If you’re a real estate professional, it’s no secret that 2023 has been a hard year. As I’ve talked with lots of real estate agents, lenders, loan officers, and other professionals that serve the real estate industry, it’s been obvious that it’s been one of the hardest years for the real estate industry. Whether it be interest rates, low inventory, or even the looming lawsuit over buyer commissions, we seem to be entering a new era. With this new era, we will likely see many realtors continue to shift out of the industry for good, and others shift how they do business to continue to thrive. What is unknown is how changes in the real estate market will affect how buyers and sellers interact with real estate professionals and whether their behavior will be shaped more by legislation over commissions or if it will be other societal factors. My gut tells me that that how people interact with real estate professionals, especially real estate agents, will be shaped more by societal factors outside of real estate than what happens within. I could be absolutely wrong, depending on what expert you talk to, and I’m okay with that.

 

Societal Change

 

The reason I believe societal change will have a greater impact on how consumers work with real estate agents isn’t because I think legal ramifications that impact buyer commissions are insignificant. It’s because the compounding pressures and societal changes we are experiencing as consumers are so overwhelming. Think about how much our world has changed over the past 10 years. Would you say you have more mental clarity today or 10 years ago? More energy for appointments or less? More patience during your transactions or less? Spending more money on necessities or less?

You probably understand what I mean by now. It’s not getting easier to create the life we want in certain respects. Yes, we can reach and meet so many people today because of technology and social media but at the same time we have less bandwidth to truly connect with people because of all of the challenges we are facing. This is why I believe the societal changes will have the greatest impact on real estate in 2024 and beyond.

As societal changes have made it easier to meet people and made it more difficult for us to truly connect with them, people’s needs have changed to desire a different frequency in their relationships and who they do business with. This is changing how they do business too. Because people don’t have the bandwidth to focus on as many relationships, I am seeing people pursue less, more enriching experiences with the professionals they do business with. People don’t have the patience for transactional relationships like they may have had 10 years ago and they are only adding new relationships that bring unique value and experiences. What I mean by that is they desire the convenience of an Amazon, with the care and connection of Nordstrom’s. This is why realtors must shift from being real estate agents to being real estate advisors.

 

How To Thrive In 2024 & Beyond In Real Estate

 

As a real estate agent, clients tend to think of you when they want to buy or sell a property which is on average every 7 years or so. This is why statistics say over 75% of people use a different real estate agent each time they buy or sell a property. Why aren’t they choosing to do business again with the first realtor they worked with? Well, there are several factors to consider when it comes to that. The first reason is the industry is extremely difficult being 100% commission with plenty of expenses that go into running a successful real estate practice and the agent may not still be in business when it comes time for their customer to make another purchase. Another reason is 7 years is a long time to try to stay relevant in a relationship, especially if all you have to offer is being there when someone is ready to buy or sell a property. This is why the real estate agents who will thrive in 2024 will become real estate advisors and exit the real estate treadmill where they must constantly look for people ready to buy or sell today. They will instead shift their focus to working with clients that want to build wealth and value having a professional that will help them plan for the future and play a major role in facilitating the relationships, opportunities, and services they will need to be successful long-term. Real estate agents, for the most part, haven’t been seen as being critical to their client’s success which is why there has been so much discussion about commissions and people thinking they can list their own house without a realtor. That is changing for real estate advisors because they have established the value they bring to their client by expanding the nature of the conversations they have with their client, their comprehensive approach to serving in the relationship, and how they continue to lead the client beyond the close of the transaction. This is possible because instead of allowing real estate to dominate every conversation, which is the case with most real estate agents, real estate advisors are taking the time to build relationships that transcend real estate, which allows them to serve the client beyond real estate. Real estate advisors take ownership in helping the client build the life of their dreams by curating and facilitating the important relationships that will be critical to the success of the client. This could include connecting their client to a financial planning firm to help with retirement services, introducing their client to a staffing firm or employer that has opportunities they’re looking for, or taking the time to sit with their client and build out their long-term real estate investment plan. The real estate agent who commits to becoming a real estate advisor commits to shifting from transactional to transformational. They bring an experience to their clients that cements their relationship for the long-term, protects their future in real estate, and allows them to monetize partnerships so they aren’t solely dependent on the sell of a home to get paid. By owning the relationship, real estate advisors can build economic strategies in the same way their brokerages do, by building partnerships and establishing legal ways to get compensated while staying within RESPA guidelines. This is the one approach successful realtors are taking that will allow them to thrive in 2024 and beyond. If you’re wanting to thrive as a real estate advisor, let’s talk about it!