It has been said that the real estate industry is more interested in hindering new technology than using it as a benefit for consumers. It has also been said that technology companies are more interested in creating something new or breaking something old as quickly as possible than making sure it has a long-term benefit.
This is really the crux of the conflict between the real estate industry and technology innovators. We love to talk about each other. We love to hate each other. We rarely understand each other, because we come from such vastly different viewpoints on time, responsibility and value.
Your success is not our success
Often, our relationship feels a lot like a father giving dating advice to his teenage son. The real estate industry is the paternal figure whose wisdom is based on long-term perspective, grounded in safety and care for relationships, and often achingly boring. To the young upstart, the advice seems hopelessly outdated, and many times it is.
The son knows far more about the changing world and the intricacies of modern dating than his father ever possibly could. At the same time, he knows little about the commitment, sacrifices and care necessary for a long-term relationship. Dad’s view of dating success envisions a nice daughter-in-law and grandchildren. His son is just wondering how loud to rev the engine in his sports car to impress the girl he wants to take to prom.
While these characters certainly oversimplify the situation, they do illustrate the massive gap in mindsets. Not all real estate folks are cranky old men, and not all techies are just testosterone-fueled teenagers, but there is a fair share of those two characters in our psyches. We are two industries whose entire frameworks of defining a successful outcome diverge so widely that we can rarely agree on the best route to get there.
Mediation is necessary
The vastly different ways we view technology in the real estate industry turn many conversations quickly into shouting matches. It’s a cliche, but without understanding your counterpart’s situation, you can’t possibly relate to his viewpoint.
Having spent years working within, and consulting for, technology startups, I’ll be a bit egotistical in my belief that I can shed some light on bridging that gap for the tech types who “just don’t understand why we real estate folks are all so cranky” when they’ve invented something that they believe is wonderful for our industry. If nothing else, it may give our technology-oriented friends a different direction from which to approach us.
The usual characters in our conversations can hit the high points:
D.S. Rupt: “You won’t believe the tool we created for consumers! We combined data from hundreds of sources and found a way to show online what a home is worth without the need of an agent!”
Scrooge R. Estate: “That sounds like a lot of work. So, you say your estimates are within about 20 percent of the value of the home. That’s roughly $100,000 off in a lot of markets. My clients will be amazed. While I’m out doing the serious business of selling homes, you bring back the menu when it has something on it besides a crap sandwich. Because I’m not swallowing it.”
D.S. Rupt: “Whoa, why so angry? Consumers love it. It’s big data at its best. Look how much traffic it gets!”
Scrooge R. Estate: “Consumers love Harlem Shake videos. Those things suck the life out you faster than a can of prune juice, but consumers still love them. In the meantime, I have clients who I need to spend an extra hour with now, explaining to them why your online valuation is so far off.”
D.S. Rupt: “OK, fine, but this other idea is really great. We’re going to empower consumers by letting them “whisper” to each other about the value of their home before listing it. They can find out what other commenters would be willing to pay for it. It’s disintermediation!”
Scrooge R. Estate: “Don’t piss on my leg and tell me it’s raining, kid. You’ve just created hundreds of more uninformed opinions to confuse my sellers. No address? These price estimates are going to be worth even less than the automated ones. At least those have a location. We all know a valuation without location knowledge is worthless. Now I have a lot more uninformed commenters’ opinions to distract my clients from my professional advice.”
D.S. Rupt: “What? How could you not like these? No one’s ever done this before! We’re breaking new ground — for consumers!”
Scrooge R. Estate: “I just did a real CMA for my clients while you were talking. You just made my job of explaining it to them longer.”
D.S. Rupt: “But we’re crowdsourcing knowledge!”
Scrooge R. Estate: “Yes, larger crowds of people always lead to more intelligent thinking.”
D.S. Rupt: “Fine. OK, so how about this: You need to convince your MLS to send us a direct feed of all their listings. Better yet, just let us take over for the MLS. As my cool friends say at the conference, “Give the MLS enough rope and they’ll hang themselves,” right? I mean aren’t the MLSs just old dinosaurs on the way out anyway?”
Scrooge R. Estate: “You mean the greatest benefit ever given to the consumer by the real estate industry, right? The ultrapowerful organization that creates a standardized platform for consumers to have access to all brokers’ listings and for brokers to cooperate with one another in a professional manner when marketing and selling homes? The one that your website’s entire business model was founded on originally when you were scraping those MLS listings?”
D.S. Rupt: ”Alright, alright, let’s change the subject. We’ve created a system that integrates MLS data to rank and score real estate agents. Consumers will love it. We’ll finally have a standardized system of rating an absolutely subjective professional service as if it fit into a matrix! Transparency!!!”
Scrooge R. Estate: “I’ll give you some transparency when I Scotch tape your mouth closed, kid. You think that aggregating listing data from the MLS is even a fraction of the picture of a real estate agent’s success? Do you even know what off-MLS sales are, buyer-side transactions, team-based sales, agents who work in multiple MLSs, etc.?
“Even if you had all of your data straight, this would be like throwing sand in the bathtub and calling it Hawaii. You can’t possibly boil the complexity of sales processes down into a simple measure that is supposed to define what a successful real estate agent is.
“Moreover, you’re defaming my friends and colleagues. When you published a public website that rated one of my agents a 32/100, her friends saw it and called her to ask if business was bad. She’s one of the best in the city, but who knows how many potential clients saw your little website score and decided not to call her. You realize our reputation is a long-term, hard-earned badge for us, right? Did you even think of the hundreds of thousands of agents whose businesses you were assigning a grade based on a gimmick you threw together in a few months?”
D.S. Rupt: “We can fix it for your agent. She needs to go directly to our website and update. …”
Scrooge R. Estate: ”Stop. It.”
D.S. Rupt: “You just really don’t seem to like us. You want to block anything we do that’s new. We’re trying to make the consumer experience more vibrant, social and engaging.”
Scrooge R. Estate: “And we are trying to sell our clients’ homes. We have real people whose largest financial investments of their lifetimes are in our hands. They want to know that they can trust us for the long-term, and that we’re not just the next flash in the pan.
“Change for the sake of change is just a waste of my time and my clients’. They have kids, jobs, mortgages and friends. If your technology makes my life, or theirs, easier, then we can be friends. If it just disrupts my business for the hell of it, then I’m gonna send that turd burger back right back to you again, because we ain’t bitin’.”
Hyperbole aside, it’s important to remember that most of the time, technology folks, you’re asking us to buy something from you or change the way we do business. We’re willing to do both, but we view you as an impediment or a vendor, one or the other. Your work isn’t a charity business, and neither is our time.
If you’re planning on selling something to a real estate insider, start with the boring stuff.
- Will it add efficiency to the experience my clients and I have in a significant way? Flashy is fun, but most of us would choose an extra hour of free time over trying to reinvent the wheel.
- Does it work in a way that helps me, or my business, maintain a professional and consistent image? Our reputations take years to build, but minutes to tarnish. We don’t like to take chances because we don’t get to go find new angel investors when we screw up.
- Will it actually give consumers worthwhile information to analyze? Or, will it just create another distraction of questionable relevance? Techies love to talk about data as if it was the holy grail, but anyone who has studied statistics knows just how bad some data can be.
We don’t always have to be on opposite sides of the fence. Just realize that when you ask us to spend more of our money or our time on your new innovation, it has to benefit us directly. Tailor your speech to your intended audience, and you’ll find a lot more open doors.