Prudential Fox and Roach Realtors. In-Depth Information Service Analysis. Info 643. By James Marshall

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1 INFORMATION SERVICE ANALYSIS 1 Prudential Fox and Roach Realtors In-Depth Information Service Analysis Info 643 By James Marshall

2 INFORMATION SERVICE ANALYSIS 2 Executive Summary Prudential Fox and Roach Realtors is an independently owned and operated affiliate of Prudential Real Estate. The company consists of seventy offices located in the Delaware Valley with over 900 hundred employees and has grown to become the fourth largest real estate service in the United States with $15.5 billion in sales in Prudential Fox and Roach also employs over 3,300 independent sales agents who work on commission and form the primary information users for this study. (Andriolle et al 2006) Real estate companies face a tremendous amount of competition in their market for both listings and clients. A company that can provide better services and information will have a competitive advantage; information is key in this field as the information users are themselves information professionals. Prudential Fox and Roach already provides its agents and employees with a variety of databases and services that will give them an advantage. The primary users of this study are the real estate sales agents; their primary duties are to acquire listings and clients, provide information on listings to prospective buyers, find suitable listing matches on clients, and to remain current on market trends and environmental factors that will impact the sales market. To do so, the primary sources of information are Multiple Listings Services. (MLS) An MLS gathers listing data submitted by title companies, real estate agents, and public records which are then entered into the database for subscribed users to access. This resource provides the real estate agents with the information advantage over their clients and makes them valuable; justifying the high commission rates. An information audit showed that agents of organization have ample access to MLS that cater to listings for sales but a large portion of the local market is being ignored: the rental market. This study proposes the addition of an MLS devoted to the rental market to increase the market share of that source of income.

3 INFORMATION SERVICE ANALYSIS 3 Organization Information Prudential Fox and Roach is a leading real estate company in the Delaware valley with over seventy offices in New Jersey, Pennsylvania, and Delaware. They have over 900 employees as well as over 3,300 agents working on their behalf. Within the organization are various departments related to home ownership and similar services. The Real Estate department will be the selected unit of analysis for this paper; other departments include title insurance, property insurance, accounting, financing, information technology, and continuation programs. The mission statement of the organization is: Prudential Fox & Roach Realtors/Trident Group is an innovative, home-related services company that dominates the markets we serve. We are a powerful team dedicated to providing the highest quality service and holding ourselves to a standard of excellence. Our relationships with our clients, sales associates, employees, strategic partners and the communities we serve is built on trust and integrity. We create a positive experience and add value to all those we impact. Our professionalism is a role model for our industry and the public. (Prudential Fox and Roach 2010) Information Users The unit of analysis for this study is the real estate department agents of Prudential Fox and Roach Realtors, the primary information users are the real estate agents. The primary role of real estate agents is to match buyers and sellers of real estate, by serving as not only salesmen but as information sources. Prudential Fox and Roach is categorized as a real estate broker, the owner of the organization, while those who gather the listings and bring the sales to closing are called real estate agents. Agents are not directly employed by the company, but instead serve as independent contractors that are provided literature, computers, and offices. All real estate agents and brokers are required to take classes and then be licensed by the state, but there is no

4 INFORMATION SERVICE ANALYSIS 4 educational requirement and agents are often from many walks of life. The role of agents is in sales, and as such they are expected to generate a certain amount of income for the company, their own income is determined through commission. The broker (Prudential) is paid in commission upon the closing of a sale and they then pay out about half to the agent; commissions are generally six percent of the price at closing. (Gee 2010) The information required by the users is intended to increase the sales of their own listings as well as to find homes for their clients in order to increase profits for themselves and the organization. The agents with the best access to information will have an advantage over homeowners seeking to sell and buy without a Realtor as well as other realtors with fewer information resources. The real estate market has changed in recent years, driven by the popularity and use of the internet and online real estate websites. Many people now have turned to the internet to search for homes and property without ever stepping into a real estate office. This has forced agents to rethink the way that they do business. (Heller 1997) Agents are no longer simply salespeople, their job role has come to encompass a myriad of tasks, they have now become information professionals. A full-service real estate company can now offer a variety of services to both buyers and sellers. Prudential Fox and Roach is one such company, with their partnership with Trident Group they can also offer the services of a title company and insurance company. In addition to this, the agents are trained to not only list properties with a multiple listing service, but to advertise the house, staff open houses, find financing for buyers, streamline the settlement, find necessary vendors, provide regional and school data, and to provide references for local services such as babysitters, plumbers, electricians, and landscapers. (Andriolle et al 2006) Agents act as both seller s agents, contracting to sell a client s property, and as buyer s agents, in which they assist buyers in finding real estate that fits their needs. It is as a buyer s

