As the old saying goes, the right real estate agent could sell ice in the Arctic. The ability to connect and convince clients of a property’s worth, or to help them buy a house, has always been important. And while people skills will always be central to the business of real estate, another necessary new skill set is emerging in the 21st century: tech skills.
It’s not just the ability to code that I’m talking about. It’s the ability to understand emerging technologies and how to strategically deploy them to survive and thrive in the business. That’s because like every other industry, new technologies and business operations are being adopted to become more efficient. Examples include business intelligence and machine learning.
As Jim Berry of Deloitte & Touche told Forbes, real estate’s mantra has shifted from ‘location, location, location,’ to ‘location, experience, analytics.’ It’s what happened in the travel sector and the trend holds in a number of formerly person-forward fields.
The value of being able to predict what, and who’s next
“Predictive data” is an example of a tech trend that’s transforming the industry. It’s used to identify property trends, including price fluctuations, popular neighborhoods, and more — and real estate companies have several options in terms of how they choose to collect that data.
Some real estate groups are adopting external programs or working with consultants to do this. Others, such as Constellation Real Estate Group and Lovell Minnick Partners, however, are choosing to acquire predictive data firms – but what’s the advantage?
When Constellation Real Estate Group recently acquired the predictive data firm offrs, they didn’t just expand their services or increase their business’s value. Rather, the company transformed an outside service into an in-house specialty. Offrs specializes in lead generation, CRM software, MLS and transaction services among other key real estate services.
Offrs’ system uses 250 data points to determine which homeowners will list their properties in the next 12 months, and they can accurately predict 70 percent of listings. That allows agents to be first in the door to acquire clients and to perform preemptive outreach to prospective buyers they think will be a good fit for the property. Knowing who’s about to sell and being first in the door is critical to firm growth because 75 percent of buyers only interview one real estate agent.
In a similar vein to Constellation’s acquisition, Lovell Minnick Partners, a private equity company, acquired the real estate data and analytics company ATTOM Data Solutions in early 2019. ATTOM’s system includes extensive neighborhood data, including public and private school information, which is often a primary driving force for buyers.
It can also point to other points of interest in any community, and is marketed to real estate professionals as a way to save marketing money by allowing agents to target the right neighborhoods with their services.
At a time when homebuyers are increasingly environmentally conscious, ATTOM’s system also allows real estate agents to share area environmental hazards, from air quality and superfund sites to relative hurricane risk, which could give niche real estate agencies a key advantage.
As with any industry, information is power.
Real estate agents don’t need to be tech professionals, but they do need to be more tech savvy than their predecessors. Most importantly, they need to know how to manage their data.
For its part, Constellation addressed this need by essentially purchasing the talent. They acquired a silo of data specialists.
But other smaller agents will need to learn how to understand how to use and manage data for themselves. Agents are going to be expected to grapple with data on their own using various research tools.
One way to do that is by encouraging emerging agents to pursue an online degree in the form of a Master’s in Business Analytics, or a “MSBA”
A MBSA is designed to give those outside of the tech field the tools they need to manage data systems and grow their business, something virtually every small professional today needs to be able to do.
Along with leveraging large data sets properly to grow, data security is also going to be a big and important skill set for real estate industry to foster within its staff ranks. That means that companies using all this data needs to guard it and tend to it both for their own business needs and for client protection. Think about all the big data breaches that have been happening over the past decade and how those breaches have undermined consumer trust of those companies.
That’s a nightmare no brokerage wants to happen to its brand.
In addition to addressing internal IT capacities, real estate groups are looking to leverage untapped talent markets when hiring in an attempt to bridge the skills gap.
“Ethical hackers” could provide invaluable skills, and onsite and offsite training programs could help build key technical skills even among those without college degrees. In today’s day and age, specialized tech skills are more like trades than degree fields and the skills can be taught in isolation on an as needed basis.
Investment’s big data needs
Commercial real estate companies and real estate investors are facing the most significant learning curves when it comes to technology, and that’s because properties themselves are changing.
In particular, asset intelligence such as smart home sensors are making it easier for investors to predict maintenance needs and manage repairs in multi-unit buildings. This allows them to get ahead of major issues and keep costs down. Other investors are tapping into public data streams to identify opportunities for redevelopment of underused properties.
Big data established its dominance in other fields years ago now and real estate is just catching up. Without a deeper bench of tech experts, the field will continue to lag behind similar industries.
It’s time for real estate professionals to take a step back from the client-forward side of their business – they’ve mastered that — and evaluate how they can embrace new technology.