The Real Estate Agent of the Future — Ray’s PropTech Weekly #38

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Friends, Feudal Landlords and Commoners,

Last week I attended a conference organised by the RICS, where a panel of estate agents (online and traditional) debated what the future of real estate agency would look like.

All they spoke about was today. Which of the models from today would survive.

There was very little foresight. And it’s not the first time: the Future of Property Tech conference a few months ago threw up a similar lack of ideas.

So naturally I’m taking it upon myself to paint a picture of where estate agency is going, and what the people and technology look like.

Let’s get one thing out of the way: real estate agents are not going the way of travel agents. Not now, not ever.

Travel is commoditised. There’s a plethora of choice, there’s less money at stake and the worst that can happen is you have a nightmare holiday. Which means you care more about price and convenience more than fear of missing out.

There are (relatively speaking) not many homes sold. When selling, buying, letting or renting, there is a massive information asymmetry. Even worse, there is a massive and real cost to getting it wrong.

Or at least the perception that getting it wrong will hurt, which matters when people make decisions.

Having someone hold your hand — in most people’s minds — is ‘worth it’. It’s valuable to them.

There will absolutely be DIY or FSBO (For Sale By Owner) platforms in the future, as there are now. But in my opinion they will continue to be a niche offering when selling your home.

Letting a property however is absolutely a function that can be passed over to technology that supplements both the professional and amateur landlord. The fear is more contained: if the worst happens and they get a bad tenant, it’s painful but there are remedies that ‘only’ cost thousands in lost rent and due process (as opposed to the tens of thousands or even hundreds of thousands when it comes to selling a property badly).

So who will you be turning to, in the future, to hold your hand when selling property?

Your friends and family, enabled by mobile technology.

Agents are currently geographic — after all the three things that matter most with the value of your property are location, location, location.

As technology puts more information in our hands, systems like Apply.Property and a ‘Letflo for sales progression’ will ensure anybody can operate as a fully compliant and competent realestate agent.

There won’t be the need for expensive marketing on property portals or local newspapers, because social networks are breaking down geographic boundaries.

Someone in your social circle will at least get the foot in the door to pitch against ‘traditional’ agents.

They won’t have the level of knowledge of a Henry Pryor (who is a font of property knowledge you should absolutely follow on twitter).

And here’s the key: most agents right now don’t have sufficient knowledge to either wow you or make a significant difference. Most people choose someone primarily to hold their hand through the rollercoaster ride that is selling your home.

So why would you choose your friend? What can they show you to win your trust?

Imagine you invite three other agents over, who today would tell you about the other homes near you that they’ve sold. They might even be savvy enough to show you a presentation of local data and similar properties with software like Acaboom or Rummage4.

In a survey I conducted 3 years ago I asked agents how often they were instructed to sell someone’s home at the first valuation visit. The answer was a resounding 0%.

But what if your friend whipped out their mobile and while maintaining eye contact tapped on their phone, turning it around to show you a beautiful property listing created in minutes from their conversation with you.

Even better, they say with one click it’ll be advertised online. They say they’ll probably have viewings booked in before they even leave your home — thanks to instant alert notifications from property listings sites.

While some talk, the person doing the job in front of your eye not only has your trust but exhibits an incredibly powerful sales hook that compels you to say yes.

It doesn’t end there. Pricing property is important — and not just for the reasons you think it is.

If most people start their property search online, then why isn’t there any ‘SEO for property portals’? How does an agent ensure their client’s property is seen first? Or seen at all? Do they even care about visibility on the portals?

What if varying the price on a daily basis could increase the number of views and therefore the number of viewings booked? Wouldn’t that be something. Here’s one I made earlier:

And how about enabling people to book a viewing without needing to call? I can hear the ‘better’ agents screaming ‘applicant qualification’ and ‘contact details’ at the screen. Well, you wouldn’t need to endlessly train and test ‘negotiators’ to get the right information over the phone when the technology does it for you, and faster.

Ever wondered what agents do when someone doesn’t show up for a viewing?

What if the app that took the viewing booking text the viewer an hour before to confirm, and if they don’t confirm within half an hour the agent gets a message saying the viewer hasn’t confirmed and maybe they want to call them — no need to fumble around for phone numbers, one click on the app and you’re connected.

These little details add up to a level of competence that could easily surpass the service offered today, with less training and support needed.

Online agents today are having to throw money selling their cheaper price proposition to consumers, because it isn’t what people care about — there isn’t a good enough market fit. They should be focusing on trust, technology and most importantly changing the game by erasing the advantage of local by using the power of social.

An army of part time, Avon-style real estate agents selling a few properties a year for their friends and family would quickly overwhelm the real estate industry into reform.

Local agents wouldn’t go away, but they would be consolidated into big corporate brands that people trust. And what would those corporates do? Provide training, support and technology for an even longer tail of professional agents to compete. Let’s say doing a Redfin or Compass, but with better tech that moves the needle more than hiring strategies.

So that’s my vision of the future: consolidated brands and a very long tail of real estate agents, professional and part time, enabled by smart, simple technology.

If boots on the ground win wars, then real estate is definitely a game of numbers.

I think two companies deserve special mention for showing a potential future different to the one outlined above (one without the need for real estate agents): Opendoor and PropertyPartner.

The former has demonstrated people can trust an algorithm to sell their property. The latter by virtue of allowing people to buy and sell parts of a property could point to a future not only without real estate agent but also without mortgage applications (leverage would be held on the platform side, rather than the individual).

My point is this: if the question is what does the future look like, let’s talk about the future. Comments and your own views to rayhan@wigwamm.com. I’ll publish the most thought-provoking commentary.

Please feel free to relay news, tips and comments @RayhanRESI

Rayhan’s PropTech Weekly XXXVIII

Upcoming Events

German Proptech Meetup — 11 Jul — Link
SPD Insights — Internet of Things — 13 Jul — Link
Built Worlds ‘Tech in Real Estate’ Livestream — 14 Jul — Link
Inman Connect SF — 2–5 Aug — Link
PropHack — 15 Oct — Link

Tech secrets from rising (US) Real Estate stars (Realtor Mag)

Some genuinely useful tips and best practice. I don’t mention things like paperless process and e-signatures above because it’s a given that we won’t be printing out agreements in the future. Similarly a great CRM system would be essential in allowing someone to put in part time effort and never let a lead go cold: Link

Plentific raise £2m from Pi Labs and others

Looks like the company behind Zoopla’s Find A Pro tool found some capital: Link

Zoopla partner with Vieweet to offer agents remote viewing tools (Property Industry Eye)

Smart gets smarter: Link

The rise of drone technology in construction and real estate(JamesDearsley.co.uk)

Comprehensive and excellent analysis at the current and future uses of drones: Link

Brendan Wallace — The Proptech VC

Incredible effort by one US based VC to dominate the funding environment for this sector by leveraging Angel List syndicates. If you want to invest in Proptech, each of Brendan’s deals can be accessed from as little at $2,500. That’s pretty incredible: Link