By Kate O'Toole
We must adapt to survive – as humans, as business people, as brokers and as Realtors®. The real estate profession continues to evolve with new trends, technology, business models and consumer mindsets. So, what happens after “What Happens Next?” Who will adapt, and who will be left behind?
At the annual T3 Summit, which took place May 6 to 8 this year in San Diego, industry leaders discussed the future of the profession as we face some of its most transformative changes. Summarized below are some of the main points made by the innovative real estate thought leaders who sat down at the T3 Summit for a one-on-one chat with Stefan Swanepoel, chairman and CEO of T3 Sixty.
Consumers want simple, fast transactions. They want to eliminate the hassle and complexity of the real estate transaction, and they want everything on-demand. If brokerages and agents don’t listen to what consumers want, homebuyers and sellers will go elsewhere.
The consumer’s desire for a simpler transaction has paved the way for iBuying, a new business model for buying and selling homes. According to Opendoor’s website, “An iBuyer is a company that uses technology to make an offer on your home instantly…How iBuyers operates varies, but the underlying idea is that a company estimates the value of your home and makes an offer. If you accept, they take on the burden of owning, marketing, and reselling the home.”
Seven or eight years ago, hotel executives thought Airbnb was not a threat, but they said recently they were wrong and did not understand the consumer insight, said John Peyton, CEO of Realogy Franchise Group. According to Peyton, iBuying is the Airbnb of real estate and is a trend, not a fad.
Although this trend has the potential to disrupt the process of how real estate transactions take place today, that doesn’t mean that real estate agents will no longer be used. According to Glenn Sanford, co-founder and chairman of eXp Realty, the percentage of transactions using real estate agents may drop from 90 to 60 percent in the “tech-mediated future,” but agents will still be essential.
Glenn Kelman, CEO of Redfin, said that while iBuying may eventually be less than 10 percent of the total real estate market, it is still very real.
Tech and Data
According to Rich Barton, co-founder and CEO of Zillow Group, the real estate tech revolution is happening, and it is finally time for “Real Estate 2.0.” At the center of this revolution, he said, is data.
By gathering data on consumers and being able to analyze and identify trends, leaders will stay ahead of the curve and be able to take advantage of the marketplace. Barton said Zillow is moving from being a media company for search and information to facilitators of a transaction.
Gary Keller, co-founder and CEO of Keller Williams Realty, said big data is the foundation where artificial intelligence (AI) lies and enables countless opportunities for data to be utilized in different ways. To deliver what consumers are increasingly expecting in a transaction, agents and brokers are going to need data and powerful technology.
Keller also said brokerages should be building their own full-service technology platform for their agents, rather than outsourcing to another company and having its agents spend money on other fragmented tech. By the first quarter of 2020, he said Keller Williams agents will have big data and an AI platform – all voice-activated.
Barton also said Zillow is investing in audio, that Airpods will play a stronger role in the future, and that “audio is the new virtual reality.”
Technology and data will change the way agents do business and the way customers have a unique, customized and simplified experience.
If brokerages want to compete with tech companies that are moving into the real estate space, they will need to partner and share data in larger pools.
According to Robert Reffkin, co-founder and CEO of Compass, agents need brokerages less every year. He said that while agents are loyal to their manager and the support of their brokerages, they are more loyal to their family and entrepreneurial passion. Reffkin said brokerages need to be smart and more willing to change and partner to be successful.
While Compass’s focus is on agents, brokers debate whether their primary customer is the agent or the consumer, and a shift in focus toward the consumer is taking place.
Sanford said brokerages need to find better ways to connect with their communities and agents digitally. He also said brokerages must rethink how to engage with consumers and consider the next level of consumer engagement.
The real estate industry needs to find ways to work together – with top tech companies, with brokerages and with agents – to ensure the satisfaction of the consumer and the future of the real estate industry.
To learn more about what was covered at the summit, read the T3 Executive Notes at NVAR.com/t319.
T3 Sixty Recommendations
Leaders need to practice five simple, difficult qualities to successfully disrupt themselves:
- A willingness to discard some of the existing.
- The talent to identify what is around the next corner.
- The ability to move quickly, and then accelerate into what works.
- The fortitude to act with confidence.
- The ability to inspire those that follow you.