Beyond the realm of common sense: Social Media Helping Real Estate Agents Defy Commoditization

May

2

Social Media Helping Real Estate Agents Defy Commoditization

Filed Under News, Real Estate Marketing, Web Marketing

A commodity is any product or service for which there is demand, but for which there is no perceived qualitative difference between that which you offer and that which your competitors offer.

Its market price is determined solely by supply and demand.

With commodities, e.g., electronics or metals, consumers are as likely to buy from your competitors as they are to buy from you and will choose randomly among the lowest priced offerings available to them.

What is Commoditization?

Commoditization or commodifying is the transformation of a product or service into a commodity by external influences such as a commodities exchange or the growing virtual marketplace on the Internet.

Haven’t you yourself ever compared offerings for a product on the web and purchased the one with the lowest price? You used to shop for this product at a neighborhood merchant, but now you tend to shop around for it online.

Commoditization prevents a product or service from standing out and places downward pressure on its price.

Commoditization in Real Estate

While real estate itself is far from being a commodity, the agents who sell real estate, especially residential real estate, are losing their competitive differentiation in the market.

I attended REMarTech in New York City this past week. The conference was marvelously organized and presented by Ryan Slack and Green Pearl Events. If you’re in real estate, you ought to join the Green Pearl social network on Ning.

I met lots of interesting people at REMarTech and learned some important facts about real estate sales and marketing, as well.

I learned that real estate brokers and agents are no longer the main sources of information about real estate properties and property listings. Buyers readily obtain detailed property information and listings using online services like Zillow, Trulia and StreetEasy, each represented at the REMarTech event.

As a result, the real estate broker listing a particular property is more likely now than in the past to end up splitting the commission for the sale of that property with a competitor.

How Social Media Helps Real Estate Agents

A recurring theme at REMarTech was that blogging, social networking sites, and mobile apps help real estate agents convey to potential buyers and sellers the agent’s depth of knowledge and active involvement in the neighborhood he or she represents.

A number of real estate agents use foursquare to check in and take a stand in their respective neighborhoods.

One speaker reported being the mayor of all the buildings he represents. If you wanted to sell your apartment, wouldn’t you think that perhaps the mayor of your building would be the best person to sell it?

REMarTech Takeaways

I can report to you that leaders of major real estate companies, such as Fred Peters of Warburg Realty, Diane Ramirez of Halstead Property and Jacky Teplitzky of Prudential Douglas Elliman, have already adopted social media within their organizations.

A typical real estate broker or agent has limited social media know-how but wants to acquire the knowledge and skills needed to succeed.

Fortunately, Green Pearl Events, organizer of REMarTech, is eager to help early adopters to adapt — and so is, of course, yours truly.

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Tags: Ning, Ning social network, real estate agents, Real Estate Marketing, Social Media
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4 Responses to “Social Media Helping Real Estate Agents Defy Commoditization”

relationshipsellingbuffs on May 2nd, 2010 7:16 pm

Wow. This was very interesting. I had no knowledge of commoditization before I read this article. Without the ability to “stand out” from the crowd with our product/service, it makes it extremely difficult to get an edge on our competitors, especially when it is so readily available on the Internet. Your idea of social media to “gain” that edge is spot on. People buy from people they know, like and trust. That never changes, so taking that angle and turning lemons into lemonade is a fabulous idea. Enjoyed this article.

Welkin Capital Group on May 2nd, 2010 8:45 pm

As is always the case when I read your blog, I thought you did an excellent job extolling the virtues of how real estate agents use social media to help their services stand out in a market dominated by commodity products.

And since I was also at the REMarTech conference, I wanted add that, like you, I thought it was one of the better run conferences. Too often social media experts and conferences don’t cover the practical aspects of how you can apply SM to your daily job, whatever it is.

I disagree slightly with your statement.

Commoditization does encourage consumers to use price as the sole determinant for purchase, but commoditization, itself, does not prevent a product or service from standing out, lack of branding causes that.

Jack Goldenberg

David Alexander on May 2nd, 2010 9:06 pm

Nice article, Larry. As the previous comment indicated, relationships will NEVER be a commodity, so social media in that environment comes into even more of a central importance.

Larry Brauner on May 2nd, 2010 9:09 pm

Hi Jack,

The only problem with disagreeing with me here Jack is that a true commodity by definition is not subject to branding. That’s precisely what makes it a commodity.

Therefore, to the extent that something is commoditized, it itself cannot be branded, even if its vendor can be.

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