Every transaction has a buyer and a seller. The sale could be a new home, a tube of toothpaste, a smartphone, a digital movie rental, or your next take-out meal. No matter how big or small the transaction is, who is ultimately in the driver’s seat?
It’s the buyer. Every time.
Think about it – in any potential transaction, the buyer brings their money to the table and can also walk away, leaving the status quo unchanged. The seller still holds the goods they want to sell, unless they attract the attention of a buyer and agree on a price. Sure, sellers have bargaining power and supply, but buyers drive demand, and without demand and transactions you have no sales, no market. It happened after the last real estate bubble – many buyers couldn’t get loans, which quickly dried up demand, and the whole market seized up.
Buyers also have the power to shop around. They choose what to buy, when to buy, and how to buy it. Their reasons can be all over the map – price, convenience, service, quality, speed, reputation, and their mood today – anything!
Sellers are competing for buyers’ dollars against anything else they could possibly want, not just similar products.
For example, if my home is up for sale, a buyer may be comparing it in their mind to other similar homes in the area, but also to renting a home, moving to other parts of the country, or staying put and instead spending money on that home theater system they’ve always wanted. I’ll never know. That power to spend their money any way they want is what puts them in the ultimate driver’s seat.
Buyers always want more. There is no finish line.
When you go out for dinner, how do you decide where to go?
You might want to go to a fancy restaurant with high-quality food and exceptional service. It’ll be expensive, but it’s your birthday and you want something special. Or, you might want a fast food burger because it’s inexpensive and convenient and you’re pressed for time. Or, you might go to your favorite local family restaurant, because it’s reliable and everyone can get something they’re happy with.
There is no one-size-fits-all. You’re making tradeoffs.
But tell me this – if an identical restaurant opened next door with prices 30% lower, would you complain, or be more likely to go there instead? If they gave you better service, or prepared your food faster, or were in a more convenient location, you would benefit and you would be more likely to patronize them. Focus on giving buyers more of what they actually want than your competition and you’ll win them over. If you don’t, then someone else eventually might and you may be left behind.
Technology keeps accelerating our buying options, and buyers always vote with their wallet for change they like.
Was Blockbuster Video good enough? Netflix didn’t think so and buyers agreed.
Nokia had a huge share of the mobile phone market, then Apple and Google came along and marginalized them with better features.
Plasma TVs were all the rage 15 years ago, but they’re no longer manufactured – LED TVs are lighter, cheaper, and more energy efficient.
In the past, did you carry a paper map in your car to navigate when traveling? I bet you don’t anymore and you use Google or Apple maps on your phone instead.
Have you ever ordered something online for home delivery instead of calling around to stores and driving out of the way?
Millions of people prefer to take Uber or Lyft rides because they’re cheaper and more convenient than taxis.
You get the point, and real estate is not immune to these forces.
Real estate buyers want more and they’re starting to get it through technology and innovation
Having a product that “works” is not a guarantee that people won’t switch to a better alternative that better fits their personal needs. The options for real estate buyers are getting broader.
A buyer who also needs to sell their current home may be willing to pay MORE for reducing their overall hassle and risk. Knock is targeting these buyers with a convenient home “trade-in” alternative to the typical real estate transaction, similar to trading in an old car when buying a new one. They’re growing fast. The car market shows that people will pay for this kind of convenience – about half of all new car purchases involve a trade-in, despite it costing them about $2250 on average compared to selling it on their own.
A cost-conscious, knowledgeable buyer may value a discount brokerage, a great negotiator, or an FSBO. Many companies are aggressively pursuing the cost angle with flat fees or discounted commissions and using software instead of humans to keep the cost down.
An introverted buyer may hate sales pressure from agents and values the ability to look and research on their own, and close the deal with low touch. Online search tools like Realtor.com, Zillow, and Redfin help them browse and research at their own pace.
A tech-savvy buyer may strongly prefer an agent who is responsive over text, IM, Snapchat, etc. In-person meetings and phone calls are negative services to them.
An anxious buyer may value transparency, reassurance, and real-time information. Mobile apps, websites, emails, and text messages can help keep them informed. When smart systems use these communication channels automatically, the manual overhead of catering to anxious buyers is greatly reduced.
A buyer in a hurry wants to close quickly and move in or make the winning offer in a competitive market. Flyhomes targets these buyers by making all-cash offers and short 7-day closes, backing it up with data science and a dedicated negotiating team.
A buyer may NOT be in a hurry and use that to wait for the perfect house or negotiate a great deal. Many real estate sites provide “recommendations” based on your preferences and search history, and offer alerts when something interesting hits the market.
Is technology threatening your business?
Technology changes can work to your advantage, and create many new opportunities. Don’t ignore them – harness them. These technology trends are transforming the mechanics of real estate, and how we all do business:
Mobility – With powerful smartphones in our pockets, communication can happen anywhere at any time. Effective use of texting, instant messaging like Facebook Messenger, mobile apps, and websites that actually work and look good on a phone are becoming table stakes, and what buyers expect.
Cloud technology – Cloud services from AWS, Microsoft, Google, and others are transforming traditional IT departments everywhere. Companies who build new IT on top the latest cloud services can see an 80-99% cost savings compared to the on-site IT of 10 years ago. It also allows companies to build web-based products and services that they can sell nationwide, easily plug-in with other cloud software, and lets startups build a commercial product quickly. Cloud technology is creating huge cost savings as well as accelerating innovation.
Process efficiency – “To err is human…” but nobody wants errors in their real estate deal. That’s why companies like Dotloop, SkySlope, and Brokermint have built powerful systems to help agents define their own best process, and then stick to it. They also facilitate the exchange of documents and data. Technology is great at process efficiency – when done right it can eliminate busy work, detect errors, and remind people when action is needed. Most top brokers today rely on process control systems to give them a competitive edge, avoiding delays and mistakes.
Electronic data, less paper – Historical and county records are getting digitized. Electronic signatures are becoming recognized and more heavily used because of their obvious convenience. Digital and remote notarization is being allowed in more and more states. Important documents are passed around in digital form over email rather than being physically mailed. It’s happening because moving digital data around is faster and more convenient. We’re getting closer to digital end-to-end for the whole transaction, so position yourself for it!
So, what do my real estate buyers want? How can I deliver better value?
Here are a few areas that every buyer cares about, and you can focus on improving no matter what your role in real estate is.
Speed – “I love to be kept waiting!” said no one ever. Responsive proactive communication, streamlined workflows, and process automation can all help.
Service – Everyone aspires to give “great service”, but think deeply about what that means to YOUR buyers. “Good service” means service tailored to THEIR desires, and increasingly means using modern and mobile technology that is simple to use.
Quality – Everyone wants a high-quality experience, with great agents, no hassles, and a smooth closing. Buyers size you up through referrals and reputation, increasingly online and through social media. A vocal irate customer online can really hurt your business, which is why it’s so important to give a consistently great experience every single time. Use technology and reliable service providers to build consistent quality into every customer interaction. Good intentions aren’t enough.
Convenience – Some buyers highly value convenience, and if you can make their lives easier or simpler they will gladly pay for it. What burdens can you lift that others can’t?
JetClosing can help
At JetClosing, we built our entire business from scratch with these customer values in mind. We pride ourselves on getting transactions from “clear to close” faster than anyone and communicating proactively with all parties both digitally and in-person. Our mobile and web apps give real-time views into status, data, files, contacts, and support. Digital signing and recording let us disperse funds immediately, within an hour of closing. We know the closing is only a part of your overall transaction, but we can help it stand out and finish your deal on a high note.
In the increasingly competitive real estate market, every advantage helps.