time again these companies end up in the startup graveyard
Everyone assumes real estate transactions will go the way of travel agents or stock brokers, but the home purchase is a much more complex and rare transaction than these other events in a person’s life
The legacy brokerages today and even new models like Compass and others are still at their core entirely old school models with heavy office space footprints, outdated commission split business models, and a “lipstick on a pig” business model mentality. No one has rebuilt the brokerage model from the ground up.
The problem and opportunity lies in disrupting and rebuilding a brokerage focused on serving agents and not one focused on preserving legacy business models with some add-on tech or other services.
At Pinnacle Realty Advisors, we believe the way to build the best brokerage platform in the world is to build a company with an “agent is the customer” mentality.
Everything we do and every decision we make at our firm is made in that framework, and we believe that if we provide the best experience possible for our agents then the consumers (their customers) will benefit as a chain reaction in this entire ecosystem.
The firms of the future that can provide industry leading financial structures for agents combined with impeccable tools, training, support, and community will become the largest and most successful brokerages in this industry over the next decade.
Learn more about what we are doing by visiting our website. Enjoy your weekend!
“a new chapter”
Check out my most widely read Substack post yet: we made a HUGE announcement a few weeks ago announcing our rebrand from Archetape to Pinnacle Realty Advisors. We are PUMPED for the year ahead!
Newsworthy Links To Share
SUPPLY CHAIN Issues Persist: “It used to take us 20 weeks to build a house,” said Adrian Foley, the president and C.E.O. of the Brookfield Properties development group, which develops thousands of single-family homes annually in North America. “And now it takes us 20 weeks to get a set of garage doors.” (NYT)
That Vacation Home Listed on Airbnb Might Be Owned by Wall Street: New York-based investment firm Saluda Grade is launching a venture with short-term-rental operator AvantStay Inc. to buy about $500 million of homes, the companies said Tuesday. Saluda Grade said it is also looking to raise debt by selling mortgage bonds backed by its homes to investors, the first vacation-rental mortgage securitization, according to the company. (WSJ)
Renting a Home Is Even Harder Than Buying One in Unrelentingly Hot U.S. Market: For Atlanta real estate agent Jamie Douglas, a dearth of inventory has made it almost impossible to take on new clients hunting for affordable rental homes. Now, she works with people who have at least $5,000 a month to spend on rent, double her usual base of around $2,500 because there’s just nothing available at lower price points. One house will get 15 to 20 applications and be rented within a day, she said. (Bloomberg)
Disney Launches Push Into Master-Planned Communities: Walt Disney Co. is making another push into the residential real estate business, launching the first of what it aims to be master-planned communities across the United States that bring some of the marketing elements of its theme parks, cruise ships and entertainment productions to housing developments. (Costar)
Inside Redfin’s unique, brave and vulnerable business model: The brokerage has declared a covenant with its real estate agents, making them employees. Can this model last? (Housing Wire)
According to AirDNA analysis of VRBO and Airbnb rentals, short-term rentals were very profitable last year. Occupancy of short-term properties at any given time rose 5% YoY to 62%, while increased demand allowed landlords to raise prices, topping even pre-pandemic earnings. (NYT)