It’s not just Uber. If you are engaged in a consumer-driven industry, then disruption is part of your world — and that includes the real estate industry.
What other cues should we take from disruptive technologies and business models? If there is one business model that is ripe for being disrupted, it’s the traditional real estate brokerage:
- Brokerages report low consumer satisfaction.
- Brokerages are inefficient on multiple levels.
- Brokerages are not always profitable.
Yes, buying a house is much more complicated and expensive than booking an Uber ride or purchasing a Starbucks coffee. However, the point is that the consumer drives our economy, just like the transportation and coffee-to-go economies.
Companies embracing the consumer and taking great pains to deliver a satisfying, efficient and consistent experience will always win. Yes, real estate transactions are complicated. Focusing on the consumer is not.
There are significant opportunities for agents and brokerages to minimize and, eventually, eliminate such occurrences.
What are we doing wrong? Let’s take a look at some of the things that happen before, during and after far too many real estate transactions.
- I have personal stories of being unable to get an agent, both on the listing and buying side, solely because I was 12 to 18 months out from moving. Some may believe my expectation level was too high and I should’ve been satisfied with an impersonal drip email campaign. But I believe more personal attention is necessary regardless of someone’s timeline — and especially for pricier real estate transactions.
- During a home transaction, consumers rely on multiple parties to perform any number of tasks. It’s not just about the agent. It’s about the home appraiser, the home inspector, the loan officer, the settlement provider and so on. Any one of these folks can impact the consumer experience negatively. Consumers can only hope that each party does a good job … with the agent involved at each step, protecting their interests. I know there are many opportunities to streamline and improve the transaction for both consumers and agents.
- What about the client relationship post-closing? After a transaction is over (and let’s not forget that multiple people made thousands of dollars), would it be too much to ask to stay in touch, thank the consumer for their business and continue providing value for them in the future?
As an industry, we know there are multiple challenges complicating matters. Government regulation, board rules and fragmented technology providers muddy the waters. And the ubiquitous independent contractor mentality, plus fear of change and outright ignorance, all make disruption difficult.
Many in the industry willfully hide behind those challenges, believing the industry is too complicated and regulated to change, and that eventually interlopers will disappear.
We only have to look at the past to see that this attitude never works. There are numerous examples of disrupters to be found: Re/Max, Keller Williams, the Internet, email, Internet data exchange (IDX), Zillow and Trulia. For the most part, these disrupters have improved the industry. But what happens when a future disrupter changes everything … and we aren’t willing or able to adapt?
We must continue innovating and meeting consumer needs, or we risk ceding our livelihoods to someone — probably someone with lots of venture capital — who figures it out and leaves everyone else scratching their heads and losing clients.
Jose Perez is the founder of PCMS Consulting.