Consumers are increasingly taking control of the purchasing process across a wide range of industries, and making decisions with far less reliance on ‘experts’. It is important for REALTORS® to understand the resulting impacts and find ways to respond to trends such as decreasing loyalty, low perceived REALTOR® value, increased switching, REALTOR® auditioning, increasing demands for transparency, Buyer Agency Agreement tension and removing the REALTOR® as middleman. This research report is a part of the British Columbia Real Estate Association's Journey of Discovery. BCREA launched the Journey of Discovery (JOD) to help our organization and BC’s eleven member boards strategically plan for the next five years. This project seeks to understand where the greatest contributions of products and services could be for increasing the innovation of REALTORS® in service of their consumers. If organized real estate is to effectively adapt to and proactively initiate change, which we believe is necessary now more than ever, the first stage is to gain a solid understanding of the current and future states of the industry. For access to the slides with links and our other reports, please visit http://web.bcrea.bc.ca/jod/reports.htm This presentation was prepared by CE Holmes Consulting, Solvable & Monique Morden Consulting

1. BCREA
JOURNEY OF DISCOVERY
THEME 1: CONSUMER AUTONOMY
23 MAY 2014
VERSION 2

2. Image Credit: Arturo de Albornoz “Nike Transparent Billboard”, under Creative Commons Attribution-ShareAlike 2.0 Generic
Image Credit: James Willock, “build($ikea->desks),” under Creative Commons Attribution-ShareAlike 2.0 Generic

3. How can we create opportunities for greater consumer
involvement across the transaction process?
How could the REALTOR® and consumer co-create
within the transaction process?
Many industries struggle to gain the attention of their cus-
tomers, and engage them in their product or service. Think
of insurance, accountants or antivirus software, where
consumers glaze over or avoid the product or service
entirely (or until they can no longer afford not to). Market-
ers in these industries require creativity to get the attention
of consumers (e.g., Geico) in low involvement categories
while marketers in even moderate involvement categories
have more room to create engaging and inspiring brands
(e.g., Nike).
Nike doesn’t involve their customers through inspiring
advertising alone. They employ a multi-pronged approach:
• NikeID allows consumers design their own product,
• NikeTown stores let consumers testdrive products
onsite, and
• Nike+ Running App gives consumers the ability to track
their workouts and share through an online community.
Leverage Consumer Involvement
Apple similarly involves their customers in many ways
through their interconnected web of products and services
including the one million plus apps created by other com-
panies.
More and more companies are bringing the consumer into
the process through “co-creation activities” to strengthen
the consumer relationship and increase loyalty. Dan Ariely
speaks of the IKEA effect where consumers have a closer
connection to a product they have helped create. The effort
involved equals more love for the outcome and a greater
willingness to pay.
The real estate industry benefits from a high involvement
product category where consumers spend considerable
time, thought, energy and information process capacity to
the purchase process. After all it is “biggest purchase of
your life” and “the biggest investment you’ll ever make.”
High consumer involvement is half the battle…but only half.

4. Image Credit: Extraordinary Moments in the Real Estate Experience Image Credit: Mercedes-Benz of Austin, Bob Nolen

5. as performance transparency increases. The brokerage
and REALTOR® profession play will still play important
supporting roles in the overall image of the REALTOR®.
Successful, established REALTORS® will create personal-
ized services centred on the emotional process of buying
or selling a home. REALTORS® entering the profession
may rely more on the credibility of the brokerage for brand
credibility, but only until they have substance to build their
own personal brand. In the case of the REALTOR® brand,
it may even play a negative role due to overall negative per-
ceptions of the profession. (See Theme Deck 2:
Professionalism)
Car manufacturers are creating emotional attachment to
their brands by involving the consumer into the delivery
process. Companies like Volvo, BMW, Mercedes and
Porsche allow purchasers to pick up their new vehicle at
the European factory, drive around Europe and then ship
the car home to North America. What better way to cre-
ate emotional attachment to your brand than through the
creation of memorable experiences as a result of your pur-
chase! Home purchasing is ripe with opportunity for emo-
tion laden moments facilitated by the REALTOR®.
You Should Care More
about the Brand Experience
What can we do to create more extraordinary moments?
What will the future brand of the REALTOR® represent?
Brand experiences are the moments that form an emo-
tional or rational attachment between a person and a
brand. But in the case of a real estate transaction, who/
what represents the brand? It isn’t the running shoe (i.e.,
home or property). It is the individual REALTOR®’s exper-
tise and services consumers are buying. REALTORS®
benefit from a process that puts them in direct contact with
the consumer (as opposed to consumer brands), facilitat-
ing brand engagement through personal connections with
their customers. Brand engagement provides multifaceted
Return on Investment (ROI) from a higher likelihood to
recommend, willingness to pay more and acting as a brand
advocate (e.g., wear a brands logo).
Of course, individual brands don’t usually stand by them-
selves. They are influenced by other elements of the brand
hierarchy including the “corporate” brand (REALTOR®
profession) and the family brand (brokerage). While all
three levels have an impact, our research shows the in-
dividual REALTOR® brand will become more dominant,

