- The Washington Times - Thursday, October 13, 2005

The real estate company that offers only sales support and consulting for consumers is a company that will have a difficult time competing in the future real estate industry, according to a study from Clareity Consulting in Scottsdale, Ariz.

The age of one-stop shopping for real estate has arrived.

“With margins becoming tighter in the real estate brokerage community, the revenue and consequent profitability derived from the brokerage fee alone will be insufficient to remain in business,” Clareity reports in its study “Broker’s Survival Guide: Building Ancillary Relationships.”

Clareity provides a wide variety of services to multiple listing services (MLS), real estate associations, brokers, franchises, and software and service companies that serve the residential real estate market. The company has been in business since 1996, when MLS executive Gregg Larson co-founded Clareity after working with some of the country’s largest MLS providers.

“Broker’s Survival Guide,” one of several reports the firm has issued on the topic of ancillary services, speaks volumes about the evolution of the American real estate brokerage firm.

“Brokers’ overarching strategy must include deriving revenue from the attendant ancillary business, inclusive of: mortgage, title, home protection, etc.,” the report says. “Creating partnerships, joint ventures, and/or marketing agreements with select service providers, supported by the resources of the brokerage company, will prove to be evermore imperative to retain profitability margins, business growth, and even survival.”

Fortunately for real estate companies, the harried pace of life makes this kind of shift toward greater service desirable. The National Association of Realtors released a study years ago that found a majority of consumers willing to pay more for services provided by one source because of the convenience.

Clareity’s “Broker’s Survival Guide” quotes Steve Murray, co-editor of the industry newsletter RealTrends as saying, “Without ancillary businesses like mortgage and title, many big companies would shut their doors.”

Mr. Murray also points to study findings that indicate that most of the time, when an agent makes a recommendation on which vendor to use, the consumer will follow that recommendation.

The one-stop-shopping concept isn’t limited to real estate, of course. Just take a look at the local grocery store. All in one stop, you will find groceries, but also photography supplies and services, pharmaceuticals and now banking services.

Online, the concept is even more prevalent. Large retailers join forces to sell services and/or products created by other companies. For instance, the Swedish furniture manufacturer Ikea makes affordable furniture, not kitchen appliances. On the Ikea Web site, though, you not only can purchase kitchen cabinets and order installation, you also can purchase kitchen appliances from another company. All of the items are delivered by yet a third company, arranged via forms on the Web site.

Travel sites, too, regularly tout airline, train, cruise line, auto rental and hotel accommodations on the same Web page. Sitting in the same chair, clicking on the same mouse, the consumer willingly trades wider choice for the convenience of getting the job done all at one stroke.

One-stop shopping in real estate is also making it easier for the consumer to get through the transaction.

When you get a house through your local Realtor, often you also get access to mortgage, title insurance, home warranties and other services that formerly required shopping at several companies.

Now, a select few offer these services. It appears that in the future, only the companies that offer one-stop shopping will remain in business.

M. Anthony Carr is the author of “Real Estate Investing Made Simple.” Post questions or comments at his Web log (https://commonsenserealestate.blogspot.com).


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