According to eMarketer, global ad spending is predicted to reach $583.91 billion in 2017, with digital ads making up about 38% of that total. Unfortunately, most of those ad dollars will go to waste – never reaching their intended and most relevant audience, and thus offering no return on investment.
The challenge that every marketer faces is how to best engage and delight consumers so they eventually become customers and brand enthusiasts. We may be living in the digital world, but the landscape is overly crowded with messaging — that’s why is critical to filter out the “noise” and strategically target consumers who are most likely to do business with you.
The good news for real estate professionals looking to grow their business, the majority of your potential customers are located in a hyper-local geographical area, which may be comprised of one or several adjacent zip codes.
If you know where your prospects are — you’re halfway there.
Now, you need to find a way to communicate to them directly in a manner that is relevant to your business offerings. What are the best media channels to employ?
Once dominant and today vastly overlooked — local print. Better yet, local print that is targeted to a specific audience that creates content and engagement around their specific needs. We’re not talking about general interest lifestyle content, we’re talking about hyper-focused content and media that acts as a magnet that attracts and creates high engagement around a singular conversation.
Image this conversation being local real estate? 100% local real estate.
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Now imagine if you could leverage that conversation and communicate directly to that specific real estate audience with a set frequency that optimizes engagement with your brand, creates local mind-share and keeps you top of mind when these consumers are most likely to transact real estate. Add targeted digital ad campaigns like Facebook & Google and deploy them cross-platform (mobile, tablet, video, email, search, display) and now you’ve created a true 360˙ marketing platform that is truly micro and turbocharged to create maximum exposure and velocity for your marketing.
No — that’s why DIGS exist.
Learn how to leverage micro market media and create macro results for your brand.
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Wall Street has always been on the hunt for new and innovative ways to maximize returns on investment. Some turned out great, others not so great.
Ten years ago, it was subprime mortgages and mortgage backed securities, which led to the meltdown in 2008, which subsequently triggered the eventual $7 trillion dollar Wall Street bailout by the U.S. government.
Today, Wall Street is investing in the U.S. market again but this time it’s buying up homes. Since the mortgage meltdown and housing crash caused millions of Americans to lose their homes, institutional investors such as Blackstone, America Homes 4 Rent, and Colony Starwood Homes have purchased tens of thousands of these homes and converted them into rentals.
With new technology and cloud platforms to automate and streamline the way distributed assets can be managed, investment banks, private-equity firms, and hedge funds have found new ways to increase margins across the board. They look at these purchases not as homes, but as assets that can deliver a high rate of return.
As institutional investors leverage technology to become the largest buyers of most Americans’ biggest asset, they become the new iBuyers and could influence prices and terms under which homebuyers and sellers transact, including commission rates.
The iBuyer trend has just begun, but it will no doubt change the game in real estate. The “big money” always bets on technology to disrupt industries and make them “more efficient,” which is code for squeezing out more profit.
Drawing on institutional capital, iBuyers use technology to make quick offers on homes, close in just days, and either rent or flip them. New platforms are already up and running, with Opendoor, OfferPad, and the industry’s newest and most controversial, Zillow Instant Offers.
This new disruptive business model has the potential to make the housing market “more efficient,” – again code word for capturing generous fees. iBuyers use technology to offer homeowners a fast and guaranteed sale at purported “market value,” all for a flat service fee of between 6 – 13%.
Two of the industry’s leading iBuyers, Opendoor and Offerpad, currently operated in a few markets but plan on expanding quickly in the next 18 months. In Phoenix, the two companies have closed more than 600 transactions in the first quarter of 2017, accounting for almost 3% of total sales, according to Attom Data Solutions.
The transformation of the real estate industry is also attracting top talent in the technology space, as demonstrated by Opendoor’s recent hiring of Uber’s head of finance, as well as two former Amazon executives that will serve in key roles. Gautam Gupta, who heads up finance at Uber, but plans to leave in July, will serve as Opendoor’s COO, where he’ll focus on scaling operations and opening new markets.
“Opendoor has the opportunity to transform how people buy and sell homes much like ridesharing has transformed how people get around,” Gupta stated.
First, Wall Street is getting into the real estate business – leveraging its vast resources and might expedite the disruption. Second, the big money is now really zeroing in on the “direct to consumer” model as the ultimate model to make the home selling process more efficient.
