As real estate investors, many of you outsource work on your properties to others - whether that is a general contractor, property manager, or landscaping company. In fact, an investor’s network of trusted professionals is arguably one of their most precious assets -- something they have to build up over time. But with many professionals now searchable over the internet, if an investor is lacking a contact, they can find someone simply by googling their desired industry and location -- for example, “General contractors in Raleigh, NC.”
How do you know if you can trust someone you are hiring over the internet? As Rachel Botsman explains in her 2012 TED talk: “the currency of the new economy is trust.”
The answer is simply, online reviews from previous clients. Technology has brought about a new form of capital -- that of reputation capital, which is predicated on these reviews. As we’ve seen with Uber and AirBnB and numerous other startups disrupting the way business is done, people who are connecting over the internet are actually starting to trust each other, a dynamic that has radically shifted since the start of the internet a few decades ago.
In many cases, it’s not even about the individual tradesperson being hired. It is about the wisdom of the crowd and your trust in the group of people who have used the person’s service and had a favorable experience in the past.
Online reviews are word of mouth marketing at its finest. The crowdsourced data is informing your everyday decisions.
This, of course, also includes an investor’s search for a real estate agent, if they work with one.
More and more real estate agents are building a presence online out of necessity. According to the 2014 Profile of Home Buyers and Sellers by the National Association of Realtors, 92% of home buyers searched online during the home buying process.
With all the tools at your disposal, you can now look up your real estate agent and see their reviews from past clients. You can see their website. You can see their recent sales. You can even find their social media profiles and note how they are engaging with other prospective clients and agents. Suddenly, you have gathered way more intel on your real estate agent than they probably are even aware of, all before meeting them.
Like with any other professional, an agent’s reviews are crucial to their success. Reputation capital is everything. This is a huge paradigm shift, as it means real estate professionals are doing their work with future clients in mind.
Though online reviews are at the core of customer trust, more and more emphasis is also being placed on a professional’s social profiles in order to verify their identity and qualifications. For instance, AirBnB rolled out an identity verification system a few years ago, allowing users to link their verified social media profiles (with those having no history not being accepted).
With social media providing multiple data points for companies that make it their goal to verify one’s identity (example: Trustev), activities online are also becoming the proxy for professionalism. This makes sense, considering the amount of data out there regarding patterns of behavior online. Algorithms are able to put together a “social score” that speaks to who the person behind the social profile really is… and it’s only going to get more powerful.
The next time you find a contractor or real estate agent might be online. And you will probably learn more about them in that search than you will ever think to ask in person.