5 INFORMATION SERVICE ANALYSIS 5 agent that the user requires the most information; first the agent will research property listings on an MLS and create a list of suitable properties. They would then offer advice and take the buyers on tours. Once a house has been found, they will assist in finding financing, insurance, title insurance, home inspection, appraisals. A buyer is most likely to hire an agent when they have a lack of knowledge of the area or market conditions, and so the agent must have data on these as well. (Gee 2010) The real estate agents operate in the service sector and as such any information that they will need relates directly to questions they will be asked by their clients: buyers and sellers. To perform their duties, they need to anticipate the needs and questions of their clients and have a certain degree of preparation and access to information before a meeting. The needs of the information users are information resources and tools that will be able to accurately respond to their clients questions. The services of the Realtors will contribute to the mission of Prudential Fox and Roach to provide the highest quality service and maintain a good relationship with its clients. Therefore, a list of the questions that may be asked of the information users will show what information they will need and in turn ask of their resources: Questions What listings are available in a specific neighborhood or price range? Is the pricing appropriate for a particular listing? How do the local schools rank in the state and region? What are the local property tax rates? Can you recommend an electrician/plumber/landscaper etc? Where can I find financing information? Is the price of this property likely to be reduced in the future? Information Needed in Response Information on listings from the various MLS used by the Realtor Statistics of recent sales of comparable properties Rankings and reports of local schools: students per class, extra-curricular, etc Reports for tax rolls and public records; previous tax rates Numbers and references of local tradesmen and businesses Information from banks, mortgage lenders, and title companies Knowledge and reports of market trends and conditions as well as comparable sales

6 INFORMATION SERVICE ANALYSIS 6 Are interest rates likely to change in the near Knowledge and reports of trends in interest future? rates and the market Are there are any market trends that could Reports of market trends and statistics showing influence listings prices? these trends Knowing the local market is one of the main strengths of an agent and one of the leading reasons that clients hire agents. A market analysis can be found through several resources but an agent must also know the market independently and a good agent must know what properties are worth to protect their clients. Comparable sales are the best way to know what a property is worth, which is useful in securing the best deal for a client. However, the sales reports may not always be accurate and an agent has the responsibility to know if there were mitigating factors that will have affected a sale price such as a seller who had to sell due to divorce or a new job, or a buyer who paid above market price for a specific neighborhood or area. This simply reinforces the fact that an agent must have good information and the ability to sift through data to ascertain true values. (Crookham 1995) Information Flow Analysis The primary information users, the real estate agents, are also the major source of information used. Information revolves around listings and client interaction which is then disseminated to the real estate community. The main resource for real estate agents are Multiple Listing Services (MLS) which are comprehensive databases of home listings for sale or rent. Agents gather data on their own listings from sellers, public records, and appraisals and then enter it into the database. Agents have sole access to this information and it is closely safeguarded for their own use which provides them with their information advantage over the public. Some websites provide listing data but it is often incomplete, requiring a prospective buyer to meet with an agent.

