It’s fair to say that almost everyone living in a home today worked with a real estate professional to purchase or mortgage their home. Historically, though, professionals let their clients go after the transaction is complete rather than building a moat around the client that assures future transactions. The newest prop tech applications to moat the client relationship are home management tools.
According to the latest data from Altos Research, the real estate market is experiencing unusual patterns in pricing, inventory and demand. The data shows that home prices have held steady even in an environment with higher mortgage rates, in large part because inventory continues to be at near record low levels. This has created a competitive market where buyers are struggling to find suitable properties, leading to increased competition and few bargains.
In such a market, homeowners are more likely to stay in their homes for longer periods, unless compelled to move due to life-related reasons. This trend has important implications for real estate and mortgage professionals, who need to adapt their customer experience strategies accordingly. It is crucial to focus on capturing the business that exists in this market in the near term while also planting seeds with clients that will yield long-term rewards. Helping homeowners monitor the value of their home, access maintenance and remodel services, monitor mortgage rates, and other tools deepen the relationship between the homeowner and real estate professional.
Milestones CEO Dustin Gray emphasizes the importance of investing in relationships and playing the long game in this market. Whether you’re on the brokerage or lending side, offering clients something that aligns with today’s narrative is key. This involves helping homeowners maximize the value of their current homes while being readily available to assist with borrowing money or facilitating a move when the need arises.
Strategies for Success
Embracing the homeowner opportunity is crucial for real estate professionals in the current market. Over the past decade, the industry has primarily focused on optimizing and monetizing transactions. While this approach has no doubt generated considerable revenue, it has often led to a lack of repeat business, with the typical Realtor earning only 16% of their income from repeat clients.
Dustin Gray believes that the future of real estate and mortgage lies with the homeowner and the home itself. Research indicates that 90% of homeowners underestimate the costs of homeownership. In a transaction-focused industry, this data may seem insignificant, but in a homeowner-focused industry, it represents a substantial opportunity.
To stay ahead of the competition and capitalize on the homeowner opportunity, real estate professionals can adopt the following strategies:
- Meet customers where they are: living in their home. Focus on providing value to homeowners by helping them make ROI-positive remodeling choices for equity growth, assisting younger family members with building credit and saving for future homeownership, or connecting them with trusted home service providers. Building trust and solving problems between transactions demonstrates a commitment to the long game, and shows you’re not just a transaction agent.
- Offer bundled services options. National portals and direct-to-consumer lenders are increasingly bundling services to create a seamless digital experience for customers. While many real estate businesses already offer ancillary services (e.g. mortgage, title, insurance, warranty) they are typically siloed and rely heavily on agents to promote them. Milestones brings all of these services under one roof and keeps them front and center for consumers and homeowners. By doing so, companies can increase their capture rate and prevent clients from being lured away by competitors.
- Give customers one place to manage their home. Milestones is an experience that homeowners want to continually visit because it provides value and educates them. By offering homeowners a centralized platform to manage their home and home-related wealth, real estate professionals can create a valuable touchpoint for regular interactions and foster customer loyalty.
- Redefine your value proposition as a trusted advisor. Instead of solely focusing on transactions, real estate professionals should position themselves as trusted advisors who assist homeowners in making informed decisions and building wealth from their homes. This long-term approach goes beyond the closing table and establishes a strong database of homeowners for repeat business and referrals.
- Evolve the technology stack. Traditional real estate technology stacks have primarily focused on transaction outcomes. However, with homeowner management technology, businesses can shift their focus to homeowner outcomes. By leveraging data and AI, real estate professionals can gain insights into the true value of their past client portfolio, forecast future buyers and sellers, and create revenue opportunities for core services in between transactions.
The current housing market presents a unique opportunity for real estate and mortgage professionals to invest in relationships, play the long game and provide homeowners with an exceptional experience. Milestones provides a solution that enables companies to scale their ability to build trust, solve problems, bundle services and deliver value to homeowners beyond the transaction. This reduces customer acquisition costs and the need for constant top-of-funnel marketing strategies, while capturing more near-term revenue and planting seeds for growth. Moating the customers that you already have is the strongest opportunity for growth in today’s competitive market.