Redfin, the Seattle based online brokerage has filed for an IPO with the Securities and Exchange Commission with its initial public offering priced at $100 million. In the filing, Redfin also announced it was testing Redfin Now, a new service in which Redfin buys homes directly from sellers and resells them to buyers. The company will test Redfin Now in two markets to start – the Inland Empire and San Diego California.
Redfin’s new program allows homeowners to sell a property to Redfin for as little as 7 percent commission. Homeowners will be able to view an immediate offer range on Redfin Now’s website and if they choose to request a formal offer, Redfin will send a representative to inspect the home and then submit a binding offer within 24 hours.
Accelerating the new iBuyer transformation is real estate giant Zillow, which just entered the picture a few weeks ago. Zillow launched a pilot program in two cities – Las Vegas and Orlando, Florida with the promise that a home sale can be completed in less than a week. Called “Zillow Instant Offers,” this new service allows home sellers to receive all-cash offers from a hand-selected group of 15 private investors.
Zillow, real estate industry’s chief disruptor, looks like it’s jumping into the iBuyer game, and leveraging its multi-billion dollar market capitalization and consumer brand to offer a radical new business model for home sellers. With Opendoor and Offerpad leading the charge and quickly gaining momentum in the space, Zillow really has no choice but to try and take the lead for fear of being disrupted itself.
With a market cap of $8 billion dollars and still losing money, Zillow can’t grow its advertising driven model fast enough to appease Wall Street. The fear amongst REALTORS and the industry at large has always been that Zillow is gearing up to “flip the switch,” and become a full service brokerage – which they have always adamantly denied. But ultimately, they may have no choice.
It appears Amazon is jumping into the real estate space as well. A “Hire a Realtor” placeholder page, (which debuted briefly and has already been removed,) suggests the internet behemoth will add real estate agents to its professional services marketplace. If the marketplace works for agents like it does for other professionals, then agents would pay referral fees to Amazon in exchange for new business.
Where this leads nobody knows, but with Amazon’s scale and clout in the product space, one could only imagine the possibilities here.
In 2011, $186 million was spent on real estate tech applications. Fast-forward to 2016 and that number has ballooned to $2.7 billion.
At the end of the day, technology is going to change every aspect of buying, selling, and managing real estate.
According to the National Association of Realtors 2016 Profile of Home Buyers and Sellers, 88% of buyers purchased their home through a real estate agent or broker – a share that has steadily increased from 69% in 2001.
It will be interesting to watch the convergence of America’s continued and growing dependence on the expertise of real estate agents and the accelerating advancement of technology.
The National Association of Realtors, (NAR) estimated that the aggregate value of existing U.S. home sales was approximately $1.5 trillion in 2016 from approximately 5.5 million total transactions. It is estimated that consumers
paid more than $75 billion in commissions in 2016 for these transactions.
The residential brokerage industry remains highly fragmented, with an estimated 2 million active licensed agents and over 86,000 real estate brokers in the U.S.
Over one-third of middle-class consumer spending is on the home, so it’s no wonder the “big money” is betting on the real estate industry’s continued disruption – there’s money to be made. One thing is for sure, that technology will continue to play a larger role in the real estate transaction, and the direct to consumer momentum will continue to gather steam. Where this ends up, nobody knows.
But don’t plan on real estate agents becoming extinct any time soon. The size, complexity, and legality of buying and selling million plus dollar assets warrants seasoned, professional representation. Additionally, “off market, not listed on the MLS” deals represent over 20% of home sales in some markets, and you can’t access these without tapping into an agent’s local network.
Finally, buying anything is a highly emotional decision. The bigger the price, the more emotional it gets. Agents serve this purpose well, by acting as personal caretakers during the transaction process – something technology can’t do at the moment.
We’re truly living in a “wild west” real estate world today, and it’s only going to get more interesting moving forward. So sit back, fasten your seat belts, and get ready for the ride.
firstname.lastname@example.org | 310.373.0142 x2461
As told to Wendy Bowman
Yvonne Arias regularly turns over millions of dollars in real estate. She works with a variety of clients and in the past six years has earned a reputation as a specialist in hotel residences, emerging as the most successful broker to date at The Ritz-Carlton Residences at LA Live and The W Residences in Hollywood. Arias’ in-depth knowledge of the city’s rental market, property management, marketing and interior design has made her a valued resource as a consultant for real estate developers and investors.
