What does the future hold for the balance between residential real estate agents and technology? Technology is advancing rapidly, but it is not yet clear if technology will replace the agent’s role in the transaction or further cement the agent’s centrality.
The debate about whether software and portals have the potential to replace real estate agents is becoming increasingly urgent because the pandemic accelerated the adoption of technology in the industry far beyond the prior trend.
I believe one thing will determine whether agents have been replaced or have become even more central to the transaction 10 years from now.
That crucial factor will be who gets to decide which tools are adopted. Will those forces be pro-agent or anti-agent?
One possibility is that groups that want to grow at the expense of agents are permitted to build the technology that becomes the industry’s infrastructure. In that case, the outcome for the real estate agents would be grim.
On the other hand, groups that are dedicated to empowering agents and making them more efficient could create the decisive technology. In this eventuality, agents will become even more central to the transaction.
I feel strongly that the involvement of agents makes real estate transactions more efficient and satisfying to all involved. But not everyone believes this. The failure in Australia of discount online agent Purplebricks shouldn’t give us a sense of complacency.
Look at vendor paid advertising. In recent years, the portals have worked to establish direct relationships with vendors. This enables portals to replace agents as the first port of call for property owners who want to sell.
For example, the REA Group’s recent annual investor presentation claims that 24 per cent of owners who visit the realestate.com.au dashboard for their property become a lead the portal can sell to an agent or to a mortgage broker or property manager. Imagine a future in which agents have to pay to be put in touch with every vendor who decides to sell their home.
For agents to retain their vital role, the real estate industry needs to use technology that empowers agents to be more effective and efficient and to have more information at their fingertips.
I am not just talking up my own book when I say I firmly believe that the CRM is the vital tool that can help agents accomplish all of this. The CRM serves as agents’ day-to-day and even minute-to-minute workspace. When the CRM becomes more capable and has programmed into it the ability to act on data that until now has been left untapped, we give the agent more power.
You can think of the real estate CRM as an Iron Man suit. As the suit gets more powerful, so does the agent who wears it. This is very different from technologies that are outside the agent’s control. As these technologies become more powerful, they can threaten the agent.
The role of technology in real estate is not new. Back in 2018, KPMG’s Global PropTech Survey revealed that 97 per cent of the real estate industry believed that digital and technology innovation would impact their businesses.
The pandemic, however, compressed at least 10 years of innovation and technology adoption into the 12 months of 2020. Agents now have to decide which tools are empowering and which are threatening.
Bill Nikolouzakis is the group COO and CRO at PropTech Group.