In the second, concluding part of Real Estate Business’ Agents of Change series, we look at the impact technology and consumer preferences will have on how you operate in the real estate industry
Last month’s cover story, ‘Agents of Change’, examined some of the broader issues that currently influence the real estate industry, and their likely impact on how agencies are set up and managed in the future.
We looked at whether groups can give franchisees the flexibility that some now demand; what constitutes good value in the eye of franchisees and franchisors; and why people and culture will matter even more in the years ahead.
In this second article, we examine another two important areas of concern for most agencies: technology and consumer preferences.
Theme four: Technology
When it comes to how technology will influence the way industry professionals and agencies operate, Professionals’ group chief executive Glyn Morgan believes the most significant change in the foreseeable future will be around client self-service.
“With the amazing adoption of smartphone and tablet technologies, with rich data and information being increasingly available anywhere anytime enabling clients to have almost the same information as us, there is little doubt we will need to re-engineer ourselves to add more and better value to our clients,” Mr Morgan says.
“Social media will continue to drive change in real estate. If we think back a few years, searching a website was all about asking a question and getting back a static result; with the plethora of social media, search is now often a multi-dimensional discussion between friends – and friends of friends.
“Clearly, it is no longer simply being top of Google; we will also need to have a good social reputation and presence also.”
Stewart Bunn, national communications manager at First National, believes principals are going to “need” help with social media, even if they don’t currently “want” to participate.
“Running a successful business will require new PR skills and communication capacity,” Mr Bunn says. “This medium is no longer ‘emerging’ and it’s way past time to be getting serious about adapting to this method of communication.
“Business owners will need help managing a paradigm shift in staff interactions, consumer complaints, profile attacks, content creation, and, more importantly, mastering property marketing across the ‘share-o-sphere’. Those who fail to add value to their clients’ campaigns will ultimately find themselves in a cold, dark, lonely corner.”
Mr Bunn adds that while an element within the profession has been able to operate with little concern for positive consumer outcomes, technology will change this.
“Social media will level the playing field,” he says. “In the same way that the internet rendered large numbers of travel agents redundant, social media will destroy the reputations of unscrupulous agents as well as the freedom for lazy or incompetent agents to act with impunity – as it rightly should.
Real Estate Institute of Tasmania president Adrian Kelly says he isn’t concerned about what technology could mean for the industry.
“I’m quite sure that as new technologies are introduced into the industry that most principals will grab what suits them and run with these new advances,” Mr Kelly says. “I don’t believe that the internet and new technology will ever, at least in the short term, take the place of the estate agent.”
He’s also not so concerned that the internet is giving consumers access to information that was once the sole preserve of agents.
“In my view, this is a good thing and saves much time,” he says.
LJ Hooker CEO Georg Chmiel says technology is certainly important as a tool that can assist his group’s offices to connect, improve productivity, create leads and build agent profiles.
“But the purchase of property – the family home – is a human, emotive interaction that needs local knowledge and expertise for a successful transaction,” he cautions.
For Peter Flynn, Richardson & Wrench’s group franchise manager, technology should help agencies connect with potential clients.
“It needs … to make it easier for you to connect with Facebook, social media, websites, everywhere that people are looking for product,” he says.
“Given [technology] is the preferred mechanism for their marketplace to connect, it is really important that offices have integrated solutions. It cuts down on duplication and allows for consistency of messaging and communication.”
Technology is also having a major impact in the property management space, adds Sean Green, operations manager at Raine & Horne.
“The availability of information to clients on a 24x7 basis, such as [via] a vendor or tenant log-in system, will have significant impact,” Mr Green says.
“While it’s not new technology, vendor log-ins are under-utilised and allow vendors to check how many people have attended open homes or visited properties online, to view the comments of aspiring buyers and so on.
“Landlords will demand this information too.”
“Technology will also help deliver more effective communications to owners, buyers, investors and tenants, and deliver efficiencies to sales agents and property managers by reducing paperwork as more processes head online to laptops and smart phones.”
Technology is also broadening an agency’s potential reach, and as Mr Morgan points out, the internet has created new opportunities to service international markets.
“One of the exciting plans we are implementing is helping to connect Australians looking to invest in property in America with reputable and reliable agents in Professionals in the USA,” he says.
This is also the case with several other networks that have offices spread across the globe, including Ray White, LJ Hooker, RE/MAX and Century 21, to name a few.
One Agency’s director, Paul Davies, also pointed to technology’s role in undermining the need for agency shop fronts.
“As shop fronts now do little or nothing to assist in the sale of a property, technology is the way agents keep in touch with clients – it’s vital to future success,” Mr Davies says.
“How long will it be before home owners start asking themselves, ‘Real estate is simply advertised and sold online – do I really need to pay an agent thousands of dollars to do that for me?’” one commentator asked on rebonline.com.au.
“Is this a precursor to home owners asking, ‘Is technology negating the need for a real estate agent?’”
However, Jens Raun, principal of Gold Coast home office-based online agency raun.com.au, told Real Estate Business he had operated a “true” virtual/online-only real estate agency – named place2live – for more than seven years and wouldn’t meet the seller or buyer in person.
Recently, he decided to revert to a more traditional real estate approach and is meeting sellers and buyers because “I was getting more and more requests for a meeting in person”.
“[However], I have no doubt that the true virtual model has great potential in the future when the market gets back to normal and that a home office-based operation will have great merits until then.”