7 INFORMATION SERVICE ANALYSIS 7 The information flow begins with a seller, who enters into a contract with an agent. The agent then lists the seller s home on an MLS with complete details, selling price, and compensation to a buyer s agent. The agent begins the data gathering when approached by the seller and will conduct appraisals as well as information searches on the history of the property as well as other neighborhood factors that will affect the pricing. Once the information is entered into an MLS, it is available for viewing by other participating agents with buyers. To gain access to the MLS you must be a licensed agent and there are often membership fees to post and view listings. (Gee 2010) The information in an MLS is stored in an electronic database that can be accessed from any computer. The agents have individual logins and can retrieve information on their own listings, the listings of other agents, and edit listings as they receive information from clients. Some of the changes that are made concern property details, pricing, listing status, and availability. Current information is the lifeblood of this field and agents rely on the accuracy and currency of the data entered and on the input of other agents. Real Estate Agents with Prudential Fox and Roach are able to access a variety of resources and Multiple Listings Services through an organizational portal called Citrix Metaframe Access Suite. The impetus for this information technology was for Prudential to provide a one-stop source for a variety of information resources that would decrease the search times for their agents. The agents have a secure login system which then directs them to a number of tools and resources vital to their daily duties. Many of the resources that are provided through this system are fee-based services provided by the organization. (Andriolle 2006)

8 INFORMATION SERVICE ANALYSIS 8 One further information source is provided by online sources such as Birdview and software such as Top Producer. These information sources are subscribed to by the individual agents and serve to provide them with a further source of client information. Top Producer acts as a Continuation Program, by storing past records and contacts in a database and then updating the clients with current market trends and listing availability. This serves to provide the agent with information on the interests of past clients and contacts. Birdview is also purchased independently by some agents and provides feedback to the agent on client interests through website and internet questionnaires and search habits. This provides information on prospective clients and allows the agent to make new contacts and tailor their own services to fit those needs. (Jim Marshall, May 2010, Personal Communication) Real Estate Agent Clients BirdView Public Records Subscription MLS Citrix MetaFrame Access Suite Real Estate Agents TREND MLS PC Forms Know the Neighborhood RealFAST Forms

9 INFORMATION SERVICE ANALYSIS 9 Information Audit The organization has a very good internal information flow with a variety of sources. It maintains its own Information Technology department as well as many other departments that can add to the information available to the users. To streamline information flow they utilize meetings, blogs, phone conferences, online services, and technology seminars. Offices have sales managers that organize the agents and introduce the agents to the new developments by the organization. (Marshall 2010) Merrill mentions the importance of high quality information in real estate transactions and the danger of not verifying data. Very often the dollar value on the tax rolls may not represent true market value and a realtor must determine if changes in title were due to sales or deaths, transfers, or refinancing. Public records will often only record the changes in property data in the event of a sale. Also important is the square footage of a property, the square footage may not be consistent with the public records and it is the Realtors duty to ascertain the true statistics. A buyer may sue for misrepresentation if the property is not as advertised and an otherwise settled deal may fall through. (Merrill 2004) As a result of these possible risks to settlement, Prudential Fox and Roach provides its agents with a variety of resources and services in support of its mission of creating a powerful team and adding value to its employees. Andriolle et al mention one of the recent information technology initiatives undertaken by Prudential, Citrix MetaFrame Access Suite. This was intended to reduce turnover of agents due to technological issues as well as to decrease the time spent gathering information. The MetaFrame Secure Access Manager allows users to log on through a secure point and access any applications running on the company server. Through this

10 INFORMATION SERVICE ANALYSIS 10 access point the user can utilize conferencing, blogs, and chats. Also available are a variety or services to aid in the role of the users such as School Report by Homestore, PC Forms by PCFORMATION, Know the Neighborhood by eneighborhoods, and RealFA$T Forms. Also available is access to Multiple-listings services. (Andriolle et al 2006) Through a broker reciprocity and licensing agreement, Prudential Fox and Roach utilizes listings by the MLS TREND. (Prudential Fox and Roach, 2010) TREND is an MLS which provides a variety of service to its subscribers. Some of these services include a) access to public record data, tax rates, and deed and mortgage data for over 4.8 million properties b) TREND mobile, access to the latest information from the road c) Internet advertising d) online showing scheduling. The most important service is MLS Blue which provides access to more than 69,000 active listings and 1.4 million comparable listings. (Trend MLS, 2010) In addition to the services provided by the organization, many agents subscribe to other sources of information. As mentioned by Merrill, it is important to verify information and property data or listings may vary from one MLS to another. Other Multiple-listing services utilized in addition to trend include Paragon, County MLS, and a variety of Rental MLS. An MLS is only as good as the agents that subscribe to and update its listings, therefore using only source of information can result in outdated data. In addition to MLS, the agents will use services such as Birdview and TopProducer. (Marshall 2010) Birdview is a software suite which develops agents websites, aids in internet marketing, and manages leads. This builds a personal database for the agent on current and past client s inquiries and contact information. (Birdview Technologies 2010) TopProducer is a marketing system that builds a database of contacts and can help turn them into clients or leads. It acts as a continuation program and lead generator by

