Who has real power in the real estate industry?
- Real power in the real estate industry has little to do with size or budget
- Individual agents have the majority of the power in the real estate industry
- Whoever supplies the agents with the best tools to capture leads wins their allegiance
Power in the real estate industry is not defined by company size or financial assets or by a massive advertising budget—power is a function of getting the marketplace to take a specific buying or selling action. All fruitful actions start and end with the individual agent in the real estate industry in 2016.
Only individual agents cause a buy or sell action to occur. All other players in the marketplace are simply intermediaries offering a range of tools assisting agents in their actions. Therefore, the more any particular intermediary assists the individual agent in accomplishing their tasks of servicing the needs of home buyers and sellers, the greater their own power is in the marketplace.
Of all support roles intermediaries can provide the greatest impact comes from creating seller and buyer leads for the agent. Everything else from CRM systems to team communication programs to electronic contracts to transaction management software are only of use once an agent has a lead. Lead creation is the primary task; everything else is a secondary task.
The entire industry is an inverted pyramid with the sole agent acting as the pointed foundation, carrying the weight of many layers of secondary services.
Therefore, the intermediary which provides the agent with the best tools to create and capture leads will always rank higher on the power scale than everyone else.
As the undisputed ruler of internet traffic ZG assists brokers in maximizing the advertising exposure of sellers’ homes they are marketing, and bringing potential buyer and seller leads to the brokers. ZG additionally has the rare ability to influence marketplace attitudes and actions directly.
Because ZG assists agents in their primary need of lead generation they are first in line after agents in power within the real estate industry.
How can an entity that does not officially exist in the marketplace yet rank so highly within the power structure of the industry? Simply because of the psychological influence the concept Upstream represents to the individual agents.
Upstream is selling a dream, triggering agents to envision a future of daily new leads from regaining control of the data. Upstream’s success or failure to do this massively impacts individual agents in their primary task of capturing leads.
If Upstream performs the dream as promised to the agents, anticipate it moving ahead of Zillow on the power scale. If the live application of the dream fails in the marketplace Upstream and its leadership will fall from grace landing near NAR’s position on the industry power scale.
Everything stated here is also true of the “Broker Public Portal” project. Selling a dream creates grand interest and lofty expectations; both the ascent and the fall are sharp and drastic.
With the moniker “Realtor.com” comes a perceived warmth and comradery from many agents. And by offering a means to advertise properties and capture leads slightly different from ZG, along with being the second largest portal behind ZG, Move Inc offers the second greatest source of leads. The dream of Upstream is the only thing standing in its way of being third in line on the industry power scale.
Certainly some brokerages provide tools directly creating leads for the individual agents. But this is obviously a sliding scale of its own. The brokerages creating actionable direct leads locally may actually rank higher than ZG, Upstream, or Move in the eyes of their agents. How many do this though?
Some MLS systems may offer portals which create leads, and some technology tools they provide may assist agents in doing the same. As with the brokerages this is a sliding scale and the MLS systems offering the greatest tools to help agents create leads will have the most loyal members in this turbulent landscape.
MLS systems are in a tight squeeze with Upstream potentially controlling the backend data and with ZG controlling the frontend presentation of the data, they will have to prove their purpose by providing lead generating tools or will slowly be relegated to a very low intermediary power status.
Each MLS system has essentially been in monopoly status within their local metro area for many decades. They now find competitors behind and in front of them. Do they have the skills and fortitude to fight?
The days of “broker as hero” commercials based on a particular brand name are gone. Only by providing specific tools creating leads can a franchise truly assist agents and garner their desire to be affiliated with that brand. As with brokerages and MLS systems this is a sliding scale.
Currently some franchises offer various tech related tools, but with little application of them in the marketplace by the individual agents. The agents will enthusiastically apply them if and when they see them as a tool to effectively create leads. If the tools supplied succeed at creating leads the agents will readily adopt them, otherwise they will be ignored.
While NAR promotes the real estate industry at a “macro-level”, there are few tools brokers use from this source to directly create leads, what the individual agents most need. Most of NAR’s technology is represented in RPR, which has limited agent adoption as a backend tool and provides little frontend lead creation tools.
Individual agents are the entire power base of the real estate industry. But individually they do not have the finances and fortitude to create the kinds of innovative tools needed to capture new sources of leads on the internet. Therefore whichever intermediary provides the greatest technologies to create these leads will always be in close relation to the agents on the industry power scale. Everybody else will wither.