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Real Estate Agencies – Does Brand Matter When Choosing Real Estate Agencies?
Real Estate Agencies – Setting up a real estate agency is a relatively straightforward process. The legal requirements to do so are low, which means that pretty much anyone can quickly get into the industry and start making money.
For that reason, incumbent real estate agencies have a powerful incentive to work on their brands. They need to somehow differentiate themselves from all the new entrants vying for clients in the market.
The question for people buying and selling properties is whether any of this matters. Does the brand make a difference?
Why Branding Might Be Important
Branding clearly matters to real estate agents themselves. If they can create a business persona that allows them to stand out above other providers in their industry, they are more likely to attract clients.
The overriding goal for agencies is to get sellers to believe that they can fetch a better price for their property. Commissions could be as high as 6 percent if sellers know that the agency can bump up the sale price of their properties by more than, say, 8 percent.
Branding may also matter somewhat to clients themselves. It’s a signal that an agent has experience, has been around for a long time, and can get better prices for their real estate transactions.
Many established brands, for instance, maintain strong links with buyer communities. They’re much better able to find keen buyers with higher consumer surplus, willing to pay as much or more than the asking price.
Bigger brands may also provide some unique advantages for seasoned or frequent property investors. Organizations with established brands usually have the financial capital to do research into the market and provide property hunters with unique and helpful insights. Only making insights available to customers gives them an advantage in market situations.
Smaller agencies that don’t have established brands must usually employ people with less experience in the industry. And that can hamper the quality of their research. Thus, a brand can be a proxy for the educational output of an agent.
Why Branding Might Not Matter All That Much
On the other hand, some might argue that while branding is important in most industries, it’s not in the real estate agency market.
Some real estate agents worry that buyers and sellers won’t use them when they first set up because they don’t know their brand. But they soon discover that they can carve a niche for themselves and gain paying clients even if they are new. It’s not that difficult.
Evidence and experiences suggest that clients care most about the quality of the service they receive. Branding tends to play second fiddle.
When it comes to customer experience, smaller firms actually have an advantage in this area – and clients know it. Independent agents tend to be more flexible and don’t have to abide by endless corporate rules and regulations.
Working in a smaller shop also helps a lot of smaller real estate agencies feel more like a unit. Everyone works on the same sales. You don’t have separate agents pursuing their individual projects. The business becomes a tighter unit.
What Role Do Online Agents Play?
Estate agent branding probably had more value in the past when clients had no choice but to go to the big high-street brands. But thanks to the internet, that’s all now a thing of the past.
Aggregator websites collect all the properties for sale for listing by individual agents on a single platform. Under this setup, buyers now shop for properties directly. The agent listing them is usually a secondary consideration.
The internet, therefore, is becoming a great equalizer. Buyers don’t care a great deal about who made the listing on these aggregator sites. The main consideration is now the quality of the property and what it offers.
Around 95 percent of people search for new homes online, mainly because the process is incredibly easy. Agents still have a role to play when searches become more serious. But what buyers really need are people with great writing and presentation skills who can showcase their properties at their best.
The aim of the game now is to create robust multiple listing services where agents attempt to sell properties via the major online platforms.
Given the rise of the internet, brokers are finding it increasingly difficult to brand themselves in the first place. They’d like to be different from the next firm – and they probably are – but making that distinction clear for consumers is going to be the main challenge heading into the 2020s.