Josh Cobb, founder and director at Stepps, is flying solo this week on the Real Estate Pros podcast. Fresh off the plane from Inman Connect in San Francisco, Josh shares his top takeaways from what is arguably the biggest tech-focused real estate conference in the world. He shares examples of industry disruptors making an impact on traditional real estate business models and what this means for the future of real estate.
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There is no doubt change is happening now faster than ever. It seems every week there are startup companies setting out to take on the existing players in the real estate industry. New business models are popping up frequently by people who are tired of the old way of doing things and with companies such as Uber and Airbnb gaining more of a foothold in our lives as consumers, there are more people looking at real estate as a prime industry just waiting to be disrupted.
And it’s something I believe real estate agents need to be comfortable with.
As Tom Goodwin, senior vice-president of strategy and innovation at Havas Media, says, “[In 2015] Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.” And we’re starting to see the very early signs of this disruption in real estate.
Opendoor.com is a site that launched recently in the US. The site values a homeowner’s property sight unseen. The homeowner enters their address, validates their identity, confirms some information that Opendoor already has about their home from public records, and then Opendoor sends an offer. If the homeowner accepts the offer, they fill out a few forms and choose a move-out date. Then, according to the site, it takes about three days to close the sale.
This is happening right now – opendoor.com is a marketplace for consumers to buy and sell property with no agent involvement and full transparency over price. Opendoor.com has attracted investment interest from people such as Peter Thiel, co-founder of PayPal, and so far, they’ve raised more than $US20 million in funding. The disintermediation for real estate is happening and there are people with deep pockets who are out there to see it become a reality.
Zillow, America’s biggest listing portal, just acquired a company called DotLoop for $US108 million. If you don’t know what DotLoop is, it offers a transaction system that allows the paperwork associated with a real estate transaction to be completed through its proprietary online network. So for us here in Australia, it’s a bit like one of the major portals integrating mortage processes and REI forms into their own system. Essentially, negating the need for agents or others to get involved.
I know what you’re probably thinking – what happens in the US wouldn’t necessarily work here in Australia. Well I can tell you for a fact that it can, and it will. It’s only a matter of time before the people with the deepest pockets make these kinds of investments with the money you as an agent have been paying them for years.
So does this mean real estate agents will be out of a job? I think it’s unlikely. But I fundamentally believe it’s going to force agents to become far more like consultants in the process of selling a home. I don’t think real estate professionals will be replaced by technology, but I do believe they’ll be replaced by agents who use technology effectively – and the ones who accept the future of our industry are the ones who have a future in this industry.
There was a great quote at Inman Connect last week by Kevin Foreman, general manager of INRIX, who said – “Young people talk about tomorrow. Old people talk about yesterday and the way things were.” I believe agents need to accept the new normal and start looking to how they can survive the inevitable change coming to the real estate industry. So where do you start? Well, first and foremost, it’s critical to accept the customer experience is the only point of difference we have left in business. It doesn’t matter how many years you’ve been in business, or how many awards you’ve won – it’s about what you’ve done to inspire your customers.
While I was in San Francisco I met with Sheldon and Sara from Liv Real Estate, based at Edmonton, Canada. Sheldon and Sara told me how they no longer enter their staff or their business for industry awards, rather they award their staff based entirely on customer experience and feedback. I think this is wonderful because it puts the focus entirely on the people you serve and not on another shiny trophy on the shelf in your office.
Like I said, there is no doubt that change is happening faster now than ever before. Mark my words, in the next 12-24 months we are going to see huge investment in technology by some of our largest industry providers and those outside of the industry looking to disrupt the way things have been done in the past. Just like when the major portals raise their prices, agents will get mad. But the ones who saw it coming and are comfortable with adapting to the future of real esate, they are the ones who will simply get on with the job.
So my question for you is this: Would anyone miss real estate agents if they were no longer needed? It’s a scary thought and it’s one that could very well be closer than we think.
But when all is said and done, the customer experience will always win. As Maya Angelou said:
“People will never forget how you made them feel.”
As always, thanks to you for joining us. We’ll see you next time on Real Estate Pros podcast.
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