5 Great Nuggets from Inman

I gauge the quality of conferences I attend by the number of "nuggets" I take home. Nuggets may be pearls of wisdom, new knowledge, or insights that help me and my business. This week was the Inman conference, attended by lots of technology-savvy agents and brokers, and all the players in the Internet real estate biz. Here are my top nuggets from the week (in no particular order):

1. "Technology won't replace agents. Agents with technology will replace agents." This great quote, by Burke Smith of Prudential California Realty, really nails it. The shifting advantage is clear. The agents gaining share are those investing smartly in technology - be it a online real estate marketing tools, lead generation systems, Blackberries for fast response to leads, blogging to build the community, or search engine optimization.
2. The top producers typically aren't yet spending their marketing dollars on line. Burke's corollary. The top producers in a particular area have been doing this for decades and their entrenched processes continue to work. So they have only lightly embraced the Internet's power to make the real estate
   process marvelous for their clients. With all the innovation happening
   in the marketplace right now, we're at the critical point for the
   early adopters of that technology to grow and solidify their leadership position for
   the next few decades.
3. The largest brokerage in the world, Remax, spends $60 million marketing nationally, another $60 million marketing regionally. Remax agents spend $1.5 billion each year marketing locally. That's over $15,000 per year average. Remax is about 7% of this business. You can finish the math...
4. The 6% commission myth hurts agents-because in many cases it's too low! Everyone knows that the typical sales commission is 6%. Most of the knee-jerk reaction is that this must be too much. What value do agents add, after all? In my opinion, the good ones add a lot of value (and the lousy ones? well, there you go...). But because this number is perceived as fixed and colluded upon, Realtors are under fire. The conference had a session titled, "Defending your commission" which appeared to be well attended. Mike Arrington kicked off the conference with a moderately incendiary presentation about why this business is so screwed up and one of his key points was the 6% number. But Mike made an off-hand comment which was particularly insightful (and I think lost on the crowd of grumbling agents): If that number were more fluid, why shouldn't an agent negotiate a kicker if the client's major goal is met? If you hire an agent to sell your home quickly, and they come through for you, don't they deserve a bonus? Food for thought...
5. The last one is a point made by Rich Barton of Zillow. When you come to the pot luck, bring more than a fork. That means giving stuff back to the community. For Zillow, they announced opening their API. Trulia announced a maps-for-your-website offering. Altos Research, by the way, lets you drop a real-time real estate price chart on to your site. (And if you join our affiliate program, we'll even pay you for referrals!)
6. Bonus! The lead generation business is NUTS and it's going to get nuttier! I counted at least a dozen internet firms trying to sell leads to agents. (There are dozens more who were not in attendance). Some go for high volume, low quality. Some are trying to add filtering and quality assurances with sites that cater exclusively to agent seekers. This quality filter is in my opinion the critical component to bring the slimy-reputation of the business into a respectable enterprise. More on this topic in later posts...