The building blocks of real estate's future

Last Friday, I found myself driving from Dallas to Waco. Destination: Baylor University. The reason: To participate in a 2-day think tank regarding the state of affairs of real estate sponsored by Gary Keller, Chairman of Keller Williams Realty.

Baylor is Gary’s Alma Mater. In March of 2007, he donated $5 million to the University to establish the Keller Center for Research in Residential Real Estate. The Center's purpose is to explore the behavior of consumers in their decisions and relationships with agents. To research those parts of real estate untouched by academia.

This about putting an end to off the cuff opinions.
Dead ideas.
With little to no research behind them.

I was eager to arrive, albeit eight hours late due to a delayed flight from DC to Dallas. Once there, I joined the 60 or so invitees – a mix of top producers and those with a “track record of success in real estate” to tackle the issues confronting the real estate industry. Our assignment was to craft a viable mandate that will deliver real value - not just to Keller Williams - but to real estate as a whole.

It was 7:00 pm when I entered the campus. I rode the elevator to the 5th floor of the Hankamer School of Business. The room was on break. Seeking their third wind. While heading over to my appointed table I spotted Sami from Trulia who briefed me on the day's events.

At the front of the room, projected onto on the screen, was a simple list. 12 words. The issues facing real estate. Lead generation. Lead Conversion. Lead Management. Advertising. Branding. Terms and practices generously shmeared inside the bagel that is real estate - over abundant, wasted and oozing out from all sides.

On the floor, 10 round tables. 10 seats each.

Gary led the event flanked by his writing partner, Dave Jenks. They provided an intense one-two punch of wit, insight and forward thinking. They motivated the thought process. Stimulated the conversation. Gary talked about the state of affairs in real estate and the affects the downturn is having on all participants in the industry, including brokers who knew what to say and what to do when homes were flying off the shelf but are now unclear on how and what to do as things sit. As people freak out.

They talked about consumers and the smart money they once had earning 25% a year in home equity that now can’t seem to perform at all. He talked about the reevaluation of purpose, meaning, people and expenses. He brought up the concept of caution. Extreme caution.

I had just read a story in the Wall Street Journal about a Vegas Realtor who lost the 14  homes he purchased over the past 2-years. He understood extreme. Had no concept of caution. I wondered how many clients he placed in his sinking boat.

This is a big reason why this event was so important. 

I dug into the exercise. Our charge: Discuss issues and isolate the practices that appear to work regardless of market trends. Hour after hour each table reported their conclusions, producing a series of powerful questions and concerns that would serve as the basis for a consumer research project that the faculty and students at the Keller Center would undertake.

This two-day summit should have lasted five days. The foundation of a new real estate business was being formulated by architects decidedly committed to fixing a broken industry.

It ended Saturday afternoon and I drove to Austin to catch a flight home. Texas is a big state. We covered a lot of ground. If you’re ever in Waco eat at Buzzard Billy’s. Order a Steiner’s, raise the glass and toast the town where the bricks building the future of this business are being made.

- Davison

Century 21, the first choice among young, first time buyers

Focus groups are so critical. Even informal, unscientific ones are better than nothing. They always reveal hidden gems.

Last night I found myself in the company of a dozen 27-31 years olds. None owned a home. When asked what I do, I explained the mechanics of a consulting company and its role in real estate. The conversation meandered, but soon my instinct to mine kicked in.

I learned some interesting things from this group:

• Predictably, all would turn to the Web as the first step in searching for a home.
• None would visit agent websites in this process. Each felt that by going there they would somehow be sucked into a sales cycle.
• The consensus was that all agents are alike and only care about the sale.
• When asked why, most said they don’t have a concrete reason. Others stated they have heard others say this. But none had their own experience to draw from.
• They would never, under any circumstances, fill out a form on a real estate agent or broker site that required them to cough up their contact information.
• If they were interested in a home they would call the company powering whatever site they were on to find out about it.
• When asked how long they would be willing to wait for a call back, the average, surprisingly, was around 24 hours.
• I asked them how they go about choosing a Realtor. None said by their website. One person, a 29 year-old law school graduate said, “I’d walk into the closest Century 21 office and pick the first 40 to 50 year-old woman I could find.” One by one, each of the individuals agreed. Especially on Century 21. When asked why, several said “it’s the brand I grew up with”. It’s the one they know. The only other brand that received acknowledgment was RE/MAX. I rattled off a few others and most to all went completely unrecognized.

Who knew?