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ORRA Broker Summit Presentation

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Originally presented at the ORRA Broker Summit by Jeremy Conaway. October 10, 2012.

Originally presented at the ORRA Broker Summit by Jeremy Conaway. October 10, 2012.


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  • I want to tell you a personal storyMy son Jared is 26 years oldAbout that long ago I started working with ORRA
  • I am working with a grou= of foreign investors who are designing your next competitor
  • Rehab versus new construction
  • Transcript

    • 1. 202012 ORRA Chair Stephen Baker
    • 2. Chapter 1.The Why of Today
    • 3. The American real estate marketplace, industry and transaction is currently being impacted by a number ofdemographic, generational, economic, techn ology and informational forces.
    • 4. But even as these forces continue to erode and invade your business and market spaces there is another more insidious factor at work out there. There are individuals and entities from outside our industry who are aware of its potential over the next several years and the possibility, indeed likelihood, that you willchoose not to respond to the trends, directions and forces that are currently realigning our industry’s dynamic.
    • 5. While there is adequate evidence todocument 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.
    • 6. As the monitoring of these forces continues and the intensity of the conversationincreases it is essential to keep in mind that it takes 24 - 36 months to introduce andimplement meaningful institutional change
    • 7. What Do We Know Today• The consumer is in command• 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
    • 8. Where do we start?The immediate challenge for the brokerage community is to learn as much as possible regarding the forces in play, monitor these forces in their local marketplace and, atevery opportunity, engage in the discussionrelative to how they are likely to impact the industry and the marketplace.
    • 9. When do we start …In other words, we start today!
    • 10. This is a Broker Summit …• It is not an association meeting• It is not a United Nation’s meeting• We are not here to be fair• Today we are focused on just one thing• The Success of Your Brokerage Moving Forward
    • 11. As brokers your primary concerns should be being able to …• Be proud of your business and reputation• Manage your business asset in the right directions• Generate a market level profit and ROI• Present a successful consumer value proposition• Sell your brokerage when the time comesAnything that stands in the way ofthese objectives is unacceptable!
    • 12. The elephant in the room
    • 13. The Contemporary Consumer Chapter 2Consider the impact of the rising power of the contemporary consumer.
    • 14. The Contemporary Consumer The REALTORS® and the consumers of the Orlando area are playing out a story. What we don’t know is whether it is a romantic story that will have a happy ending or a comedy which willend in a tragedy. What is clear is that they are not communicating.
    • 15. Tell us a story …This is Orrie, he is a REALTOR®This is Connie, she is a consumer
    • 16. A real guy …Orrie is a high performance agent:• He has over 25 years experience• He sells over 5M annually• He has been trained to be in control• He is a time managing machine• He prides himself in being able to do ten deals at the same time• He loves to terrorize his broker
    • 17. The contemporary consumer …This is Connie• She is into social media• This is her first transaction• She has spend over 100 hours researching for her purchase• She considers herself to be in charge of her transaction• She has a clear idea what role her agent should take• She wants to have a warm and positive experience
    • 18. Conny Orrie• Distant • Engaging• Searching • Warm• Multi-faceted • Complex
    • 19. ConnyBelieves all information is available and freeExpects to be able to validate information & peopleWants to remain anonymous as long as possible
    • 20. Can you tell meeverything aboutthe home andarea? I can tell you how many homes there are for sale!
    • 21. Can you help mefind a place tolive? I can tell you how many homes there are for sale!
    • 22. How long hasthis homebeen for sale?
    • 23. It has 3Bedrooms!
    • 24. What is itshistory? Has itbeen listedbefore?
    • 25. It has 2.5Bathrooms!
    • 26. Can you show mehow this homesprice compares toother homes - forsale, that have sold.or are just nearby?
    • 27. It has 2300 SQFT!Call me for moreinformation
    • 28. Romanceor
    • 29. Comedy?
    • 30. What’s happening out there …The current market environment is marked by a growing level of disconnect between the traditional agent and the contemporaryconsumer. Increasingly when Orrie and Connie get together the sparks fly and we don’t mean romantic sparks. This situation can not be allowed to continue.
    • 31. Who is the best agent around here … Example #1: Consumers want to know who the best agents are in terms of production andneighborhoods. Way too many traditionalbrokerages are refusing to be transparent
    • 32. “I want more information …” Example #2 The contemporary consumer has an insatiable appetite for very specificinventory related data. By and large agents are refusing to provide it
    • 33. What exactly do they want …
    • 34. What about lifestyle information … Example #3Today’s consumer wants to talk about lifestyles and quality of life issues. The vast majority ofagents are only prepared to discuss bedrooms, baths and prices. This is contributing to the growing gap between the contemporaryconsumer, especially within generation “Y,” and brokerages.
