Technology is changing the face of real estate, but what will it mean for professionals in the space?
Real estate professionals are enjoying faster and more efficient data analytics while consumers revel in 24/7 access and support as well as the ability to screen and shop for agents online using review sites.
Today, the majority of home buyers begin their home search online. Drone videos and virtual tours appeal to buyers – saving them valuable time – but up until now, some data was not readily accessible to the buyer. This included the property’s sales history including how long on the market and its final sale price. As some agents have been accused of over-inflating a home’s value in hopes of a lucrative commission or setting the price low to encourage a bidding war, access to such data is critical for both the buyer and the seller.
Open data means greater accountability. It gives the consumer confidence that their agent isn’t playing games with uninformed buyers or sellers, and helps to weed out agents who aren’t behaving professionally or acting in their customer’s best interests.
One emerging technological trend is email alerts for buyers. They receive an alert whenever a home in their neighbourhood is purchased, and for how much. This helps keep them informed about the market trends and helps them predict whether a price set by their agent is realistic.
All house hunters can instantly access vital data about their preferred neighbourhoods – schools, nearby businesses, parks, walkability, commute times etc. This data is based on hard numbers rather than estimates.
Investors can estimate cash flow from rental income and predict the market’s valuation in the next two, five and 10 years, and sellers can view asking versus selling prices, and accurately price their homes for the market.
In short, open data means giving power back to the people who can then make informed decisions based on real numbers and trends. Open data also provides an opportunity for service-minded agencies to provide on-the-spot answers about any question a buyer, or seller, may have.
Technology will not, however, make agents obsolete
The human touch is still very much in demand. Data is just one part of the buying equation. Most buying decisions are actually made emotionally and this is where a savvy and compassionate agent becomes invaluable.
Experienced agents have hundreds of deals under their belt, giving them the upper hand in negotiations, and marketing the property to prospects. Good agents also take into account the client’s individual preferences that data may not reveal, such as quality of appliances or finishes in the home. And a good agent is needed to close the deal and make sure the paperwork is done correctly.
The emphasis for today’s successful agency has to be on service. Any computer can crunch the numbers, but with emotions playing a big part in many purchases, the best agents will not only understand, but anticipate, their client’s needs and present them with the best options.
The reality is that most businesses in most industries now offer instant-access technology that delivers the hard data, one-click buying and around-the-clock support. Any business that doesn’t see the value of this will be left behind.
Sales is a numbers game and convenience may be tipping the scales toward simplicity and low cost as long as the public is satisfied with the level of service.
Another benefit of a technology-driven model is instant credibility. Online reviews by customers give potential customers fast feedback on whether an agent is any good. President of the Real Estate Institute of Australia, Neville Sanders, says the new model isn’t a threat. He says the industry welcomes new competition and many agents are already open to the idea of negotiating a fixed fee if the seller asks (although this is not common knowledge among consumers). Mr Sanders adds that an agent’s reputation is everything and people will seek out an agent who provides a valuable service, fosters confidence and gets the job done.
For the agent, technology also means access to social media and being under public scrutiny in online reviews. Agents need to demonstrate their value in this new marketplace because they are visible and critically reviewed by their customers. In the past, estate agents have developed the unsavoury reputation of putting themselves before the customer (get the sale at any cost). However, in the online world, bad agents can’t hide anymore. Successful agents need positive reviews, which is a bonus for top agents but a death sentence for unscrupulous agents.
Meanwhile, Australia’s first real estate social media platform is already valued at $20 million. Other platforms are poised to enter the space as more real estate professionals discover the power of social media and facilitate joint ventures with companies such as mortgage providers, insurers, home improvement contractors, landscapers and other service providers, giving more convenience, speed and ease for the home seller or buyer.
Technology is an inevitable evolution of all businesses, and ultimately it will likely do much to improve the real estate industry, for both agents and consumers.
Buying and selling a home is the biggest and most stressful transaction a person is likely to make in their life, and most will only trust their home to an agent they feel comfortable with. The question is, will the consumer take a convenient, low-cost digital approach or buy and sell their home the way their parents did?