For the real estate niche, similar to any other industry, it is crucial to understand who is your target audience, how it behaves and what are they looking for from real estate professionals.
However, it might be challenging for realtors to conduct a comprehensive study asking the most important questions, surveying several hundred respondents (aka their target audience) and creating actionable items out of this research.
That is why the DESA NINJA research team has conducted market research with over a thousand respondents across the U.S. with just one simple question in mind – how do potential homeowners and home buyers search for and select a real estate agent to help with their transaction?
We will keep these insights short and sweet to not overload you with tons of raw information – you will be able to find more data at the very bottom of this article.
Do people still need real estate agents for property transactions?
Access to a variety of comprehensive tools and an abundance of free information made some people question real estate commissions and even the need for real estate agent services. Therefore, we see a rise in flat fee real estate brokerages and online platforms that aim to exclude real estate agents from the transactions.
We need to understand what type of transactions people still need help with.
Most of the respondents are equally interested in hiring real estate agents for buying and selling. There is also some strong interest in getting agents’ help for renting services.
Despite access to all free tools and information online only 11% of respondents are willing to do everything themselves.
The positive sign is that people don’t feel forced by the market to use real estate services.
The psychological aspect plays a big role in real estate transactions therefore even educated and prepared customers will need some guidance from someone who has done real estate transactions many times.
How much commission it is fair to pay?
We figured out that real estate services are still in great demand, but the next question is how much commission people feel it’s reasonable to pay for such services.
We asked two separate questions for Selling and Buying transactions because we anticipated that numbers might be different.
From the two charts, we can clearly see that 1-2.5% commission is the most popular answer. Surprisingly enough, the second most popular option is 2.5-4%.
R/E Commission range
It shows us that on top of the strong demand for Real Estate Services the majority of customers are willing to pay anywhere between 1-4%, it will depend on the area you serve and average home prices in that region.
Flat fee services
There’s a decent portion of the market who want flat fee services but it doesn’t seem threatening for those agents who still want to charge a percentage on deals.
Nonetheless, 18% and 15% for buying and selling respectively are numbers that make it an emerging market for brokerages who want to build their value proposition around lower commission fees.
How do people search for realtors?
It is crucial to understand where your potential client is present as it will help to develop the right strategy and spend the marketing budget on the platforms that matter the most.
Aside from asking a friend (which is obviously the most popular option), a majority of customers use Google search to find a realtor.
Less than 3% use YouTube, Instagram, Facebook, Print media, and Google My Business to find a real estate agent.
Do people interview multiple real estate agents?
Another interesting insight was to know if buyers and sellers are interviewing several realtors before making a decision and how it is interconnected with real estate ads.
Over 65% of respondents confirmed that they interview multiple agents before hiring.
Not to mention, 52% of participants click on the ads to find more information about the agent.
We need to proactively show up in front of people to have this chance to be interviewed, therefore advertising is a must in the long-term real estate game.
Since people whether they are interested in clicking on relevant ads to learn more, it is clear that your potential clients find ads beneficial and are willing to click on them to get more information about the offer mentioned in the ad.
Real Estate ads can capture people’s interest. Platforms such as Facebook, Instagram, and Google should be used to grow a pool of potential customers.
What’s important when choosing a realtor
It is important to understand what resonates with your potential clients the most and therefore, focus on tactics that bring the most results.
For over 70% of respondents, the key factor when selecting a real estate agent is having client testimonials.
Whereas, over 50% are looking for social media content that demonstrates realtors’ expertise and market knowledge.
Credibility online is the key factor for your potential clients. Social media presence and online reviews have the most influence on clients’ decisions.
Google My Business and ranking websites are the main sources home sellers and buyers use to check real estate agents’ credibility.
We suggest having an automated system in place where your past clients are encouraged to leave reviews for a small incentive such as a gift card.
In addition, keep in mind that your Social Media profile is your online business card.
Create unique content that demonstrates your experience and expertise. Do not just create random content – make sure you understand your target audience and what they are interested in. Whether it is pre-construction, investment or families looking to upgrade their home. And then, create content around these topics.
What social media content you should post
Considering that content (the insight above) is one of the second most important factors after reviews, we asked if home buyers and sellers trust realtors more if they are active on social media.
Over 50% of respondents have confirmed that if the realtor has an up-to-date social media profile he/she is active, which gives them more confidentiality.
With that being said, it is not enough just to have social media profiles – you need to be active on them. Therefore we suggest you limit yourself to one or two social media platforms. Choose the ones you think are more relevant to your audience. In general, Instagram and Facebook are the two most popular social media.
Let’s assume, you decided to create Instagram and Facebook pages. What is the best content to post there? It is important to highlight that people are interested in a broad content mix. The majority of people expressed interest in listing updates, educational content, market trends and local community discussions.
Research key takeaways
- The psychological aspect plays a big role in real estate transactions therefore even educated and prepared customers will need some guidance from someone who has done real estate transactions many times.
- The majority of customers are willing to pay anywhere between 1-4%, it will depend on the area you serve and average home prices in that region.
- Approximately 18% of the market expects flat fee services.
- Online credibility is the key factor for your potential clients.
- Social media presence and online reviews have the most influence on clients’ decisions.
- Listings and educational content are the main pillars of your content strategy
- Google is the main platform to gather online reviews