Up to the late 1990s, real estate brokerages conducted business with the same tools and business models that had been in place for decades. With the development of the Internet, along came new challenges for real estate brokers that are altering the landscape. One such example is that online brokerages are forcing conventional real estate entities to share their most useful tool called the Multiple Listings System, also known as MLS.
How is it all shaping up? Here are some of the developments that have taken place within last few years that represent new challenges to their revenue growth.
- Web-based realtors: Real estate companies operating solely on the Web have become a challenge to traditional realtors. Companies like Zillow and Trulia are offering prospects not only the aerial views of the properties but the virtual tours of the interiors and exteriors of the properties where a potential buyer can see their future home inside out, while sitting in their own living room. With so much information now available on the Internet, many internet-savvy sellers are listing their own properties to connect directly with the buyers, hoping to save the commission. At present this does not represent much of a threat, it does signal technology is bringing change to the industry.
- Legal challenge: If that was not enough, in Sept. 2005 the U.S. Department of Justice filed an antitrust lawsuit against the National Association of Realtors (NAR) for trying to suppress competition by not sharing MLS data with the web-based realtors. (Source: www.justice.gov) NAR reached an agreement with DOJ in Nov. 2008, without admission of wrong doing, agreeing to prohibit its entities from restricting the access of Internet brokerages to the MLS. That essentially removed a lot of business power from the real estate brokers who operated using the conventional methods of selling real estate. Now the real estate agents know that they are dealing with two new realities; competition from Internet real estate companies and very well-informed prospects.
- Real estate brokers are not IT specialists: These real estate brokers and agents are not strangers to the technology. They have used this technology for years to list properties, to keep MLS updated and keep their prospects informed at a moment's notice. but it is managing that IT which is a challenge for them. Using technology is one thing but managing it is something else entirely. With so much information that should be safeguarded, updated and accessed from anywhere and anytime on different devices, this is something that has to be managed by professionals. It is absolutely vital that if the real estate brokerages are going to be competitive, their network infrastructures should be monitored and maintained 24/7. If your prospects cannot access your downed website at 11:00 PM they have hundreds of other websites to choose from.
- You need a MSP for business continuity: You are well aware of the importance of continuity for your business. Any breakdown in your IT systems can stop your business in its tracks for all your prospects and agents. Managed Service Providers are the answer to all your challenges that arise from managing technology. MSPs keep their hardware and software applications updated to face the growing threats to the security of your data and systems. That allows you to focus on your core business; selling real estate. That is significant for your revenue growth.
- Using in-house IT management: Some realtors tend to use in-house IT management. Their need is based on the premise of a system failure. It is known as a break-fix approach. The problem with in-house management is that it is not a long term solution. The difference between in-house management and outsourced management is that the latter (MSP) is not waiting for the disaster to strike. It deploys proactive solutions.
Summary: To summarize our discussion we now know that your business is not what it used to be. Realtors had total control over their business-destiny, and want to retain some if not all of that control. Their agents want to be more than a clerk who just prepares the documents for a client. They want to be part of the bigger picture. So the technology that posed a challenge to their profession is also available to beat the same challenge. But how you manage it is critical to your success.