6. Image Credit: Apple EasyPay Image Credit: Bruce Spear, Berlin School of Economics

7. them up to play higher value customer service roles. Apple
Easy Pay allows consumer to scan any item from an Apple
Store with their iPhone and walk out with the receipt in
under 60 seconds, completely bypassing the need for
sales associates in the process.
The real estate industry similarly sits at a crossroad where
the signs of the middleman being pushed out of the
equation are evident but not widely acknowledge by the
industry. Similarly, the drivers behind disintermediation
are not yet crystal clear. Technology is often blamed for
something that may more realistically lie in the hands of the
REALTOR® and the industry as a whole.
“The industry frets about Zillow and Trulia and spawns
theory after theory about how they’re out to disinterme-
diate the real estate agent. I got news for ya [sic]. Zil-
low doesn’t need to do a damn thing to disintermediate
anybody. The real estate brokers and agents are doing a
damn fine job of disintermediating themselves with
lackluster, lackadaisical, lackwit [sic] service.”
A Tale of Two Listings: Foreshadowing of the Future
Rob Hahn, 9 May 2014
Slippery Slope of
Consumer Autonomy
What is ORE doing to pre-empt the disintermediation of
the REALTOR®?
Does ORE have the courage to disintermediate itself in
order to provide the consumer with more value?
Consumer autonomy is defined as the ability for consumers
to choose products independently, rationally and without
undue influence or pressure. Buyers and sellers are striving
for autonomy in the real estate transaction process, slowly
pushing REALTORS® out of the way, one stage at a time.
This growing autonomy is being driven by a desire for an
unbiased process and perceptions of value for service.
Disintermediation is the process of removing the middle-
man from the transaction. The travel industry largely re-
moved the travel agent by letting consumers book direct. In
2004, Ana Marie Cox provided an avenue for the public to
bypass traditional media through her political blog making
previous heavy weights like The New York Times and Balti-
more Sun appear like relics of the past as they struggled to
keep up with the transformation of the newspaper industry.
Apple didn’t just disintermediate the music industry; it had
the courage to disintermediate its own employees, freeing

8. Image Credit: MyStarbucks Image Credit: Dash by AmazonFreshOfficial

9. What can we do to reduce friction across all stages of the
real estate transaction?
Could frictionless transactions enable consumers to
conduct transactions more frequently thereby increasing
market liquidity?
The consumer experiences many points of friction in the
transaction process, potentially inhibiting some from enter-
ing the market and others from conducting transactions
more often. In a world where REALTORS® may face the
reality of doing more for less, an increased number of
transactions can mitigate the situation. This can be
achieved by reducing friction in buying and selling.
Companies like Amazon recognize that their success is
contingent not just on providing top products and services
at low prices, but making it as convenient as possible
to buy quickly and anywhere consumers might want to
purchase. Amazon has taken incredible efforts to identify
where purchasing friction exists, and create offerings
targeted at eliminating the purchase friction. Amazon
continually reduces friction from shipping (free purchases
greater than $25) to Amazon Prime (membership gets you
free shipping) to Flow an augmented reality app allowing
Frictionless Transactions
you to scan the bar codes of products around you at home
or in-store to find it on Amazon, to adding products they
discover on Twitter without leaving the microblogging site.
Amazon Dash allows consumers to say or scan their
groceries from home directly to their AmazonFresh
shopping list.
Amazon isn’t the only company creating frictionless trans-
actions. Starbucks has two mobile apps: mySTARBUCKS
APP is about the ease of finding stores and consuming
their products while the Starbucks Card Mobile App does
everything to ease the purchase process including tweet a
coffee where you can use twitter to send a friend a coffee.
Car manufacturers have made it easier to understand the
many makes, models and options they offer putting config-
uration in the hands of the consumer (e.g., Build your own
Mini, Audi Configurator, Toyota Build Price). Further to
the build and price features are additional shopping tools
designed to facilitate a transaction: model comparison,
payment estimator and inventory search.

