Amazon is Definitely Maybe Launching a Service to Connect Agents and Home Buyers and Sellers
The real estate industry erupted once again this month when Amazon launched a page during Prime Day called “Hire a REALTOR®.” This page lived under their home services page, and many REALTORS® took it as a sign that Amazon has real estate in its sights in their seemingly never ending quest to take over the business world.
But, then the page disappeared within hours without explanation! While it was up it had no real estate agents or any other content listed on it, leaving many confused.
So, how do we as an industry make sense of this and what does it all mean for real estate?
To me, Amazon’s possible action means that trying to connect home buyers and sellers with agents that the consumer believes they can trust will be a big focus of real estate marketing technology over the next three to five years. Thanks to technology removing nearly every obstacle to accessing listings online, picking a REALTOR® is about trust and fit for consumers more than ever before. It is about consumers trusting that an agent knows how to price and sell a house, and that they are a trustworthy partner that can help sellers and buyers navigate their way through the process.
There has been lots of words written about the news itself and I wanted to share with you two of the more interesting pieces I have read on the topic.
Housing Wire’s reporting of what actually happened:
Amazon quietly reveals possible expansion into real estate services
Real Trend’s Steve Murray on what it means:
Possible Impacts of Amazon Moving Into the Real Estate Industry
So, What Does it Mean For You?
Some of you are probably thinking, why would Amazon get into home services? It might surprise some to learn that Amazon does a whole lot more than upend the retail industry. They are involved in all sorts of offerings from web services and data hosting – about 42% of cloud based apps use Amazon Web Service, or AWS – to an entire home services division where they connect you with people who install smart home technology, put up drywall, install roofs or do a variety of other odd jobs and tasks. In the interest of full disclosure, I had never taken a deep look around their home services page before their Prime Day surprise, but in researching it, I was impressed with the scope of professional and business offered on it.
If any of you were fortunate enough (I say that jokingly) to be part of a presentation I gave during the Fall Member Update in October 2015, you’ll remember I discussed the comparison of real estate agents to Amazon. Amazon has grown as intermediary that connects sellers of good and buyers of goods. They’ve obviously evolved as a company since, but their founding premise to help people who own books (book manufacturers and some retailers) connect with those who want to buy books (book buyers). If you remember, Amazon was the place to go to find used books or old editions that had long since gone out of print. In reality, it’s the same concept that real estate agents practice every day.
You as a real estate agent or broker connect those who want to sell homes (home sellers) with those who want to buy homes (home buyers). While this is a drastic oversimplification that doesn’t even touch on the expertise, knowledge and value an agent brings to a real estate transaction, it is the basic core of what we do as an industry. However, in today’s crowded world with attention spans decreasing and advertisements everywhere you look, it’s becoming incredibly hard to find people you trust and are knowledgeable to do a job (just think how hard it is to get a contractor on Cape Cod to call you back).
We know that untrained, unethical and incompetent real estate agents are the largest complaint from your fellow agents nationwide.f you think that, the public definitely sees it. So, how does a customer find someone they trust? First, they seek out things they trust – an opinion from a friend, a media outlet they trust, or some other form of ‘vetting’ to find someone they trust. At this point Amazon is a trusted brand; in fact, Amazon finished #2 in Forbes’ 2017 ranking of the most reputable companies in America. Taking this into account, it would seem logical that people would go to Amazon to find a trusted real estate agent, and that Amazon would want to get into the $29.6 trillion US real estate market.
What This Means For the Future
Amazon’s potential move solidifies our thinking that connecting agents to buyers and sellers is the next wave of revolution in the real estate market. Whether it’s something simple like rankings, ratings, reviews or something more sophisticated like using predictive analytics to market to potential buyers and sellers, forging these connections has been where tech companies think they can change the industry.
CCIAOR outlined the shift in the consumer’s mindset over the last 10 to 15 years in a column written by then CCIAOR President Laura Usher last year when discussing NAR”s #GetRealtor advertising campaign.
There has been a lot of effort to get between a consumer and a real estate listing to give them that lead. Right now, Zillow and Trulia own that space. Where there hasn’t been a lot of effort – but where I believe Amazon and the whole industry is heading – is that there will be a wave of technology developed to get in between the consumer and the real estate agent in hopes to sell the lead to the agent and provide a trusted referral to the consumer.
Look at The Zillow Group’s Consumer Housing Trends Report and what sellers value when selecting their agent – it’s all about trust and competency – but as defined by the consumer, not by you or the industry.
So, What’s a REALTOR® To Do?
- The REALTOR® brand needs to take back its position as the trusted source for referrals by making sure only REALTORS® are being recommended. REALTOR® means ‘member of the National Association of Realtors®,’ not a real estate agent. The terms are not synonymous.
- We need to make sure REALTOR® means something. Think about your last problem transaction where you thought the agent on the other side acted unethically or was not knowledgeable about the transaction process. Were they a REALTOR®? Probably so – that means we need to either raise the standard to enter or enforce the standard better – or both.
- Real estate agents and brokers need to do a better job at marketing and telling their story. Tell the consumer why they can trust you, why they should trust you and what you bring to the transaction that no one else does. Consumers do not hire you because you can tell them what’s on the market or your website displays all the latest properties for sale – they hire you because you can be trusted. The Association raising and enforcing the standard can only do so much – it’s going to take everyone to raise their game and commit to the industry now and in the future.
The CEO’s Take is a monthly column examining trending real estate discussions more in-depth by CCIAOR’s CEO Ryan Castle.