How Vancouver Real Estate Has Changed in the Past 20 Years
I gave my notice to Sotheby's International Realty Canada in November 2018 to return to Sutton Group West Coast. Sotheby’s was a wonderful place to hang my license and I will always regard Sotheby's as one of the greatest brands in the world, but the world of real estate has changed significantly in the past 10 years and it was time to move forward.
Let me explain. Twenty years ago realtors depended on their brokerages for credibility and exposure. Back then, selling real estate was all about the corporate brand behind you and the network and reach your brokerage brought to the table. More importantly, brokerages and realtors were keepers of information. Brokerages were in the real estate business. They made money from a percentage split of what the realtors brought in in commissions. The better the realtors did, the better the brokerage did, so having the best realtors in your brokerage made a huge difference to the brokerage’s bottom line.
As technology evolved from 2005 to 2015, this era was all about exposure. Individual realtor websites rose higher and individual brands grew larger (locally) than the corporate brands behind them could. This in turn could expose the property to more and more buyers faster than the traditional print advertisements could. As there was very little competition in the early years of the web, these changes gave the edge to the local realtors with high google rankings and focused social media presence in hyper local and specialized markets. Individuals could build huge brand awareness for very little cost and in the eyes of the consumer, realtors could become more significant than their brokerage. This prompted many brokerages to change their business models from a percentage split to a flat monthly fee.
Today, thanks to the much improved Realtor.ca, every property across Canada is exposed to every device around the world more powerfully than any individual or any brokerage could dream of. No longer can a realtor website, or even a brokerage's website compete with Realtor.ca's search function on either desktop or the mobile function. It's obvious, brokerages and realtors are no longer keepers of information, but your realtor should be able to interpret the information to help you make some important, informed decisions.
This shift has taken brokerages in to a completely new business direction. No longer are brokerages in the real estate business, they are now in the realtor business. Most brokerages have incorporated the flat monthly fee structure with additional costs such as deal transaction fees, photocopying and office fees. The more realtors they have, the more profitable they can be. It doesn’t matter if the realtors are selling 6 properties or 60 properties per year as long as their credit cards go though and the brokerage can collect their fees.
The focus of the brokerage has become more about recruiting and headhunting than about teaching realtors to sell more. This is why there is no dominant brokerage with dominant players anymore. Brokerages want licensed realtors who can pay their monthly bills and if the brokerage can attract a top producer to their brand that’s a bonus. This is why every brokerage has great realtors, and every brokerage has realtors who are in the verge of financial trouble. As realtors becomes less dependant on the brokerages, brokerages are all scrambling to find their new value proposition, but in most cases it’s become a race to the bottom with who can attract talent with the cheapest fees.
So where are we now? Heading in to 2019, even social media exposure and advertising doesn't have the same impact it did 5 years ago. Don’t let your realtor fool you, flyers, emailing lists, bus benches, newspapers and even social media advertising won’t sell your condo anymore. These are only tools for realtors to attract new listings and buyers. Furthermore, Facebook and Instagram are both littered with advertising. Unfortunately for the advertisers, people have become immune to the constant noise and manipulation. The brokerages are certainly not going to sell your property either because thats not the business they are in anymore.
Every consumer is on Realtor.ca. This is where all the listings are so this is where all the eyeballs are. Therefore now, from a marketing point of view, it’s all about the property’s positioning and narrative. Showcasing the condo in the right light and telling the right story to entice the serious and qualified buyers to go from voyeur to purchaser. To be honest, the only marketing means required in 2019 to showcase the property are quality photos, videos, floor plans, street view and matterport tours.
Everything else that will sell your condo is the intangible your realtor brings to the table. It’s what separates the realtors who can sell in a tough market and those who can’t. No longer is real estate about putting out the listing on Wednesday and taking offers on Monday. The market has changed and the consumers have spoken. It’s time to go back to the basics where your realtor and only your realtor makes the difference.