This article was shared here with the permission of Mike DelPrete for Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.
Real estate has a last-mile problem. Despite advances in online lead generation, tech platforms, emerging AI assistants, and disruptive new models — an agent is still the necessary bridge to a consumer. Watch a clip of me outlining this phenomenon during my Inman Connect keynote below.
The last-mile problem is a concept that comes from logistics and transportation.
- Getting goods from a factory to a warehouse, and from a warehouse to a distribution center, is the easy part.
- The difficulty comes with the final delivery — the last mile — where the experience is uncertain, complex and expensive.
Real estate’s last-mile problem is similar — you can buy thousands of online leads, invest millions into building a tech platform, and use predictive analytics to score how likely a lead is to transact.
- But you still need an agent to pick up the phone, make a call and build a relationship with a consumer.
And that’s why the biggest players in real estate are working with agents, and not trying to dis-intermediate them.
- Zillow’s Premier Agent and Flex programs keep high-quality agents at the center of the transaction.
- And now Opendoor is pivoting back to agents with a significant marketing and partnership campaign.
Online real estate companies probably wish agents weren’t necessary and that they could go directly to consumers — and agents probably wish the online disruptors would just go away.
- But both forces operate in a tentative equilibrium, not necessarily liking each other, but able to work together to achieve a common outcome.
- Which leaves real estate agents as the last-mile solution — the unavoidable, indisputable, and irreplaceable central part of the transaction.
Watch my entire keynote, Pandemonium, to hear more about the industry’s Netflix vs. Blockbuster moment and what a receding tide reveals about business models and true intentions.