    • 35. 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
    • 36. Example #4Today’s consumer (especially the 40% thatwill be forced by circumstances to live in arental 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.
    • 37. Where are they getting it …
    • 38. They want TM … Example #5 Many contemporary consumers want to enjoythe benefits of transaction management so that they can track their transaction. Very few brokerages in each market offer this service.
    • 39. What’s the big deal with TM … During this presentation we will make the case that Transaction Management is thesingle most important process in real estatetoday. It is and it will be the gateway to the new brokerage business model
    • 40. KWI does TM …
    • 41. 92% want TM …
    • 42. I need to know now … Example #6 More and more consumers are asking thatcommunications with their agent occur using smart phones, i-Pads and other mobiledevices with messages being delivered now. Too many agents are responding that they will call after their regular day is over.
    • 43. Is there a problem …What’s the problem here?
    • 44. 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 theunique and well identified expectations and demands of Generation “Y”
    • 45. Wow! Big difference …
    • 46. Could it be …Other’s suggest that there a sense within the brokerage community that its future restswith the aging agent population rather than the contemporary consumer?
    • 47. Here are some of the companies that the contemporary consumers are formingrelationships with. Among other things each has a strong company directed consumerexperience. Which of these serve as a model for your brokerage?
    • 48. Who is your customer …
    • 49. How is Orrie 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?
    • 50. What happen to Connie …Not to worry about Connie, she found what she was looking for
    • 51. What does the market tell us … Chapter 3.What is the Orlando regional real estate market telling us? ORRA CEO Michael Kidd
    • 52. By the numbers: ORRA and Orlando1 Your Association2 The Orlando Housing Market
    • 53. Your Association
    • 54. ORRA REALTORS® & BrokersAs of September 2012: Total Membership of 8,686REALTORS®6,752 members (77.73%) Designated REALTORS® 1,934 members (22.27%)
    • 55. ORRA is a Mega Board8,686 ORRA members NAR Board Size Designations  Mega Board: 7,000+ members  Large Board: 2,000-6,999 members  Medium Board: 500-1,999 members  Small Board: 499 or fewer members
    • 56. ORRA Membership by Type8,686 members REALTORS® Designated REALTORS®  Primary: 6,684  Primary: 1,749  Secondary: 35  Secondary: 185  Responsible Managers: 33 Total 6,752 Total 1,934
    • 57. Years of MembershipAlmost 45% of members have belonged to ORRA for less than 5 years ORRA Membership by Member Duration 31.94% 24.08% 20.78% 15.10% 6.50% 1.59% Less than 1 2-4 5-9 10-19 20-29 30 or more
    • 58. Office SizeMore than half of ORRA member offices are one-person firms ORRA Member Offices by Size 51.68% 32.39% 7.92% 4.06% 1.33% 0.95% 1.66% 1 2-4 5-9 10-24 25-49 50-99 More than 100
    • 59. ORRA Membership by AgeMore than 77% of ORRA’s membership is 40 and over ORRA Membership by Age 28.60% 26.86% 21.48% 18.10% 4.96% Under 30 30-39 40-49 50-59 60 and over
    • 60. ORRA Membership by GenderAs of September 2012: Total Membership of 8,686Males: 52.0% Females: 48.0%
    • 61. Designations11.4% of members have at least one designation Top 5 Designations
    • 62. Designations Top 10 DesignationsGRI 757 55.05%ABR 184 13.38%CRS 143 10.40%CIPS 58 4.22%CRB 29 2.11%SRES 28 2.04%CCIM 24 1.75%AHWD 23 1.67%E-PRO 20 1.45%GREEN 20 1.45%
    • 63. ORRA Agent Sales Agents with One or More Sales in Year Avg. Total Percent of Membership Membership 2007 8,039 12,094 66.47% 2008 6,508 10,028 64.46% 2009 7,636 8,773 87.04% 2010 7,935 8,607 92.19% 2011 7,532 8,273 91.04% YTD 2012 6,661 8,187 81.36%
    • 64. ORRA Agent Home SalesPercentage of selling agents by number of sales Sales per agent (2007 – YTD 2012) 48% 50% 40% 39% 45% 40% 33% 35% 30% 20% 25% 20% 11% 15% 7% 10% 2% 5% 0% 1 sale 2-4 sales 5-9 sales 10+ sales 2007 2008 2009 2010 2011 YTD2012
