I was listening to the Buggles tune, "Video Killed The Radio Star," in my car the other day, and the song resonated with me, especially after a few articles I had read earlier that day about tech and real estate.
Everywhere I turn, everyone is talking about how tech is transforming the residential real estate industry. From algorithm-based pricing decisions, to digital staging, to virtual listing platforms, everyone seems to believe that the real estate industry is deeply in need of transformation and that tech is the answer. But why the need for transformation, and is tech really the answer?
Let's first start with the why - why does everyone believe that the residential real estate industry needs to be turned on its head? Is it because most brokerages have inefficient operations? Sure. Is it because there are some sub-par agents that give realtors a bad name? Always. Could it be that the client experience needs to be improved? Of course. But if we are really honest with ourselves, it's because of the money. There is a lot of money to be made as a realtor, but there is even more money to be made from realtors - and eventually from replacing realtors. That's what I think is really driving this push toward tech.
Already, the process of selling a home has undergone a huge transformation with the advent of all of the digital listing services that are available today. These platforms have successfully convinced many homeowners that selling their home is as easy as taking a few pictures on their phone, tapping out a description and uploading it to an online database. Sadly, most homeowners find out the hard way that selling a home isn't as easy as selling a car. And in the end, it doesn't appear that these platforms have done anything to improve the client experience, and they certainly haven't helped to improve brokerages' operations or to raise the bar of the profession. In fact, the only transformation I can see is that realtors now have to buy back their leads from these platforms when they used to get them for free. So, how exactly has this kind of tech improved the experience for the client or the realtor?
One could argue that these listing platforms have improved the experience for the buyer, and if by experience, you mean endlessly surfing through pretty pictures of homes, yes, it is nice for a buyer to be able to do that from a single website. But, after that, the experience starts to take a bad turn. The buyer experiences disappointment because the info on the site is out of date, and the home that they fell in love with was sold last year. Or, if the home is still for sale and the buyer takes the time to see it, the home ends up looking nothing like the pictures because of photo shopping and digital staging (where furniture is digitally inserted into the photos). Again, how is all of this tech really improving the buying experience? The realtor has wasted his or her time showing a home that might never have made the list but for the pretty but deceiving pictures, and the buyer (in addition to wasting his or her time too) is left with disappointment and a bad opinion of the real estate industry.
But not every experience that starts on one of these online platforms ends badly, so let's move on to the offer stage. Now comes another piece of tech meant to transform the real estate industry: algorithm-based pricing. That's where a computer crunches a bunch of data from public sources (because the only prices that really matter are the ones that get reported to taxing authorities anyway) and spits out a recommendation on what price to offer, etc. So, now the realtor has abdicated his or her judgment to a computer. The only problem is that what price to offer for a house is NEVER just about the sales data. So much goes into the decision-making process that can't be factored into any algorithm, but the most obvious data that can't be crunched by a computer is the buyer's NEEDS. That's where a great realtor adds value: Listening to their client and crafting a buying strategy that meets all of their needs on price point, down payment, monthly payment, etc. while also meeting all of their personal needs (i.e. getting moved before the baby is born or school starts in the fall, negotiating for post-closing possession to allow for a seamless transition to the next home, etc.). As far as I know, there isn't any tech currently that can crunch all of that data, and for realtors' sake, I hope there never will be.
In the meantime, my only advice to my fellow realtors is this: As you get bombarded by more and more technology and platforms and services, please take a minute to turn down all of the noise and ask yourself these few basic questions:
1) Will this tech cost me more money or make me more money?
2) Will this tech improve my client's experience or diminish it?
3) Will this tech, if it is ever perfected, enhance me as a realtor or end up replacing me?
If you can foresee a scenario where any new technology or platform could be used to replace you as a realtor, do yourself (and your clients) a favor and stay away from it. Don't buy it, don't support it, don't even stay neutral on the issue. We as realtors won't end up like the radio star unless we participate in our demise by supporting technology whose end goal is to replace us.
