What should the individual agent do when confronted with the swirl of funding and iBuyer activity and talk of massive change within the industry?
Brad Inman’s Connect San Francisco 2018 talk with Gary Keller, co-founder of Keller Williams, about the future of our industry already has its place in real estate history. Inman was correct when he noted that the lion roared that day and showed that in this era of disruption he was going to make his stand for the agent and would not be going quietly into the night.
That talk shook the earth for many in our industry. So many of us had already been thinking about the seismic changes that would come at some stage in the distant future, and suddenly we were wondering what our own business would look like in 2020-2021.
As 2018 gives way to 2019, I thought it would be useful to reflect on the near-future of our industry both from a 30,000-foot perspective and, most critically, from the perspective of agents simply looking to protect their individual business.
First, let me summarize Gary Keller and Brad Inman’s core agreement because it will provide us with a shared understanding of the terrain we face: “The near-future will be a battle between the tech-enabled agent and agent-enabled tech.”
It is as simple as that. The details are complex but the choice is clear. Which vision wins out will have far-reaching consequences for the approximately 2 million real estate licensees in the U.S. and their families and communities.
The era of the agent able to survive without using tech has been over for some time. Similarly, the likelihood of the majority of real estate transactions being conducted without agents, seems to be incredibly low.
That leaves the field open to the competing visions of the tech-enabled agent and agent-enabled tech. The game is afoot and disruption is at hand.
At the 30,000-foot level, the past year has seen an acceleration in disruption across three broad categories:
- A frenzy of mergers and acquisitions fueled by monies flowing from the worlds of finance and tech. Three of the biggest players in this space are Compass (funded by venture capital money, particularly from Softbank); Realogy (NY stock exchange listed $5 billion) and Berkshire Hathaway (run by Warren Buffett).
- The growth of new and expanding brokerages with a tech-heavy emphasis. In this category you have the virtual brokerage eXp making waves, and of course, Wall Street darling Redfin. You also have companies like Zillow toying, more openly, with the idea of seeking a piece of the real estate agent’s commission.
- The rise of iBuyer programs and companies. Their goal is to give the seller an offer on their property within minutes based on a computer-generated valuation program.
What all of these categories have in common is that funders inside and outside the real estate sector see transformation and disruption coming and want a piece of the action.
So what should the individual agent do when confronted with this swirl of activity and talk of massive change within their industry?
This is really the key question of our time.
Too many agents are reacting to the disruption either by sticking their heads in the sand and pretending it does not impact them or becoming fatalistic and disheartened by the speed of change and assuming they cannot control their own destiny.
I would submit that neither approach is warranted and that agents must apply the same vigor to determining their place in our disrupted sector as they have in improving their sales skills in years past.
After all, disruption is real, impactful and inevitable, but there will also, quite clearly, be many roles for agents in the next iteration of the real estate sector. As Keller and Inman noted in San Fran, pure tech will never be the future of real estate transactions.
So what specifically, tactically, do I recommend real estate agents do in 2019 and beyond to ensure that they have a business worth running two or three years from now?
- Keep on top of the trends in our industry: Read, listen and engage with the people who are looking to discuss the future of our industry in a smart way. I know you already read Inman, but also look for content from other influencers and commentators following these trends.
- Be purposeful about your choice of brokerage: Inertia, a lack of motivation to move or the ease of parking are not good criteria to pick your broker. Agents must consider what agency will best equip them to survive and thrive in a disrupted industry. There are no wrong answers to this question. What is crucial is the process — agents need to determine what their business needs and what brokerage will provide them with the tools that they require.
- Think ahead: Develop an individually tailored five-year business plan that seeks to outline key components of the agent’s business, acknowledges the challenges faced by tech and lays out a road map to address those obstacles.
I believe, to my core, that we owe it to ourselves, our families and communities to act on these three points. If I could add a fourth, I would suggest that we keep clear in our heads that our business interests might not always align with those of the brokerage where we hang our licenses.
Some time ago, I left a company that has been growing significantly as of late. When I did so, it was with two thoughts in mind: the company would be very successful, and its success would not necessarily translate to my success, and that for my business to succeed I needed to move.
I urge my fellow agents to seek knowledge about our changing field, consider how it impacts us, and be purposeful in determining what changes we need to make to survive and thrive in this new era.