11 INFORMATION SERVICE ANALYSIS 11 gathering data from clients, the most important information source, and allows the agent to provide them with the services they need. (TopProducer 2010) Information Gaps Prudential Fox and Roach has the resources of a large corporation and provides its employees with the best information technology available and as such it is difficult to find gaps in the information flow. One gap is the lack of suitable sales automation programs, the agents must rely on subscribing to service such as Birdview and TopProducer on their own to generate client contacts and information. As client interests are the most important source of information for a buyer s agent, this should be an area of attention from the company. The company is in business to generate leads, acquire listings, and find homes for buyers. The best way to improve this process is know what buyers want and the only way to do so is through lead generating and continuation programs that gather data from clients and prospective buyers. Second only to information based on client responses, MLS data is the most important resource for the agents. However, an MLS can only provide the information that is entered into it by other agents and therefore not every MLS will have the same information or be as reliable as another. Two MLS may have contrary information based on the currency of their data and therefore it is important to verify data, a time consuming process. However, because sales generate such a large percentage of an agents income, MLS devoted to properties for sale are often updated regularly and have accurate information. A gap exists in information for rental properties. Since agents generate their income based on commission, a rental is less lucrative and many agents will not utilize an MLS for their listings. Therefore, an agent searching for rental properties has to spend a significantly larger

12 INFORMATION SERVICE ANALYSIS 12 amount of time retrieving data and must search through many more listing services. Since these services require a fee and searching takes time, there is a lack of information available on available rentals. (Marshall 2010) The company is in the business of making money and its mission is to provide high quality service, but its agents have difficulty finding rental information and clients with rental properties are at a disadvantage. Information Service Recommendation My recommendation for Prudential Fox and Roach is to develop an MLS devoted to rental properties and to encourage it s agents to utilize it. It will also be important for the organization to reach out to other realtors so that they will add their own listings and data to the resource to make it a one-stop location for information. This will decrease the time spent searching for rental information which will increase efficiency and productivity. Since rentals generate less income than sales, an agent that has to spend an inordinate amount of time finding rental data may choose not to pursue leads which ultimately will cost the company money. De Stricker offers a checklist for goals and needs that an information professional must consider when preparing information for an organization and the importance of quality information services in any organization. The information professional must consider the following questions when deciding if a change is necessary and when making the case for the addition of a new tool or resource: How often do the knowledge workers do their own searches when they need information -- 0%, 25%, 50%, 75%, or 100% of the time? How long does it take them to search for themselves? What is the organizational cost of that time?

13 INFORMATION SERVICE ANALYSIS 13 How satisfied are they with their results? Are there situations when project work has suffered, been delayed, or been redone as a result of the fact that self-searching produced incomplete information? What is the knowledge workers' estimate of the amount of extra time required for project work in these situations? (De Stricker 2008) By using this checklist, the organization can analyze and clearly see the need for the recommended service. When an agent needs information on rental properties they will conduct the searches themselves every time unless they have assistants, which is rare. Since rental data cannot be found in only place and is often difficult or time consuming to verify, the searches for rentals property will often take longer than similar searches for sale property though the commission is lower. While the organization does not directly pay the agents since they work on commission, the company does not actually incur a cost but there is a lost revenue penalty. The time spent searching or neglecting rental market share will take time away from earning commissions or will eliminate rental commissions from an agent entirely. Agents spend a good deal of their time following leads, speaking with clients, and showing homes; if they are unable to do this due to time spent searching they may lose a commission or prospective client. Agents are not satisfied with the resources available to them when searching for rental properties, the mission of Prudential Fox and Roach is to provide the highest quality service and a comprehensive rental MLS would go towards fulfilling this goal. In the case of incomplete information, if a rental listing is out of date then it may lead to complications with clients and lost time and productivity. The service I would recommend would serve as an MLS, or electronic database devoted to rental listings. The main problem with the current system is that current MLS are devoted

