December 4, 2023
This is a crucial time for real estate agents and brokers to understand and communicate the immense value they bring to their clients. Having a clear understanding of your “Value Proposition” (the unique skills, knowledge, and value you as an agent bring to the table) is essential in a time of real estate boom and in times of uncertainty and change. This article will identify a few specific deliverables all agents and associations can bring to the table that stand out regardless of where the market is. While the real estate industry seems to be ever evolving because of technology and changing structural dynamics, having a clear understanding and ability to articulate your Value Proposition will serve as a concrete pillar and anchor during times of change or times of prosperity.
One of the most significant ways REALTORS® can serve as an asset to a client or transaction is being knowledgeable in the local market. REALTORS® provide Local Market Expertise in a manner that technology and systems cannot yet match (although Artificial Intelligence “AI” may narrow this gap in the next few years). Think about the knowledge that comes from a qualified agent working and living in a particular market for an extended period of time. As agents spend time working (and often living) in a given market, they come to possess in-depth knowledge of that market, the businesses, the people, and the local ordinances and practices that make it up. This knowledge includes understanding pricing trends, neighborhoods, school districts, who the powerbrokers of that community are, and community amenities among other things. This expertise is invaluable when assisting clients in finding the right property, because an agent can utilize these pieces of information to curtail the transaction process to suit the client's individual wants and needs, ultimately finding the best match of what the market has to offer with the client’s desires and goals.
Building on this Local Market Expertise is the set of essential Negotiation Skills that agents use in their day-to-day business. Standing in between sellers and buyers as a part of a standard course of business, REALTORS® negotiate in some capacity every single day they show up to work. As repetition and practice refine an agent’s negotiation skills, agents are better able to work on behalf of their clients to secure the best possible deal. Most agents do not realize it but given how much time they spend negotiating each day, many become very proficient at negotiating in their practice. Ultimately, the development of sharp negotiation skills leads to saving clients time and money. It also allows agents to promote themselves as strategic assets in the deal making process. Negotiating Skills add value to an agent’s Value Proposition because an agent can leverage their Local Market Expertise strategically to the benefit of their clients.
Another critical element of an agent’s Value Proposition is the procedural expertise they bring to each transaction. While it may not be the most “fun” or exhilarating part of an agent’s practice, the procedural expertise an experienced agent possesses enables them to Guide the Process of a sale. As any agent or purchaser knows, buying or selling a property is complex and time-consuming. It involves paperwork, inspections, legal procedures, permits, etc.. Mastering these procedural steps allows agents to bring value because they can provide guidance and efficiency to each transaction ensuring that clients understand and complete all necessary steps.
So far, each element of the Value Proposition discussed has identified how an individual agent’s unique skills add value. There is another perspective, however, by which agents bring value to their clients: their Professional Network. Simply, as an agent, you are not always going to have the right answer, but most agents will know other knowledgeable agents, inspectors, lenders, and other professionals in their market who will. An agent who has spent time cultivating relationships in a market will know (and be able to utilize) experienced mortgage brokers, home inspectors, contractors, and real estate attorneys to serve their clients. Depending on what a certain transaction or client demands, or needs, an agent can provide access to the right person at the right time for their clients. Such connections expedite the sale/purchase process and provide clients with trusted professionals to accomplish their goals. At any point where a need arises that an agent is not equipped nor able to handle, that agent can rely on the other professionals in their Professional Network to finalize the transaction.
Another element worth considering adding to your Value Proposition is: Participating in or Subscribing to the Multiple Listing Service (“MLS”). As most people in the real estate industry know, the MLS is a database used by brokers and agents to share information concerning properties for sale. It provides a “one-stop-shop” where subscribers and participants can post and obtain detailed information about properties for sale in a market and search for properties that match their clients’ needs. Like the advantage a strong Professional Network brings in helping an agent find the right professional to help their client at the right time, Participating and Subscribing to the MLS allows agents and brokers to match their clients to the right property at the right time, and to do so efficiently. It centralizes the information about properties in a given market and allows for time efficient searching. By utilizing the MLS, agents and brokers can comprehensively search for properties that are a good match for their clients while maximizing their time through doing so efficiently.
