Presentation given by Jeremy Conaway at the ORRA Strategic Planning Session (October 30, 2012).

1. Orlando Regional REALTOR® Association
Current Trends That Are Impacting
the Market and Transaction
Strategic Planning Meeting
Tuesday, October 30, 2012
Dubsdread Country Club

2. The most significant force impacting
today’s American real estate
marketplace is arising from the fact
that despite the fact that the
“market” has returned a number of
other factors have come into play
creating a new market environment.

3. How are these forces playing out?

4. The North American real estate
industry is at a turning point. The
level of tension and anxiety is high.
Things that can’t happen in the
marketplace yet are happening in the
association environment.

5. Quebec

6. CREA Today

7. Toronto

8. Las Vegas

9. Chicago

10. The Pinnacle Group Project

11. An unprecedented level of AE
terminations with clerical
replacements

13. The Why of Today

14. The American real estate marketplace,
industry and transaction is currently being
impacted by a number of demographic,
generational, economic, technology and
informational forces.

15. While there is adequate evidence to
document the current impact of these forces
no consensus has emerged with respect to
when they will generate sufficient
momentum to force a fundamental change
in the traditional industry.

16. As the monitoring of these forces continues
and the intensity of the conversation
increases it is essential to keep in mind that
it takes 24 - 36 months to introduce and
implement meaningful institutional change

17. The Brokerage Conundrum

18. What Do We Know Today
• The consumer is in command
• The average broker is 63 years old
• Agents are not transitioning into the new reality
• Third party Internet firms are gaining ground
• The consumer is being attracted by 3P
• Brokerage profits from commissions are minimal
• Brokerage values are lowest in years
• There are no buyers for traditional brokerages
• There is no plan in place, the Boomer brokers are
in denial

19. The success of your brokerage
community moving forward is of
major concern

20. The elephant in the room

21. What’s happening out there …
The current market environment is marked by a
growing level of disconnect between the
traditional agent and the contemporary
consumer. Increasingly when Labarie and
Connie get together the sparks fly and we don’t
mean romantic sparks. This situation can not
be allowed to continue.

22. Who is the best agent
around here …
Example #1:
Consumers want to know who the best
agents are in terms of production and
neighborhoods. Way too many traditional
brokerages are refusing to be transparent

24. “I want more information …”
Example #2
The contemporary consumer has an
insatiable appetite for very specific
inventory related data. By and large agents
are refusing to provide it

25. What exactly do they want …

26. What about lifestyle
information …
Example #3
Today’s consumer wants to talk about
lifestyles and quality of life issues. The vast
majority of agents are only prepared to
discuss bedrooms, baths and prices. This is
contributing to the growing gap between the
contemporary consumer, especially within
generation “Y,” and brokerages.

27. What does lifestyle mean …
• What about the schools
• Where is the nearest decent golf course
• Do airplanes fly over here
• Where can I find organic vegetables
• Where is the nearest synagogue
• Who lives in this neighborhood
• Is this neighborhood “walkable”
• Are there babysitters around here

28. Example #4
Today’s consumer (especially the 40% that
will be forced by circumstances to live in a
rental for the next few years) wants to talk
about issues and options that compare
ownership and rental options. Too many
agents see this discussion as a threat to
home ownership and refuse to engage.

29. Where are they getting it …

30. They want TM …
Example #5
Many contemporary consumers want to enjoy
the benefits of transaction management so that
they can track their transaction. Very few
brokerages in each market offer this service.

31. What’s the big deal with TM …
During this presentation we will make the
case that Transaction Management is the
single most important process in real estate
today. It is and it will be the gateway to the
new brokerage business model

32. KWI does TM …

33. 92% want TM …

34. I need to know now …
Example #6
More and more consumers are asking that
communications with their agent occur using
smart phones, i-Pads and other mobile
devices with messages being delivered now.
Too many agents are responding that they
will call after their regular day is over.

35. Is there a problem …
What’s the problem here?

36. Could it be generational …
Some experts suggest that what is
happening here is that boomer agents
believe that they can control the
marketplace by not accommodating the
unique and well identified expectations and
demands of Generation “Y”

37. Wow! Big difference …

38. Could it be …
Other’s suggest that there a sense within the
brokerage community that its future rests
with the aging agent population rather than
the contemporary consumer?