    • 65. The OrlandoHousing Market
    • 66. Orlando InventoryOrlando inventory decreased 19.16 percent since August 2011 Orlando Inventory 26,313 24,834 21,077 16,361 16,535 10,055 8,128 5,532 3,940 8/04 8/05 8/06 8/07 8/08 8/09 8/10 8/11 8/12
    • 67. Orlando New ListingsAnnual number of new listings by price range Orlando Home Sales (2007 – YTD 2012) 45,000 40,000 29,882 29,381 35,000 21,626 30,000 25,000 20,000 9,654 8,271 7,786 15,000 4,839 10,000 1,752 5,000 0 $1 ‐ $150,000 $150,001 ‐ $250,000 $250,001 ‐ $500,000 $500,001 + 2007 2008 2009 2010 2011 YTD2012
    • 68. Orlando Home SalesAnnual number of total home sales by price range Orlando Home Sales (2007 – YTD 2012) 30000 25000 20000 10,796 15000 10000 2,215 5000 685 317 219 146 143 22 0 $1 ‐ $150,000 $150,001 ‐ $250,000 $250,001 ‐ $500,000 $500,001 + 2007 2008 2009 2010 2011 YTD2012
    • 69. Orlando Normal Home SalesAnnual number of normal home sales by price range Orlando Normal Home Sales (2007 – YTD 2012) 10,000 8,137 7,606 9,000 8,000 5,873 7,000 6,000 3,313 5,000 2,700 4,000 2,017 1,785 3,000 2,000 563 1,000 0 $1 ‐ $150,000 $150,001 ‐ $250,000 $250,001 ‐ $500,000 $500,001 + 2007 2008 2009 2010 2011 YTD2012
    • 70. Orlando Distressed Home SalesAnnual number of distressed home sales by price range Orlando Distressed Home Sales (2007 – YTD 2012) 20,000 18,000 16,000 10,796 14,000 12,000 10,000 8,000 6,000 4,000 2,215 685 317 219 146 143 2,000 22 0 $1 ‐ $150,0001 $150,001 ‐ $250,000 $250,001 ‐ $500,000 $500,001 + 2007 2008 2009 2010 2011 YTD2012
    • 71. Days on Market: Normal Home SalesAnnual number of normal home sales by days on market Normal Home Sales (2007 – YTD 2012) 7,000 5,359 5,335 6,000 5,000 3,446 3,239 2,990 2,888 4,000 2,306 1,864 3,000 1,597 1,194 2,000 982 794 1,000 0 0-30 days 31-60 days 61-90 days 91-120 days 121-180 days 180+ days 2007 2008 2009 2010 2011 YTD2012
    • 72. Days on Market: Distressed Home SalesAnnual number of distressed home sales by days on market Distressed Home Sales (2007 – YTD 2012) 12,000 10,000 6,309 8,000 6,000 2,094 2,042 4,000 1,293 1,130 971 2,000 170 137 107 102 97 91 0 0-30 days 31-60 days 61-90 days 91-120 days 121-180 days 180+ days 2007 2008 2009 2010 2011 YTD2012
    • 73. Orlando Pending Home SalesPending home sales have more than quadrupled since August 2007 Orlando Pending Home Sales 8,945 9,502 9,362 8,237 3,220 2,194 8/07 8/08 8/09 8/10 8/11 8/12
    • 74. Orlando Home Sales by TypeNormal sales made up almost half of all home sales in AugustNormal Sales: 48.03% Short Sales: 28.82%August 2011: 41.04% August 2011: 32.92% Foreclosures: 23.16% August 2011: 26.04%
    • 75. Orlando Median Home PricesMedian home prices by sales type Median Home Prices by Sales Type (2007 – YTD 2012) 300,000 250,000 $240,000 $243,000 200,000 $190,000 $150,762 150,000 $118,000 $95,000 100,000 50,000 0 Overall Normal SS/BO 2007 2008 2009 2010 2011 YTD2012
    • 76. Orlando Average Home PricesAverage home prices by sales type Average Home Prices by Sales Type (2007 – YTD 2012) 350,000 $298,604 $301,607 300,000 250,000 $212,316 $199,447 200,000 $155,161 150,000 $117,509 100,000 50,000 0 Overall Normal SS/BO 2007 2008 2009 2010 2011 YTD2012
    • 77. For more information, visit www.orlrealtor.com. Contact ORRA at orra@orlrealtor.com.
    • 78. Its about time … Morning Break(We are back in 15 minutes)
    • 79. Whose on line … Chapter 4. The Rapidly Transitioning Real EstateInternet Space: Brokerage Ally , Business Distractor or Skillful Competitor?
    • 80. Let’s start by examining how the new breedof Internet based real estate companies are doing with the consumer demands and expectations discussed above.
    • 81. I want to know which agents are good …On the subject of agent rating
    • 82. Trulia does agent rating …
    • 83. Yelp does agent rating …
    • 84. Zip Realty does agent rating …
    • 85. Redfin does agent rating …
    • 86. Zillow does agent rating …
    • 87. What about transaction management?
