Jay Thompson is a former brokerage owner who spent the past six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Last week, Teresa Boardman’s column “Why the tech revolution has been overhyped“ caught my eye.
Although I agree with her overall premise that technology hasn’t changed the day-to-day fundamental operations of the real estate business, there’s no question that, in my opinion, advances in technology have changed many aspects of the real estate transaction — from the perspective of both the real estate professional and the consumer.
It seems undeniable that technological advances over the past 15 years have increased the efficiency of how we all operate.
This reaches well beyond the demise of the fax machine — and for those increasingly rare instances where someone demands a fax, use any of the dozens of e-fax solutions out there.
Software and cloud platforms have made office management, a task I dreaded from Day 1 as a brokerage owner, much easier.
One small example: Completing 1099 tax forms for my agents was a pain. Yes, part of that was my lack of experience. But only a couple of years later, new services enabled me to click “save,” and then “share” and securely send a file to my CPA who then electronically processed and delivered those pesky 1099s — no sweat, no pain, no paper required.
Technology has provided the most change and efficiency for agents and brokers in the area of advertising and marketing.
The World Wide Web is exactly that, world-wide, and it provides our business with more reach than traditional newspapers. Agents used to spend small fortunes running classified ads in newspapers — a medium that spent more time in the recycle bin than in consumers’ hands.
Today, ads reach highly-targeted audiences anywhere on the planet, for pennies on the dollar when compared with print ads.
I once had a listing that I knew would appeal to certain Canadians, who thanks to a strong Canadian dollar at the time were looking hard at Phoenix real estate. Thanks to the scope and efficiency of the internet, I was able to market that property in several major metropolitan areas in Canada for a fraction of what it would have cost just a couple of years earlier.
The consumer’s perspective
OK, so there have been some technology breakthroughs and advances that have helped agents, primarily with regard to marketing expense and reach.
But what about the consumer? In retrospect, what has technology changed for them?
For starters, technology in the past 15 years has fundamentally changed how consumers search for homes. Although some would relish the thought, the simple fact is the internet and the consumer need for information isn’t going away.
Just because one can’t find every answer on the web doesn’t mean it’s not changing the agent-consumer relationship. The National Association of Realtors reports that 44 percent of homebuyers first look for properties on the internet. Only 17 percent first contact an agent.
Just 15 years ago, very few buyers looked on the internet. Where will they look 15 years from now?
Just three years ago, no one had ever heard the word, “iBuyer.” Now billions of dollars are being sunk into iBuyers, and “traditional” brokerages and franchises are jumping into the game.
Don’t get sucked into the, “iBuyers will fail when the market shifts” mindset. Just because Foxtons and a few other “alternative models” have failed in the past doesn’t mean all new models are doomed to the same fate.
IBuyers currently have a 6 percent market share in Phoenix, which was pretty much “ground zero” for iBuyers. Six percent may not sound like a huge number, but Phoenix isn’t exactly a small market either. Just keep in mind that 6 percent was closer to zero just a couple of years ago.
Just today, while I was writing this column, a “partnership” between Realogy and Amazon was announced. While this doesn’t appear to be Armageddon Day — when Amazon enters into direct real estate sales — it is an indicator that big (really big) tech players are looking at the real estate space. Of course they are, it’s a multi-trillion dollar industry. Everyone wants a slice.
All this tech, nothing really new?
In case anyone is thinking all this so-called technology is nothing new, keep in mind that when I got licensed in 2004 — just 15 years ago — there was no Facebook, no Instagram, no YouTube, no iPhone, no GPS, no iPad, no touch screens, no cloud servers. Concepts like artificial intelligence and virtual reality belonged in the Star Wars movies.
Fifteen years is not a lot of time. To dismiss technology because it hasn’t reached the point where you can buy a home with an app from the comfort of your couch and move in tomorrow is short-sighted. Tech has made remarkable inroads over a very short period of time. There’s no question that it will continue to rearrange the fundamental economics of our industry.
Will “technology” ever replace real estate agents? Personally, I don’t believe so, though the term ever is a really long time.
Just a couple of years ago, how often did you hear these terms?
- Data science
- Big data
- Artificial intelligence
- Machine learning
- Virtual reality
- Augmented reality
- Internet of things
Like it or not and ready or not, the ambitious engineers, entrepreneurs and dreamers driving the tech world never rest. They will continue to tinker with the economics of the industry until they hit the jackpot for their business model.
How they might impact real estate remains to be seen. But I’d exercise caution — don’t categorically write it all off.
But don’t be afraid either. Change is the only thing that remains constant, so stay up to speed, stay open-minded, and be ready to always examine and evaluate emerging technologies and their impacts and how you can leverage it for your business and your clients.
Dismissing emerging technologies, on the other hand, seems full of pitfalls.
Yeah, maybe the “tech revolution” is over-hyped, for now. It’s not sitting still though, so dismiss it now at your own risk.
Jay Thompson is a real estate veteran and retiree in Seattle, as well as the mastermind behind Now Pondering. Follow him on Facebook or Instagram. He holds an active Arizona broker’s license with eXp Realty.