39. Orrie the REALTOR®
How is Labarie doing …
• He wants to be the center of the transaction
• He wants to sell not connect
• He thinks lifestyle is for girls
• He doesn’t want TM to let Connie know he
screwed up
• He hates the idea of agent rating
• He doesn’t believe Connie needs to know
everything.
• He doesn’t believe that real agents do rentals
• Communication is not his priority
• What in the heck is a consumer experience?

40. Connie the consumer …
What happened to Connie …
Not to worry about Connie, she found what
she was looking for

42. Whose on line …
The Rapidly Transitioning Real Estate Internet
Space: Brokerage Ally , Business Distractor or
Skillful Competitor?

43. Let’s start by examining how the new breed
of Internet based real estate companies are
doing with the consumer demands and
expectations discussed above.

44. I want to know which agents
are good …
On the subject of agent rating

45. Trulia does agent rating …

46. Yelp does agent rating …

47. Zip Realty does agent rating …

48. Redfin does agent rating …

49. Zillow does agent rating …

50. What about transaction management?

51. What’s the big deal with TM …
During this presentation we will make the
case that Transaction Management is the
single most important process in real estate
today. It is and it will be the gateway to the
new brokerage business model

52. Redfin does TM …

53. KWI does TM …

54. What about advanced inventory information?

55. Remember what they want …

56. NuHabitat has it …

57. NuHabitat has it …

58. Zillow has it …

59. Sawbuck has HomeSnap …

60. Where to get rental info …
On the subject of rental vs. ownership lifestyles

61. Information on the decision …

62. The Zillow breakeven …

63. The Zillow rental app …

64. Trulia Market Watch

65. Where can I live my life …
Lifestyle information

66. Zillow can help …

67. Street Advisor knows
the good stuff …

68. Where can we walk …

69. What about Zillow …
Lets take a closer look at Zillow

70. They got listings …

71. They got rentals …

72. All the rentals …

73. They have agent reviews …

74. They have lots of
consumer information …

75. Zillow television ads …

76. They are recruiting agents …

77. They are providing valuable
agent benefits …

78. Lets try it again, Zillow is
recruiting …
Zillow has recruited 26,800
REALTORS®

79. So what is the big deal …
Do you know what Zillow is doing with your agents?
• They are taking a big piece of the commission
• They are directing your agents to their consumers
• They are setting standards for your agents
• They are establishing a national system of
transaction coaches who will work with your
agents every week
• They are telling your customers that they are
better

80. Most ridiculous of all, your agents who
refuse to cooperate with your efforts to
create systems and consumer experiences
are now blindly following Zillow’s.

81. What does all this mean …
What is happening here?

82. Here is the bottom line …

83. Let’s talk about reinvention …
Capital redefines Professionalism: The
Brokerage Success Formula Moving Forward

84. The story of the past
five years …

85. Reason # 4 …
Because the recession happen to coincide with
social, demographic, and technical
developments. When the going got tough the
traditional business model couldn’t get going.

86. Why traditional business models don’t
create value in the new environment
• Inability to respond to current social and
demographic circumstances
• Lack of management controls
• Failure to employ metrics and
benchmarking
• Costs of labor
• Lack of accountability
• Failure to be consumer centric

87. How are we coping …

88. What is the basic challenge …
A business model is a method for
creating value. When a model fails to
create value it must be replaced

89. The traditional brokerage business
model is not creating value for …
• Consumers
• Agents
• Owners
• Investors

90. Here is the moment of
truth …
It is time to reengineer the
brokerage business model!

91. Enter a new player in our industry …
Welcome the investor.

92. What will investors require in order
to provide funding for a brokerage.
• Turn key systems
• Universal accountability
• Effective management control over key
processes
• Agent stability
• Strong consumer connections
• Strong business metrics and benchmarking
• Appropriate market share

93. The other side of the story …
As your brokerage community searches
around the industry for friends and allies it
may be surprised to discover that those that
it thought it could depend on may not be
there. Most franchisors are not in a position
to assist with the development of new
solutions. They are either without sufficient
funding, imagination or they have
committed to global development.

94. The REALTOR® association can be part of the
solution. It has the resources, the staff and
the guts to get you there. Just add
leadership
Give it some thought

95. Where from here …