It may be hard to conceptualize, especially for first-time home buyers or those yet to embark on buying their first home, but 15 years ago, the real estate market was a different beast, information wise. When records used to be buried in file folders, it put buyers in a much different place than they are today, able to access detailed property records on their smartphones within minutes.
"Before, you spent a lot of time doing information gathering, and collecting, and response," says Jeremy Wacksman, Chief Marketing Officer at Zillow. "The internet really opened the doors. Agents are freed up to help get the deals done. But now they have to be agent, negotiator, price setter, and a community resource."
Wacksman sees technology shifting the role of real estate agent from an information arbiter to a local market expert and service provider ("It’s not about the data; everyone has the data now"), while brokers need to better leverage technology to help their team become responsive, active experts for their clients. While there’s always been some frustration over the work of certain agents, demands have only become more pronounced when ever-present technology lets everyone do their own research. Many in the industry feel success is about reacting to evolving client expectations, and adapting as technology changes the buyer-agent relationship.
"Clients today are much more knowledgeable," says Tamir Poleg, CEO and founder of Real, an app that allows agents to ditch the conventional brokerage model. "They do online research, know what they’re looking for, and know the neighborhood. I understand the frustration people have working with agents who can’t provide the services they expect, then collect a hefty check. They key is for agents to be more responsive, understand better what the client wants, and justify the money that they’re getting."
The availability of data, an established market norm for years, requires agents to be on their best games, says Michael McGrew, treasurer at the National Association of Realtors (NAR) and CEO/Chairman of McGrew Real Estate on Lawrence Kansas. Consumer’s ability to educate themselves is a net positive, he says, but there’s still an important role for agents, especially when it’s time for financing.
"It’s one thing to go online and get curious," he says. "It’s another thing to look at financing options. People realize they can learn the alphabet and language, but they aren’t necessarily fluent."
87% of buyers purchased their home through a real estate agent or broker, a share that has steadily increased from 69 percent in 2001
While technology is disrupting numerous industries the idea of making a massive, infrequent, and consequential purchase such as buying a home without the help of a trained agent still scares many buyers, according to Wacksman. If recent stats showing the dearth of for sale by owners transactions is any indication—according to NAR stats, 87% of buyers purchased their home through a real estate agent or broker, a share that has steadily increased from 69 percent in 2001—it’ll be a long time before the human element is taken out of real estate. But that doesn’t mean tech isn’t changing how that relationship works.
McGrew feels technological automation and standardization aren’t necessarily right for the real estate industry, when every property is unique, but feels there’s a lot of room to integrate new technology into the buying and selling process ("all of us in this business have to be committed to making it work better.") The National Association of Realtors is a big investor in Second Century Ventures, a company that funds startups in the real estate industry.
Wacksman believes new technologies, such as video and VR tours, as well as programs such as DotLoop (an e-signing service Zillow acquired for $105 million last year that takes much of the paperwork of real estate transactions online), will streamline the process even further.
Poleg believes the as tech takes away barriers to information, the real issue is responsiveness and service. Technology will continue to provide more access to information, and agents and brokers need to continually be more responsive with clients. He envisions a time when bots become a tool to constantly respond to buyer request for updates and information.
"It you look at 2000 compared to today, the percentage of people using real estate agents is increasing," says Poleg. "If someone said a robot could do your surgery, would you do it? Technology can replace a lot of things in a lot of industries, but real estate agent isn’t necessarily one of them."