While all of this is well and good for the Value Proposition of individual agents, what is the Value Proposition for real estate associations? When it comes to real estate associations, much of the value they add comes from the institutional strengths and advantages of having a single organization dedicated to supporting and seeking the interests of its members as a whole.
For instance, REALTOR® associations add value by Educating its members. As any real estate agent who has joined an association knows, associations offer continuing education to its members that helps them stay on top of (and ahead of) industry developments and changes. Armed with this education, REALTORS® can then take what was learned and add it to their Legal Market Expertise to help their clients. Examples of this would be continuing education classes or providing access to literature, such as this article. Associations serve a key role in providing tools and knowledge for individual agents’ professional and personal development.
Associations also serve an important role in Advocacy. Because associations are composed of thousands of members and can pool the resources and skills of those members, they are able to influence policy and serve as advocates for REALTORS® and consumers alike. This translates into the association being able to help shape and impact the law and policy making process. Many times, it is the associations who are speaking directly with legislatures and lawmakers and informing them of how changes to the law will impact the day-to-day practice of REALTORS® and consumers.
Further, when it comes to the Advocacy Value Proposition, associations often serve as transmitters of real estate law and policy. For example, the California Association of REALTORS® (“C.A.R.”) regularly publishes and updates legal forms and documents for its members to use. Each form and document is updated on a regular basis to match the most current iterations of California real estate law as handed down by the Legislature. Effectively, the associations “transmit” the legal and policy changes taking place at the legislative level to its members through maintaining forms and then educating its members about the practical significance of such changes. Here, the Value Proposition for Advocacy is that when a consumer uses an agent who is a member of an association, they can be confident any transaction they engage in will comply with the most recent requirements of the law and ethical standards.
Further, membership in an association carries with it another value building tool when it comes to ethical responsibility. Namely, to be a member of an association, most associations (such as C.A.R. or the National Association of REALTORS® (“NAR”)), the members are bound to Adhere to a Code of Ethics that C.A.R. and NAR. propagate. Membership in these associations, is based on part, on the real estate agent agreeing to be bound by and comply with the respective Code of Ethics. In terms of the Value Proposition, when a buyer or seller uses an agent who is a member of an association, they can be confident the agent will be adhering to clearly defined ethical standards and they will have an agent who prioritizes protecting their clients as required under the respective codes. For example, Article 1 of the NAR code reads: “When representing a buyer, seller, tenant, or other client as an agent, REALTORS® pledge themselves to promote the interests of their client.” (CODE OF ETHICS AND STANDARDS OF PRACTICE OF THE NATIONAL ASSOCIATION OF REALTORS®, NAR, 2023-coe-standards-of-practice-2022-12-28.pdf (nar.realtor).) As a member of an association, your Value Proposition is enhanced because you are bound to seek the best interests of your client over and above any of your own personal interests.
While the industry faces many concerns related to technology and competition, real estate agents remain irreplaceable due to their Local Market Expertise, Negotiation Skills, their ability to smoothly Guide the Process, their Professional Networks, and through Participating and Subscribing to the MLS. Further, associations (and REALTORS® who are members of them) bring value to consumers because they help set industry standards and influence real estate policy as Advocates. Associations also serve an essential function in increasing REALTORS®’ market knowledge and expertise through continually offering Education while also serving as an important ethical anchor by providing and enforcing a Code of Ethics all its members must abide by. As transmitters of policy, associations also ensure their members maintain and uphold the highest legal and ethical standards by providing them with the most up-to-date resources that comply with the law.
To bring value to your clients, you need to understand what your value is. So, what is your Value Proposition? What else would you add to this article?
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