Meanwhile, Geraldine Brunner, principal/director of GB Realty, partially challenged the notion that property managers need a shop front to operate effectively.
“What I have found these days is that most people are time-poor and prefer the convenience of contact by regular email updates, text messages and a simple telephone call,” says Ms Brunner, who has operated a virtual office on the Gold Coast since 2004.
“In my experience, tenants actually prefer the option of a direct deposit system for their rent payments, which they can do in the privacy of their own home.”
Jay Standley, of WA-based independent Barr & Standley, acknowledges that technology has changed the way people search for properties.
His business has had a prominent position on the main street in Bunbury for 35 years, and while walk-in traffic has dropped by up to 80 per cent, Mr Standley remains adamant that shop fronts still have a place in the contemporary real estate industry.
An office can create a strong team culture and provide exposure to the local market, he believes. Moreover, while many now use the internet for their property research, quite a few people still rely on more traditional media.
“Tradies don’t use the internet, and nor do many older people,” Mr Standley says. “Some still use newspapers. It’s similar with having a shop front – it’s still possible that someone is walking through town, so you can’t rule out potential buyers coming in for a chat. It makes sense to be diversified.”
So, how will new technology help build and foster client relationships? Real Estate Results Network’s Michael Sheargold says he sees offices that are still driven by technology rather than by relationships, but he still believes technology is helping agents become more productive.
“I’m seeing now for the first time technology actually supporting productivity,” he says. “The mobile office is real now.”
For example, agents would not previously have used laptops to respond to emails while out on the road, but this isn’t the case with the much easier to use tablet-style devices. Even their longer battery life has played a significant role.
That’s not to say technology will replace the need for an office, Mr Sheargold says.
“Offices are important,” Mr Sheargold says. “It’s where [staff] can bounce their ideas around, and you need creativity to bring deals together.”
In flat markets, he says, it’s often important to have creative thinking to get some property deals across the line. This is where agents earn their stripes.
THEME FIVE: Consumer preferences
Closely linked to the evolution of technology, consumer behaviour and preferences will be critical components of the way in which agents and agencies operate in the years ahead.
“Consumers needs have changed,” says Mr Chmiel. “They now have access to information online and are able to research thoroughly via websites (on smartphones and iPads). As a result, consumers are highly educated surrounding the real estate transaction and come prepared before meeting agents.
“On paper, today’s Australians are wealthier than any previous generation and as a result, many have invested in property and property management. We are still a nation of home investors but today, consumers have higher expectations for agents’ expertise and their local knowledge.
Mr Green adds that there’s an expectation agents must be more professional.
“Consumers expect them to be punctual, familiar with the local market, transparent and have a thorough knowledge of the property they’re selling or leasing,” he says.
“In other words, consumers expect real estate professionals to be the vehicles by which they meet their own real estate needs. If they send an email or make a telephone call, they expect a prompt reply – not a return call one or two days later.”
“An excellent customer experience doesn’t need to break the bank,” he adds.
Jay Standley agrees: “All technology has done is increase consumers’ awareness and knowledge, and made them more savvy and demanding,” he says.
“In many instances, they have the information about a property or area before you do you. Where an agent is really valuable is being able to bring a buyer and seller together, and in extracting the maximum price for the property. A well trained agent can always get more money.”
Glyn Morgan believes buyers’ and sellers’ needs haven’t changed much – except that they expect speedy replies.
“At the core, real estate is a people business,” he says. “However, it’s just that the speed with which our customers want to be satisfied has changed. Where not long ago it would be satisfactory to supply answers to clients within 24 hours, the demand for answers is now – within an hour or two.”
“Thanks to the internet, clients can get and demand property information 24 hours a day, seven day a week and it is our challenge to ensure we are keeping our clients satisfied.”
“Responsiveness is now part of the decision-making process,” adds Mr Sheargold, “yet some email response times are just disgusting. You’re ahead of the pack by just responding, and then it comes down to the information you put in.”
One problem Mr Sheargold has noticed is that some agents still wait until a buyer appears serious about a property before they start treating them with respect.
“The agency that is proactive, [always] building up the relationship, and that is results focused, [will do well],” he says.
Greg Hocking, of the Melbourne‑based group of the same name, says his network has responded to the demand for quick yet informative replies by looking at how information should be delivered to potential buyers.
“What format do we deliver it to them in? [It’s with] better pictures, better presentation, videos in some cases, and always having floor plans,” he explains.
“What we’re also doing is opening on Sundays,” he adds. “We want to [make] that quick connection with them. We make that commitment to our sellers – that we won’t wait until Monday.”
Mr Hocking says that with the number of commitments people have – particularly married couples – it’s imperative to take advantage of what little time they might have.
They also open late mid-week to accommodate people before they head home after work.
Technology has empowered consumers, moving the traditional property search online from the newspaper and the real estate window, says Mr Flynn, but they still want someone they can trust and who can move a deal forward.
This means building close ties within the local community.
“The community referral base is more important than ever in an age of information overload,” Mr Flynn says. “The school mum network holds sway and agents need to adapt to that by becoming an integral part of the community.
“Agents need to be engaged and seen to be supportive. There is also a need to be aware of shifting demographics and display sensitivity to cultural differences.”
Mr Sheargold agrees, and this is something the Real Estate Results Network emphasises to its members, who are urged to strengthen their community brand integration.
This may involve simple things such as letting a local group use a meeting room at the agency’s office when it’s not being used so that when locals think property, they think of their real estate brand.
“The agent’s name should be synonymous with property,” he says.