10. Image Credit: Wealthbar
Image Credit: Intellimortgage via ratehub.ca

11. The legal industry is also being affected:
Contractual.ly offers cloud based contract management,
Will-o-Matic creates your will through a user friendly online
wizard, and LawDepot helps you create customized legal
documents. These services haven’t disintermediate lawyers
completely, but it has for some types of transactions.
What if all those online dating sites with sophisticated
algorithms based on profile information was adapted to
connecting home buyers and home sellers instead of sin-
gles? Imagine the transformation of the FSBO market:
eHarmony offers eHarmonyHome, Plenty of Fish offers
Plenty of Homes, or Match.com offers HomeMatch.com.
The same matching service could extend to lawyers, home
stagers, mortgage brokers, and home inspectors making
the REALTOR®’s personal network less relevant. (See JOD
Theme Deck 3: REALTOR® Match)
New Wave of Professional
Services Ease
If you hold the view that the complexity of a real estate
transaction can’t be compared to the simplicity of buying a
$5 latte, let’s look at examples of enabling complex profes-
sional services.
There are many examples of friction reducing mechanisms
in more complex consumer transactions. Vancouver start-
up Wealthbar is a professionally guided approach to online
investing where they develop a financial plan, create a bal-
anced investment strategy and monitor investments. Intelli-
Mortgage lets consumers build their own custom mortgage
and obtain quotes from dozens competing lenders but also
connects them with a mortgage broker should they require
additional advice. Get access to information and advice on
investments from independent enablers (e.g., Globe Inves-
tor, Fool Canada, Yahoo! Finance) or those associated with
financial institutions (e.g., BMO InvestorLine, RBC Direct
Investing) and complete transactions yourself with any
number of online stock brokers (e.g., Questrade, Scotia
iTRADE, Interactive Brokers).

12. Image Credit: Wind Mobile Image Credit: Divorce by Luis Prado from The Noun Project

13. Are REALTORS® perceived as innovative?
What can ORE do to increase industry innovation?
What can ORE doing to help consumers choose the best
REALTOR® fit?
Consumers are shying away from locking into an agree-
ment without a guarantee of value. Buyers are delaying the
choice of a REALTOR®, waiting or refusing to sign the
Buyer Agency Agreement or backing out of agreements to
switch REALTORS®. NAR 2014 Buyer Seller Generation-
al Trends Report states that only 40% of consumers had a
written agreement with their agent. Some buyers delay the
choice of a REALTOR® right up to the point of making an
offer, or bypass a buyer agent entirely by approaching the
listing agent directly.
In the mobile phone market where consumers switch
providers often, research found that perceptions of the
provider being innovative and providing high quality service
not only prevents switching but encourages the purchase
of add on services. In other words, the perception of being
innovative is equally as important as the perception of the
service quality delivered by the provider.
Switching on the Rise
Mobile phone carriers experienced a similar paradigm
shift. 25% of North American consumers (New Millenium
Research Council) now have prepaid plans due a market
response to a price sensitive segment of the market
disgruntled with rigid long-term contracts.
With 15% and 20% of the population switching one or
more financial services products annually (Hay Research:
Financial Switching Study), financial institutions like TD
and RBC have make it easier for consumers to switch, not
only covering the costs but doing the work for them. By
recognizing the behaviour is occurring despite them, finan-
cial institutions are facilitating the switching even with the
knowledge switching could work against them. However,
knowing they provide value over the competition gives
companies the willingness to see threats as an opportunity.

14. Image Credit: Dan Ariely, Chapter 1: The Truth About Relativity, Predictably Irrational Image Credit: realtor.ca
You might think the one on the
left is, but they’re actually the same
size. The use of surrounding dots
makes one relatively bigger and the
other relatively smaller
Which dark orange dot is bigger?

