BLOG VIEW: There is some debate as to whether we are experiencing a real housing recovery or an artificially created one that is just setting us up for another downturn. But no one will debate the need for organizations in the housing space – whether on the real estate side or the lending side – to have the most up-to-date technology available in order to maximize efficiency and profitability.
Technology has determined the outcome of practically every battle, every civilization and, more to the point, every business since the beginning of time. When those with superior technology go up against those with inferior technology, the outcome is predictable: Those with inferior technology almost always lose.
This is becoming more apparent in the real estate industry: Those companies with the best technology are typically the most successful.
Everyone in the real estate industry knows they need technology, but many delay investing in it simply because they are not sure what is available or what they really need. There are hundreds of different tools and software programs being marketed to real estate agents. But, what do you really need?
Real estate agents, in particular, need the most up-to-date, feature-rich platforms. Many of the software systems used by agents have been around for years. Though most of these systems were adequate when they first came out, many have now been surpassed by advanced Web-based platforms that reflect today's more complex and competitive market.
If you own or manage a real estate firm, be sure to look for newer Web-based systems and products. They will often be faster, easier to use and more beneficial than legacy systems. If you have not upgraded in the last two years, chances are that you're already behind the competition.
What follows is a list of features that real estate agents need (from an agent's perspective) in order to be successful in today's market:
- Lead generation: A system that brings buyers and sellers directly to the agent instead of the agent prospecting and cold calling;
- Lead management: An agent needs to be able to identify, track and manage and/or assign the lead;
- Lead incubation (follow-up): This is imperative for Internet and social media leads. An agent needs a system to follow up and stay in touch with the buyer or seller;
- Marketing: Although it's sometimes part of lead generation, marketing is a separate and distinct area. Marketing is about promoting the agent, its listings and its company with the result being an increase in public awareness. This includes an extensive library of flyers, letters and other promotional materials;
- Transaction management: This can be one of the defining aspects of a successful office or agent. An agent needs an efficient and compliant system to effectively manage your transactions, with timelines and notifications;
- Document management: Having the plethora of documents available and tracked at all times is imperative to an efficient and compliant office;
- Document storage (paperless): An easily accessible online document storage system is a must;
- Digital signatures (e-signing): This is the future – the ability for an agent and their clients to sign, execute and deliver documents electronically is a must;
- Integrated email: Email is literally part of the transaction and must be maintained with the file. Having every email integrated into the agent's system and attached to each transaction file is a very important feature;
- Accounting: Commissions, expenses, fees, etc., should be automatically tracked at both the agent and office level. Maintaining separate accounting systems and software is both costly and extremely time-consuming;
- Calendar and scheduling: Keeping track of appointments on each of the agent's transactions;
- Dynamic website: Integrated with an agent's marketing and lead generation systems. All agents and companies should have a unique website;
- Online offer submission and management: Having an online system where all offers from buyers and/or selling agents are received, tracked, logged and managed saves hours of time on each transaction as well as dramatically reducing liability and potential lawsuits; and
- Truly mobile: Real estate is a mobile business. Agents spend most of their time out in the field and/or working from their homes, and it is very important that whichever system that is selected be completely and truly mobile with all features fully accessible via smartphone or other mobile devices, such as tablets and iPads.
These are the basic tools that every agent must now have to be successful in today's environment. But, if you own or manage an office or team, there are additional tools that you must have. What follows are some of the additional tools required for brokers and/or managers:
- Reporting and management functions: Managing a real estate-related operation can be very time-consuming without the right tools and information readily available to you. A good system should include full real-time reporting functions. This includes individual agents and overall office production, cashflow projections, lead generation and conversion rates, expenses, etc.
- Accounting: A complete accounting system that manages all aspects of your business including commissions, 1099's, office expense, bonuses, etc., is a must in order to run a successful brokerage today. More importantly, it should directly integrate into the transaction management system so that commission calculation and paying your agents can be automatically managed and processed for you.
- Compliance: The ability to easily see what is going on with every transaction in your office at any time is the key to preventing problems before they occur. An effective compliance and management system will only work when integrated with the actual transaction management system that the agents themselves are using.
- Recruiting system: Given that recruiting is truly the lifeblood of any successful real estate office, an automated recruiting system is also a must. A good recruiting system should bring new agents into your office for you and will include advertising, marketing, email, drip campaigns, automated follow-up, etc. The better systems are fully automated and require very little of the broker's or manager's time.
Importantly, the tools required will only be effective and beneficial when integrated as part of a single platform that all of your agents are using. Otherwise, the headaches of double and triple entry when using separate systems will quickly negate any of the benefits that you hope to receive.
A Word About The Cost
A lot of the time, a company will see no tangible correlation between price and true value and/or the actual quality of a technology product. Don't assume that because a particular product is more expensive than another that it is somehow better. In fact, the opposite is usually true: The older and more ‘proven’ software and technology products are, they are often more expensive to support, host and maintain. Therefore, they tend to have higher costs over the lifetime of the product. In other words, the less expensive systems tend to be the newer and better ones at the same time.
Realistically, a complete all-in-one system with all of the features listed above can be purchased for about $10 per month per agent. You just have to shop around and compare systems.
Most importantly, many technology products currently offered for the real estate industry only do only a handful of the things mentioned above. At the same time, not every agent and broker needs every feature and capability to be successful. Previously, in order to get all of the different features and tools that an agent needs to be successful, a company would have to purchase and subscribe to at least 10 different software products. This is impractical, as it requires a manager to install and set up 10 different software programs, learn how to use them, then train agents and staff to use them, then manage and maintain them.
Making this ‘patchwork quilt’ approach to technology even more problematic is that all the different systems can't talk to each other – or exchange data smoothly – due integration problems, which are still common.
Other major points to keep in mind are as follows: One system is more affordable than 10 different systems; one system is easier to learn than 10 different systems; and one system makes it easier for everyone to use it to its fullest potential.
Every feature and functionality listed above is now necessary for an agent's success in real estate. Agents really do need them all – and by having them all on one platform, you can create synergies that will grow your business even faster.
Lynn Effinger is a veteran of more than three decades in the housing and mortgage servicing industries. He currently serves as senior vice president of institutional services for RIO Software Solutions Inc., developer of RIO Office.