In 22 years as a real estate agent, Nick Bailey has seen the changes in the brokerage industry from a host of different angles.
He's been an agent, a broker-owner, a franchiser, and a technology executive who worked with real estate brokers. He's watched the business evolve, as technology and especially the internet has revolutionized how information is made available, and how it's used. And he's considered what that means for him and others in the field.
Less than two years ago, he took on a new role as CEO of New Jersey-based Century 21 Real Estate – the world's biggest residential real estate sales company. He unveiled a bold rebranding of the company last spring, with ambitious goals and a vision for growth.
On Jan. 7, Bailey announced he was stepping down as CEO of Century 21 for family reasons, to return to Colorado with his wife and two children instead of dealing with the rigorous travel schedule he had been keeping. He will remain a consultant for Century 21 until March 1, to help with the transition to a new CEO.
Bailey has visited Buffalo twice in recent years, once in his previous job at real estate technology company Zillow Group, and once late last year as Century 21's leader, when The Buffalo News spoke to him about the industry.
Buffalo News: What appealed to you about taking the helm of Century 21?
Nick Bailey: The industry is really noisy right now for real estate agents and brokers. You have technology companies and with a healthy real estate market, you have a lot of startups, and new models, and what’s happening online with consumer behavior.
There are a couple of things driving this confusion or what I coin "noise" in the industry. You have real estate professionals saying, is the internet going to take my job, like travel agents? But it’s not at all the same. I believe today that the most crucial and important part of a real estate transaction, today and will be continuing in my lifetime in this business, is the real estate agent, as a trusted adviser.
There are differences in consumer behavior, in how they get data, receive data, participate in the transaction, etc. But the number of consumers using a real estate professional today is higher than it’s ever been in the last three decades, and the No. 1 demographic that is using agents more is millennials – over 90 percent.
I have an interesting background. I’ve been licensed for 22 years, I’m still licensed. I’ve been an agent, I’ve been a broker, I’ve been a franchiser, and I worked for a tech company to focus on the consumer. So what a great way to use all those different lenses to look through the industry and cut through some of the noise and create clarity.
BN: So what is happening?
NB: What is happening is real estate agents are being used by consumers more now than they ever have been.
What else is happening is the use of data to provide transparency to the consumer. You can find data. You can find all the information you need, but consumers are still voting and saying we want to use an agent because this is the biggest investment most people get into in their lives and they’re not going to put it in a shopping cart and hit checkout.
There are too many risks associated with putting their entire livelihood and net worth on the line to not have a trusted adviser that knows more detail than what they can just find online.
BN: Are consumers using agents differently?
NB: Here’s the No. 1 thing that has changed in the last two decades. It used to be a consumer went to an agent first and then an agent unlocked the gates to show them what houses were available. They may have seen yard signs and could engage, but it was all about the consumer went to the agent first, homes second.
The 180-degrees that’s happened in the last decade is that consumers are looking at houses first and then they go to agents second. So that order has flipped, and that’s what technology has done and it’s changing how agents engage with consumers when they’re ready or they’re not.
BN: So consumers are bypassing that step of information provider, but still using agents?
NB: Here’s how I look at it. Home search is the fun part, the sexy part, that has just dramatically blown up. There are more adults watching HGTV than kids watching Disney. So we are fascinated with real estate, as a society and as adults.
But when you go home shopping, that is real estate, and that is still a really difficult space to maneuver.
After someone’s at the closing table, 40 percent of the buyers or sellers say they’d rather have a root canal than go through buying or selling again.
So part of the mission – we completely did a rebrand this year, with a whole new image and new mission statement, to defy mediocrity and deliver extraordinary experiences.
There are low barriers of entry in our industry. Just about anyone can get a real estate license if they want to, so the level of mediocrity can exist.
The second part of that is the extraordinary experiences. Home search right now is an extraordinary experience. You can find anything for sale, get the data and comparables, and it’s a great experience. But the minute you go home shopping to close, it’s an anxiety-ridden, challenging, difficult navigation to get through that process and be successful.
And at the same time, we only have about the same number of transactions year to year. We don’t have huge swings in the number of people buying or selling annually. We do on search, but we don’t in actually closing. So what we’re trying to solve for is we can make the experience of home shopping to close extraordinary if we focus on all the components involved.
BN: So as much as millennials are tech-savvy, they’re still doing that personal touch?
NB: They’re doing a lot of research. They figure out what neighborhood they want to live in, they check out the schools and all the amenities. It used to be, two decades ago, you’d ask your Realtor what neighborhood should I live in or where should my kids go to school. But we were always taught you can’t tell them that, because you could be steering them, and that’s where Fair Housing came in.
Well, that doesn’t really exist anymore, because people can go online and they can figure out the amenities and they may want to live near a school. They can get school ratings, they can look at crime reports. They can look at all these different components around where they want to live, and once they decide, in many cases, they walk into an agent and say I want to see this house, which in most cases the house they think they want to buy is not the one they do, because there’s more to it.
But the process of making an offer, negotiating, inspections, there’s just so many variables that can go wrong in the home-buying and selling process that they leave that up to an expert.
Last year, of all homebuyers, 42 percent were first-time buyers and 78 percent were 37 years or younger. So this is uncharted space. And 61 percent were first-time home sellers.
So when you’re sitting there with your biggest investment and the vast majority are doing it for the very first time, that’s not something that you just put in your Visa number and hope it works out. And there are just components about the personal process and service that goes along with it that I don’t think can be replaced by a click of the button.
BN: Are agents doing this differently?
NB: Much of the value years ago was having the data. My value was, tell me why you are qualified, and I’ll show you what’s inside, what houses are for sale.
I’ve seen seasoned professionals that have had a real struggle with the shift, saying my value is the data that I have. And the value today is more about the service you provide as a trusted adviser throughout the home-buying or selling process. Your negotiation skills. When things go wrong, can you problem solve?
It’s an emotional decision. That’s why for-sale-by-owners have historically not worked out well, because one party gets emotional or both get emotional and it falls apart for the wrong reasons. It’s just critical you have someone working on behalf of the buyer and seller to navigate that space.
Plus, the transaction has gotten a lot more complicated in the last two decades. More disclosures, more paperwork, more regulation, getting a mortgage is different, having the appraiser selection is different. There’s a lot more regulation now, so it’s tougher to navigate.