15. needed across all transaction stages. We are good at com-
paring things that are similar but not so good at comparing
those that are not. Dan Ariely uses a real estate example
to make this point using the scenario of an agent show-
ing you three houses. The first is a contemporary house,
while the second is a cheaper colonial house needing roof
repairs and the third is a colonial house in good condition.
Ariely argues that we would irrationally choose the colonial
in good condition. Why? We take the contemporary house
off the table because we have nothing to compare it with
but we can directly compare the two colonial homes pick-
ing the one in better condition.
“The REALTOR® had nothing to do with finding our
house.” - JOD Research Participant
Only 17% of consumers report contacting a REALTOR®
as their first step during the home buying process (NAR
2014 Buyer Seller Generational Report). More and more
buyers finding their home themselves–43% of consumers
found their home online versus 33% through a REALTOR®
(NAR 2014 Buyer Seller Generational Report). This
further proves the trend toward consumer empowerment
and autonomy as they make decisions without the undue
influence of the REALTOR® which can be perceived as
pushy and aggressive.
REALTORS® Relinquish Control
of Front-End Buying Process
How can REALTORS® add value to the search process?
Are we facilitating or controlling the buying process?
REALTORS® are allowing consumers to shut them out of
the early stages of the buying process (JOD Transaction
View Report). Consumers are doing this due to a percep-
tion they can better perform these functions themselves.
And this is for a free service from their REALTOR®! Or is
it? Buyers realize they are indirectly paying for the services
of their REALTOR® and the seller’s REALTOR®. The value
for services received is influencing the perceived value. If
REALTORS® cannot determine how to add value at the
early stage, this opens the door for consumers to take over
later stages of the process as well.
“Research in psychology has revealed that our decisions
are disrupted by an array of biases and irrationalities:
We’re overconfident. We seek out information that
supports us and downplay information that doesn’t. We
get distracted by short-term emotions. When it comes to
making choices, it seems, our brains are flawed
instruments...The real question is: How can we do better?”
Chip and Dan Heath, Decisive
If we think of the role of the REALTOR® is to help consum-
ers make good decisions, it is clear that REALTORS® are

16. Image Credit: Truecar
Image Credit: nican45, “Blood Chocolate - audition, 27 April (30),” under
Creative Commons Attribution-NoDerivs 2.0 Generic

17. tioning their work to buyers. After having done their listing
research, some sellers are holding listing auditions where
they invite REALTORS® to provide proposals for the listing
including the list price and their marketing strategy.
“Clients are interviewing other REALTORS®... with about
75% of my listings the clients had 3 other REALTORS®
in besides me. They have a very good idea of what they
want to price at.”
REALTOR® Michelle, JOD Research Participant
How can we help REALTORS® provide differentiated
marketing plans?
This process allows sellers to easily compare the value
proposition of REALTORS®. Consumers indicate there
are few innovative marketing techniques REALTORS® are
undertaking. Successful REALTORS® are executing on
the fundamental marketing plans employed by most
REALTORS® but through quality execution. In general,
they are not providing unique solutions so sellers are taking
the initiative to market their home through different
channels and to different customer segments—potentially
reducing the perceived value of the REALTOR®.
Consumers Gain Control
Over the Selling Process
Are we facilitating or controlling the pricing
information?
Sellers perform considerable research setting the listing
price for their home, leveraging easily accessible informa-
tion (MLS listings) or less accessible information (neigh-
bours, REALTOR® marketing materials, open houses or
old fashioned word-of-mouth). Consumers are somewhat
resentful of having to work so hard (friction points) to get
this information, and increasingly using REALTORS® as
a final check for the listing price to create peace of mind
(JOD Transaction View Report). A similar sentiment can
be found with car buyers. Truecar enables consumers to
obtain market-based pricing data on new and used cars,
and to connect with their network of Certified Dealers.
Other sites assist consumers with pricing information on
consumer products (e.g., Consumer Reports, Consumer-
search).
How does the REALTOR® stand out during an audition?
Service providers all go through auditions whether formal
or informal, stringent or lax. Lawyers are similarly going
through auditions. Crowdsourcing sites have changed the
advertising industry for logo designs, graphic design, and
websites where designers create on spec essentially audi-

18. Image Credit: Josh Breinlinger, Disintermediation in Marketplaces and How to Avoid It

19. past 10-20 years has fueled this decline in value percep-
tion as associated fees have increased proportionately, yet
the services rendered are unchanged while consumers are
doing more. The future points towards a market where
REALTORS® will need to do more for less money per
transaction, thereby necessitating more transactions. The
Journey of Discovery qualitative research revealed discon-
tentment about the value for services received in a market
where the practice of the REALTOR® is homogeneous to
that of his peers. Looking into the future, this discontent-
ment will grow more intense for two reasons: 1) if left
unchecked, commissions in BC will continue to rise with
the market, and 2) if the services provided remains as is,
the value perception will continue to decrease.
Dissatisfaction will motivate more consumers to cut out the
REALTOR®.
What did I Get for
that Commission?
How can ORE help REALTORS® enhance their value for
services received?
Josh Breinlinger makes the link between consumers’ per-
ceived value of a service/product with the likelihood for
disintermediation in his blog post. “The only truly sustain-
able ways to combat disintermediation is to either lower
the fees or raise the perceived value.”
When the perceived value is lower than the fees charged,
the consumer will find a way around the process.
REALTORS® risk being bypassed as consumer percep-
tions that the value for services received from a
REALTOR® is declining, creating discontent. This may
seem counterintuitive when NAR reports that the vast
majority of consumers are very or somewhat satisfied with
the process: 91% for the buying process and 85% for
the selling process. However, just over half are very satis-
fied with buying process (57%) or selling process (56%).
When thousands of dollars of fees are being paid, being
somewhat satisfied won’t positively influence value percep-
tions. The dramatic increase in BC home prices over the