She also sells and leases high-end homes throughout L.A. DIGS talked with the founder and CEO of The Property Lab (ThePropertyLabre.com)—an upscale boutique real estate brokerage firm headquartered at The Ritz-Carlton Residences at LA Live—to find out how she got into real estate, the decision to focus on high-end hotel properties, the perks of living at these dwellings and more.
Where did you grow up and how did you wind up in L.A.?
I moved around a lot as a kid. After earning a bachelor’s degree, I came to Los Angeles, as that seemed to be where you could really go after success.
When and how did you decide on a career in real estate? Have you always wanted to be a Realtor?
I was going after a really tough career pursuing acting. Although exciting in the beginning, I was ready for something new. I wanted a different career path and became interested in investing in a property, particularly something residential. So, I decided to pursue my real estate license. It was one of the best decisions I ever made.
Discuss your real estate focus now and what made you venture into this area.
I’m known as a specialist with hotel residences and also known as a leasing expert. One of my mentors, who is a very successful real estate broker in L.A., started with leasing and I followed in his footsteps. He gave me my first lease listing at The Ritz-Carlton Residences at LA Live, and I’ll always be grateful to him for that.
What does being a hotel resident expert entail?
It’s a pretty uncommon niche, as there are only a few hotel residences in Los Angeles. I happen to have had a great deal of success at both The Ritz-Carlton Residences at LA Live and also The Residences at W Hollywood. It entails having the clientele who are seeking this type of living arrangement, and also knowing the product well. Since these properties are so expensive, prospects expect you not only to know a lot about the particular property you’re selling, but also about competing properties.
Are condo hotel properties a good investment right now?
I am seeing more and more popping up all over the world. Here in Los Angeles, the Four Seasons Private Residences in Beverly Hills is currently underway. These properties seem to be a good investment, as there aren’t many of them, and this makes them more exclusive. Not only that, they’re all five-star properties, so they have that added attraction as well.
What is your no. 1 tip for someone looking to buy a luxury condo in L.A.?
Don’t wing it. Work with an expert who can offer you the proper guidance.
What do you love about selling hotel properties?
They’re such gorgeous, prized properties and really are the stars of their area. The Ritz is the star in Downtown, and the W is the star in Hollywood. I feel lucky to be doing business at these buildings.
What’s the most beautiful/exclusive space you’ve ever sold?
What comes to mind is a stunning, three-level home in Malibu that was featured in the film Sex and the City 2. This was a jaw-dropping oceanfront property for one of my favorite clients.
Tell me about some of the properties you have in your inventory right now.
One of my favorites is a designer-furnished condo on the 45th floor at The Ritz-Carlton Residences at LA Live for just under $4 million. It’s a huge, three-bedroom home that features massive windows offering a view of downtown skyscrapers, nearby mountain ranges and the bustling city. Another perk: The owner is including all of the furnishings, which makes moving easier for the lucky new resident.
What makes for the perfect residential hotel space?
The justification of hotel residence living is about the services and amenities. A hotel property should offer the owner and their guests an ease of living.
What services/amenities are people seeking when purchasing a hotel residence?
A recent client was interested in a helicopter pad. This potential buyer wanted to be sure he could be ahead of the game with L.A. traffic. Other than that, most people want to feel that sense of security that is offered in a five-star building. The presence of a 24-hour staff offers peace of mind to a lot of residents.
To what do you attribute your success at The Ritz-Carlton Residences at LA Live and The W Residences in Hollywood?
Some great people who introduced me to these buildings, and I definitely thank the powers that be. I’m really grateful for the number of transactions I’ve done at these buildings during the past six years.
What is your take on the revitalization of Downtown Los Angeles; how has it evolved and what new developments are you seeing?
It’s changing right before our eyes. Right now, I’m watching the new Oceanwide Plaza and Circa projects going up along Figueroa Avenue. I can’t wait to see the finished products.
Do you have any advice for breaking into the L.A. real estate market?
The market is hot right now; be prepared to compete.
If you weren’t working in real estate, what would you like to be doing?
I think I’d be a pretty good chef. When I’m not working, I love to cook. I’m still not ruling that out.
What does the future hold for you?
I’m not sure, but I bet it’s going to be great.