Real estate agents worldwide need to face the future. Technology startups are targeting the home buying process, aiming to reduce transaction costs by moving the process online and at the same time potentially rendering the traditional real estate agent role redundant.
In April 2015, a PWC report on the future of the Australian workforce listed the top 20 jobs most at risk from technology over the next 20 years. Bookkeeper was no. 1 with a 97.5% probability of being automated, while real estate agent was no. 12 at 85.2%. The reason is simple: the role agents perform can largely be replicated online (just like the traditional stock broker).
Websites like https://www.solopro.com/ (US), https://www.emoov.co.uk/ (UK) and http://www.hello.com.au/ (Australia) all promise to help sell properties for a fixed fee. They arrange photos, floorplans, website listings and assist with documentation. All you need to do is handle inspections and final negotiations. As the difference between 2-3% of the sale price and a flat fee of a few hundred dollars is significant, these platforms are inevitably going to increase market share, putting pressure on the traditional agent model.
This doesn’t mean all agents will go out of business. There is a human side to real estate that is hard to replace. But the need to stand out becomes critical. As sellers weigh up the benefits of traditional agents versus their digital competitors, each individual agent’s value proposition will need to be crystal clear.
- Record and promote your results
The most persuasive argument in favour of a human agent is that your knowledge of the market and negotiation skills results in higher sales prices. So prove it. Become a data junkie by recording every sales price and how it compares to the area average and the set reserve price. Better yet, if an online platform is selling properties in your area start recording their sales prices so you can compare against them too.
Nothing is more powerful than being able to say to a potential seller ‘yes, I am more expensive than a website, but my results outperform the market and here is a summary to prove it.’
Google-backed https://www.homelight.com already ranks agents on their performance – time on property on market, time spent with client, sales price etc. Go up in the rankings and referrals come your way, go down and work starts to dry up. This is a sign of things to come so own your data, work on it if you need to and prove your worth.
2. Build your profile online
The book Reputation Economy (http://amzn.to/1QUDYVY) predicts a day where our online reputations will dictate our success and in many ways that day has already arrived. Two agents, one with an excellent profile on their company website, full Linkedin summary, some professional videos on youtube and even a personal website using something like https://branded.me/. This agent posts relevant articles on Linkedin demonstrating deep market knowledge with an eye on future trends and really understands their target market demographics by communicating with them online.
The second agent has achieved good success the normal way. Hustle: phone calls, working their lists, following up leads and hitting targets. They have a good profile on the company website but there is little other about them to be found online.
The other thing the first agent has done is identified agent comparison sites early as a fantastic opportunity. Sites like https://www.ratemyagent.com.au from Australia are like tripadvisor for real estate agents. We all know how tripadvisor has influenced the hotel booking process, and it is now no different for home sellers. You should aim to top the rankings. Treat every client like a hotel guest and get every client to rate you. The future importance of these sites cannot be underestimated.
Now think about the potential seller, focused on achieving the best possible price for their largest asset and desperate not to choose the wrong broker. Faced with these two agents, the decision is obvious based on 5 minutes of online research. Agent one is knowledgeable, tech savvy and has a large social media following they can leverage to sell the property, while agent two may have all the right credentials without the online proof to back it up.
3. Make real estate technology your business
The good news is that while some companies want to replace agents, there are even more companies trying to help them. This creates an opportunity to leverage new products to offer services the online sites can’t.
Homepass.com.au is a mobile app that significantly increases the productivity of the home inspection process. It checks people in/out, records their details, sends documents and tracks their visits. This helps you to approach the buyer with more targeted properties, increasing the chances of sale.
Upnest.com is a US based company allowing agents to compete to work with potential sellers. This is a lead creation platform which gives you access to pre-qualified buyers and sellers.
Curb Appeal (http://www.curbappeal.pics/) makes taking professional photos using your iphone possible. This can in turn help to reduce your costs, delivering savings you can either pass onto your clients or book as increased margin.
Sites like Disrupt Property track these startups making it easier to keep up to date with new products
4. Get International
There are a growing number of platforms allowing overseas buyers to access western markets. Juwai (http://www.juwai.com/) is a dominant one for Chinese buyers giving them access to Australia, the United States, United Kingdom, Canada and so on. It’s like Zoopla or RightMove but just for the Chinese. Listing your property is easy and most online agents focus on their domestic market portals so this is another route to show potential clients that you have access to more potential buyers so you are worth the commission.
It is still early days for the growing middle class of countries like Brazil, Indonesia, India and China in terms of overseas property so get yourself acquainted with these sites and you will be ready to ride the wave of cross-border investment.
The bottom line is that residential real estate is getting more competitive. It’s always been competitive but it’s been an even playing field between agents. Now, the internet has introduced a no frills version which will appeal to anyone who thinks they know the price of their home (that’s a lot of people). Traditional agents aren’t going anywhere, at least for a while, but their success will increasingly rely on being able to differentiate themselves. Ironically, it’s technology that allows them to do that.