14 INFORMATION SERVICE ANALYSIS 14 primarily to sales or else are not used with enough regularity by enough agents. For the new service to be effective, it will need a supply of agents that will use and update it, it can only be effective with the cooperation of agents. Prudential Fox and Roach is uniquely equipped to succeed in this endeavor because of its size and large number of affiliated agents. By recommending it as the primary rental MLS for all of its agents it will quickly grow in listings and other agents will undoubtedly flock to it as well and add their own data. This service will reduce time spent searching by the agents will lead to increased productivity and revenue. Evaluation Although the real estate agents are essentially independent contractors within Prudential Fox and Roach, the organization has provided several quality information resources to aid them. The recent addition of the Citrix MetaFrame Access Suite has brought together many of the tools that the agents use so that they can be accessed easily and in one location. The MLS are not provided as tools of the organization, but rather as subscription services of the individual MLS. The resources of Prudential ensure that its agents will have an information advantage over the agents of other brokers which will help achieve more commissions. The information capabilities of the organization support its goals of remaining a leader in the industry and providing the highest quality service to both its partners and employees. Part of their mission is to add value in all of its relationships and having a high quality flow of information will impact that. Agents will benefit from ease of information and clients will benefit from interacting with well-informed and knowledgeable agents. The addition of a dedicated rental MLS will improve the revenue of agents as well as the organization by reducing time lost searching for information. The organization currently does not

15 INFORMATION SERVICE ANALYSIS 15 provide any such service and the privately owned MLS focus strongly on sales listings. This rental MLS will open up new revenue opportunities for agents, reduce search time, and reduce aggravation for agents and clients. Clients that have successfully found rental units may return when they are ready to purchase property which in turn brings more revenue to the company. In the organization information is perceived as extremely important. As mentioned before, the widespread information available on the internet has turned agents from salespeople to information professionals. The organization strives to streamline the information flow through new services and ways of reaching out to employees and clients. The value is shown through the company s willingness to invest in new technology such as the Access Suite and its attention to developments in the website and additional tools and services provided to its agents. In a business where the first and best informed find the clients, nothing is more important than good information.

16 INFORMATION SERVICE ANALYSIS 16 Resource List Andriole, Stephen J.; Mosanto, Charlton. (2006). Herding 3,000 Cats: Enabling Continuous Real Estate Transaction Processing. Journal of Cases on information Technology. 8(3), Birdview Technologies (2010). Birdview Home. Retrieved from: Crookham, James. (1995) Sales Comparison Approach: Revisited. Appraisal Journal, 63(2), 177 De Stricker, Ulla. (2008) When Trust Me, It s a Good Idea Won t Cut It. Searcher. 16(3), 30-5 Gee, Harold (2010) 'Residential Real Estate Data on the Internet: Benefits and Limitations', Journal of Business & Finance Librarianship, 15:2, Heller, F. A., et. al., Staking a claim on the electronic frontier: real estate finds a home online. Database (Weston, Conn.) v. 20 (February/March 1997) p Marshall, Jim. Personal Communication, Prudential Fox and Roach Real Estate Agent, 2010 Merrill, Lori Beth. (2004). The High Price of Using Unverified Public Information. Valuation Insights and Perspectives, 9 (3) 30 Prudential Fox and Roach (2010). About Us. Retrieved from: Prudential Fox and Roach, (2010) Home Page Retrieved from: TopProducer (2010) TopProducer Home. Retreived from:

17 INFORMATION SERVICE ANALYSIS 17 TREND MLS (2010). What is TREND?, Retrieved from: