• Tech hasn't overcome the obvious logistical barriers to replacing Realtors.
  • Personal allegiance seems to be undisruptable.
  • Smart money is building allegiances instead of trying to break them.

Two great conversations came across my inbox this week in the realm of real estate technology. They’re topics that are older than Inman (20 years, if you’re counting), and still just as timely.

Is the ‘irreplaceable Realtor’ a myth?

Rob Hahn penned a detailed post questioning the existence of the “irreplaceable Realtor.” It described the portion of the Realtor population that is susceptible to disintermediation by technology (or outsourced labor). Read the comments as well as the post because the discussion is really insightful.

The gist is that Realtors who can only facilitate a normal transaction are replaceable cogs in a process. Counselors with education and knowledge who are experts in exception — unique problems, irregular negotiations and last-second emergencies — cannot be replaced by an algorithm or an app.

Mediocre facilitators outnumber the valuable counselors heavily, though, and cause the industry great liability.

The person who fixes the mess

This dovetailed nicely with Brian Boero’s recent post about “the mess.” It focuses on the deal doctor. That’s the person who makes things work when everyone else wonders what happened to the greased transaction track they were supposed to be passengers upon.

The mess of the real world is what defines great Realtors. It’s what allows them to rise above a piece of software or a transaction coordinator.

That mess is the mud-filled moat that keeps real estate labor disrupters from succeeding. It’s what makes consumers hire a Realtor, an attorney or a consultant when their world is in flux.

If everything goes smoothly, they might be able to get away with a replaceable static cog. When their world tips on its axis, though, the malleable expert is worth every penny.

The mess is obvious to those of us with sales experience. Yet it’s regularly ignored and has led to the failure of tech ventures in real estate.

People trust the known entity

It’s not the only obvious factor that tech often misses. Human allegiance is probably the single greatest reason that businesses who seek to minimize the labor in real estate transactions fail.

Pressmaster / Shutterstock.com

Pressmaster / Shutterstock.com

People will do business with people they know. They’ll do it even if it’s more expensive, more time-consuming and logistically more difficult. Friends who live three cities away call us to list their homes. Clients we haven’t worked with in years seek us out.

They ignore the obvious enticements of ads by their neighborhood’s top producer, the company offering them on-demand showings and the thousands of dollars in rebates offered to them across the Web. That’s often because they place so much trust in the insights and skills of their agent — the known entity.

Sometimes, though, they simply choose an agent because they feel obligated. That’s not said out loud often, but there are plenty of repeat agent-client relationships built on psychological pseudo-compulsion. The brother, cousin, co-worker, neighbor or past client simply don’t want to rock the boat.

Working with the known entity keeps things amicable. Call it allegiance or guilt. Whether it’s ideal, it’s the reality of real estate.

Can technology break the bond of personal allegiance?

So how can technology possibly break through the bond of personal allegiance — whether it’s love, trust or just a feeling of obligation? It doesn’t seem like it can.

Huge numbers of consumers use tech tools from one company but call their favorite agent at another company to represent them in a transaction. By and large, personal allegiance seems to be undisruptable.

Tech has to adopt the concept of human allegiance instead of trying to break it. Innovators in real estate bog down in that moat of mud when they try to wedge advertising and discounts in between agents and their clients. It works in a few cases, but on a large scale — it’s a failure.

Some tech companies have been getting that message. The most successful portals and hybrid brokers are investing more in human value. They’re hiring the agents, brokers and industry pros who already have the trust of their peers and the consuming public.

They’re buying allegiance. That’s not foreign to real estate. The top agents in your market probably cold called, knocked doors and gave gifts to build their businesses the traditional way. They built — and bought — allegiances.

Tech companies can disregard the mess. They can ignore the durability of the individual relationships that 1 million Realtors have with their spheres of consumers. They can keep believing in the killer app or discount model that will overcome those barriers and break the industry’s labor model.

Smart companies are figuring out that those aspirations might just be white whales. To survive in this industry, they’re adopting a chapter out of the traditional playbook. They’re building allegiances instead of trying to break them.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.

Email Sam DeBord.

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