Marketing in the Real Estate Industry
October 25th, 2021
By: Janny Hong
Imagine handing over $350,000 that you’ve earned and saved to a stranger that will buy your first home. As absurd as it may sound, this is what the real estate industry can look like: the role of a real estate agent is to either sell or buy a property for a client. Given how much trust is needed, getting a client isn’t so easy, so this is where marketing comes into play. Marketing is an integral part of the real estate industry, which comes in various forms, ranging from advocating one’s service to selling a house.
What does a real estate agent do?
As mentioned briefly, the job of a real estate salesperson is to aid their client in buying or selling their home, or monitoring transactions with homes, apartments, buildings, etc. There is a salesperson who works directly with the clients and a broker who manages the salesperson. A real estate agent can act as the representative of the buyer, seller, or as a dual agent (where they represent both the buyer and seller). While one may argue that they don't need an agent to aid the process, an agent has access to greater resources and a greater pool of potential customers.
Marketing One’s Service
The first and often most difficult step of selling a house is to get a client, especially for a new agent. The first and preferred method of getting a client is through referrals. The average family moves once every 7 years so for an agent who’s planning to be in the industry long-term, they can get a listing from the same family a few times in their entire career. Providing a good service encourages their clients to not only continue using the same agent’s services but also recommend them to other people. Word-of-mouth is one of the best ways to reach new clients because while a potential client may not trust a stranger, they trust their friend’s recommendation.
A new agent who has no prior experience may not have this network of referrals. However, there are other ways that agents can utilize marketing to make up for their lack of referrals. In the most traditional manner, they can pay to have billboards and posters with their picture and name advertising their service. There are certain rules that real estate agents need to follow for public advertisements: they need to have the broker’s name, office address, and phone number, which extends to business cards. Digitally, there are sites such as Zillow and Trulia where agents can pay to have direct access to clients. In a sense, these websites serve as brokers between the clients and the agents.
Lastly, agents can directly visit or contact people who may be looking to move out. This means attending garage sales and asking them why they are selling their household goods or directly contacting a person who has a for sale by owner sign on the lawn of the property. Simply talking to new people with cold calls, emails, and postcards is not ideal but an option. Furthermore, neighbors are great potential clients given how well you know the area.
Even though these methods, all agents still need to have a way to distinguish themselves from other realtors, whether that’s being super honest, having years of experience, a lot of free time to dedicate to this one client or a plethora of knowledge of the region. All good realtors have a key component that separates them from another.
Marketing the Property
Most of the real estate services are on the selling side, where agents are hired to sell someone else’s property. The first step is to put the property on the state or region’s website; this means creating a listing by sharing all the basic information regarding the property. The state’s listing service is a great source for both real estate agents and clients, given how you can see all the new postings. While agents are legally obligated to not discriminate against certain demographic groups of clients, putting their property on the website allows potential clients/buyers to narrow down their search by certain traits of the property, ultimately making their search process easier.
After a listing is created on the website, the next group to show the property is to the other salespeople in their office. Given how salespersons can represent not only a property owner but also a looking buyer, there is a chance that a salesperson will find their customer through their co-salesperson who is helping a looking buyer. The other salespersons in their office are direct access to a pool of potential buyers and sellers. However, one potential downside is if there aren’t many other salespersons working under their broker; there will be a limited group of clients being served, ultimately meaning a limited number of potential customers. So, depending on how many salespersons or listings there are under the broker, the office can be a great source.
To further reach the public, open houses and house showings give new and looking customers the opportunity to inspect and buy. An open house is an event where potential customers, whether they are actively looking to buy or simply considering moving, can enter the property and browse; they are usually hosted by the real estate agent when potential buyers are most available, which is usually weekend afternoons between 1 p.m. to 3 p.m. Similarly, house showings are also an opportunity where customers can inspect and look at different houses. However, they are usually private and need to be scheduled beforehand with the seller’s agent.
Looking to the Future
The pandemic has pushed everything online, including the real estate industry. The digital move has caused many online real estate sites, such as Zillow and Trulia, to rise in popularity and traffic. There has also been an increased number of digital showings where agents post video tours of a home or even have live showings of a house. However, real estate is still very dependent on their traditional forms of marketing, most importantly word of mouth, or referrals. That is due to the importance and gravitas of buying a house. People want to get as much data as possible and there are limitations to an online format when it comes to that decision. In a video, clients aren’t able to gauge the latent defects or intimate qualities of the home such as: whether or not the floor is slightly slanted if the home is slightly drafty. For some customers, these nuanced deductions play a big part in whether or not they want to purchase the home. In conclusion, the real estate industry is slowly expanding to other forms of marketing while still depending on traditional marketing methods.
Janny Hong is one of MktSoc's Fall 2021 Co-Content Directors. She is a junior at Stern studying Operations and Computing & Data Science.