20. Image Credit: The New York Times, “Is It Better to Rent or Buy?”
4
The chart below gives you a snapshot of generational characteristics and what they want from an association membership.
Baby Boomers Generation X Generation Y
Born 1946 -1964 1965 - 1981 1982 - 1995
Size 78 million 48 million 80 million
Nicknames
Me Generation
Love Generation
The Gray Ceiling
Slackers
MTV Generation
Millennials
Echo Boomers
Trophy Generation
Characteristics
Hard-working, loyal,
confident, cynical,
competitive
Anti-authority, highly
individualistic, self-reliant,
family-focused
Confident, digital thinkers,
sense of entitlement, needy
Why they are the way
they are
The wealthiest, healthiest,
largest generation of their
time. Raised to pursue the
American Dream.
Children of workaholics and
divorce, the arrival of cable
television and computers.
Raised to be self-sufficient.
Micro-managed by their
parents, technology, always
rewarded for participation.
Raised to be high achievers.
Communication
styles
Prefer detailed dialogue
in-person or via phone.
Appreciate meetings. Believe
no news is good news.
Prefer close, concise
communication—not
over-explaining, clichés or
corporate jargon. Prefer
e-mail.
Prefer frequent feedback
and problem-solving via
technology instead of phone
calls or meetings.
Problems they are
facing right now
Dwindling retirement funds,
job dislocation, rising health
care costs or inadequate
health care coverage.
Debt, caring for young
children and aging
parents, balancing life and
career, stuck in middle
management.
Debt, unemployment,
difficulty transitioning from
college career, negative
stereotypes, being taken
seriously.
What they want from
an association
Opportunities to lead and
leave a legacy.
Opportunities to further
their careers and foster
relationships with their peers.
Opportunities to learn from
mentors and gain access to
new skills and information.
Volunteer styles
Want to lead. Like to manage
others. Like to hold meetings
and discuss strategies.
Want autonomy. Hate being
micro-managed or anything
that wastes their time.
Want structure. Expect
immediate feedback and
increasing responsibility.
Flaws
Have a “been there, done
that” attitude, not always
open to new ideas.
Have difficulty committing,
tend to have a “wait-and-
see” approach.
Have short attention spans
and high demands and ask
“what’s in it for me?”.
Turn-offs
People questioning their
abilities or suggesting they
try something new.
Loyalty that goes
unrewarded.
Dismissing their ideas for
lack of experience.
Image Credit: XYZ University, Engaging Young Generations

21. While everyone demands value, Millennials have proven to
be even more value driven than most. Having come of age
during a major recession with high rates of unemployment,
high rates of underemployment and modest household
income levels, many are struggling to make ends meet let
alone get ahead. SymphonyIRI’s Shopper Sentiment Index
indicates Millennials have a low level of financial confi-
dence since they are debt loaded, strapped for cash and
price sensitive causing them to be particularly value driven.
Tech savvy Millenials are expressing discontent with the
perceived value of services provided by REALTORS® and
helping one another manoeuver through a system where
they perceive no real value (Real Estate Agent Commis-
sions – Decoded!). Don’t expect discontentment about
perceived value to be driven by sellers alone. Millenials,
who represent the bulk of new home buyers entering the
market, are well aware they are indirectly paying for
REALTOR® fees through the purchase price of their home
and would much rather pay a lower overall purchase price
(minus the commissions). Millenials present the per-
fect storm for disintermediating the REALTOR® – cash
strapped, value driven, tech savvy, open to new process.
Millennial Generation
Ups the Ante
Are REALTORS® prepared to engage and service
Millennials?
Is ORE prepared for the type of services the Millennial
generation demands?
The NAR 2014 Buyer Seller Generational Report pro-
vides a wealth of information on Millennials approach to
real estate. Despite needing the most guidance in the
process, Millennials are the least likely to contact a REAL-
TOR® as their first step in the process and the most likely
to find their house online. Being hugely tech savvy, this
demographic has high expectations for customer service
including mobile solutions, social media connections and
fast response times. An aging REALTOR® population chal-
lenged to keep up with technology may struggle to keep
up with this customer segment and how to create brand
engagement through technology as opposed to personal
interactions. For more information on Millennial expecta-
tions see the JOD Secondary Research Synthesis Report
or Engaging Young Generations by XYZ University.