    • 88. What’s the big deal with TM … During this presentation we will make the case that Transaction Management is thesingle most important process in real estatetoday. It is and it will be the gateway to the new brokerage business model
    • 89. Redfin does TM …
    • 90. KWI does TM …
    • 91. What about advanced inventory information?
    • 92. Remember what they want …
    • 93. NuHabitat has it …
    • 94. NuHabitat has it …
    • 95. Zillow has it …
    • 96. Sawbuck has it …
    • 97. Sawbuck has HomeSnap …
    • 98. Where to get rental info …On the subject of rental vs. ownership lifestyles
    • 99. Information on the decision …
    • 100. The Zillow breakeven …
    • 101. The Zillow rental app …
    • 102. Trulia Market Watch
    • 103. Where can I live my life …Lifestyle information
    • 104. Zillow can help …
    • 105. Street Advisor knows the good stuff …
    • 106. Where can we walk …
    • 107. We have to mention Craig’s list …No discussion of real estate on the Internet would be complete without an honorable mention for Craig’s List. In some marketsentire teams are tasked to Craig’s List basedmarketing activities. It has become a skill set of its own.
    • 108. Craig’s list really works …
    • 109. What about Zillow …Lets take a close look at Zillow
    • 110. I don’t work for Zillow …This presentation is not about selling Zillow. It is about helping you, asbrokers, understand the Zillow competitive model and what it means for your brokerage.
    • 111. They got listings …
    • 112. They got rentals …
    • 113. All the rentals …
    • 114. They have agent reviews …
    • 115. They have lots of consumer infor …
    • 116. Zillow television ads …
    • 117. They are recruiting agents …
    • 118. They are providing valuable agent benefits …
    • 119. Lets try it again, Zillow is recruiting …Zillow has recruited 25,000 of Your Agents
    • 120. 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
    • 121. Most ridiculous of all, your agents who refuse to cooperate with your efforts tocreate systems and consumer experiences are now blindly following Zillow’s.
    • 122. What does all this mean …What should be we thinking here?
    • 123. Here is the bottom line …
    • 124. Lets talk about reinvention … Chapter 5. Capital redefines Professionalism: TheBrokerage Success Formula Moving Forward
    • 125. The story of the past five years …
    • 126. Reason # 4 …Because the recession happen to coincide with social, demographic, and technicaldevelopments. When the going got tough thetraditional business model couldn’t get going.
    • 127. Why traditional businessmodels 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
    • 128. How are we coping …
    • 129. What is the basic challenge … A business model is a method forcreating value. When a model fails to create value it must be replaced
    • 130. The traditional brokerage business model is not creating value for …• Consumers• Agents• Owners• Investors
    • 131. Here is the moment of truth …It is time to reengineer thebrokerage business model!
    • 132. Don’t take it personally …• It is a “no fault” situation• It is a huge opportunity• Half the challenge is attitude• You can do this
    • 133. Most importantly …Most brokers don’t have a choice if they expectto capitalize on their life’s work
    • 134. Now enters the investor …• They are with us now (Zillow, Realogy, Trulia)• The industry is cash poor after 5 years of hardship• Consider the average age of today’s broker• Consider the greatly reduced value of today’s brokerage• Few agents want to be brokers and fewer yet have any purchase money• Selling it to the kids has been less than successful over the past several years• The most likely buyers may be from outside the industry and they will need financing from investors.
    • 135. 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
    • 136. What to do … Even if brokerage owners, executives and managers don’t believe any real change willoccur within the next three years what actionsshould they be taking between now and then?
    • 137. What to do? Even if brokerage owners, executives and managers don’t believe any real change willoccur within the next three years what actionsshould they be taking between now and then?
    • 138. Get started on this …
    • 139. Just do one of these …
    • 140. Each of you has done this before …
    • 141. Here is how to get started …• Create your unique customer experience• Create standards for each experience component• Create a system for each component• Assign responsibility for each component• Create an atmosphere of universal accountability• Set up overview and monitoring• Incorporate metrics and benchmarking
    • 142. This is what will be necessary …• Profitability must be the central focus• Management must be in control of every aspect of the business• Experience and personalities will not have value equal to systems and effective management• The firm’s consumer experience must be defined and implemented across the board• Metrics and benchmarking must be implemented and transparent
    • 143. This is no time to go solo … This is a time to think aboutcollaboration, cooperation and competition.Remember, your new competitor is probably not sitting in this room today. Think about this.
    • 144. The other side of the story … As your brokerage community searches around the industry for friends and allies itmay be surprised to discover that those that it thought it could depend on may not bethere. Most franchisors are not in a position to assist with the development of newsolutions. They are either without sufficient funding, imagination or they have committed to global development.
    • 145. Your REALTOR® association wants to be part of your solution. It has the resources, the staff and the guts to get you there. Give it some thought

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