Impatience, frustration, a fear of the unknown and a refusal to wait are the human behaviours that are now speeding up changes in real estate and there is big money behind it, according to real estate futurist, Brad Inman.
Inman - whose INMAN Connect conferences held each year in both San Francisco and New York are the largest in the world and have made a name for intersecting property and technology – was in Australia for the first time. He visited the CoreLogic Sydney offices to take part in a real estate roundtable with some of the industry’s top executives and thought leaders.
But he said the industry’s ongoing obsession with the technology and how fast it was changing, was the focusing on the wrong thing; instead, agents should consider what the current pain points are in buying, selling and leasing real estate, and then embrace the technology that resolves them and makes it easier to deliver great service.
We’ve summarised the key insights from his visit.
Fast and furious - Wall St versus Main St
Wall St played a significant role in the sub-prime mortgage crisis with leverage levels thrusting the US economy into recession. Undeterred, and in typical Wall St style, they then took advantage of collapsing real estate prices to buy up property as part of spreading their portfolio risk.
“But when they did that, they found out what a long and convoluted process buying real estate can be,” Inman said. “So they got a bunch of Silicon Valley entrepreneurs and they’ve been throwing money at fixing that process ever since.”
The outcome are well-funded venture capital funds actively identifying ways to speed up buying and selling property, and make it easier and less stressful for all customers.
“Wall St wants is not interested in a process that takes months – they want to transact with the click of a button, instantaneously and they are very invested in achieving that,” Inman said. “So unless you can out-fund Wall St, you need to stop fighting it and work out how to embrace it and the way to do that is put yourself in the mindset of the consumer.”
Examples of this include the rise of iBuyers that are now offering to buy property upfront, depositing the cash into your bank account within just a few days and allowing you to rent the property back until you find somewhere new.
“Now, sure, there may be criticisms that the price paid for that property might be lower than what the seller would get if they put it on the market, but think about the benefits,” Inman said.
“You don’t have to go through the process of selling – which can literally take months. You don’t have to pay for marketing, or have people tramping through your home for open for inspections, or deal with the legals and finance. You just get the money and you move on. That is very appealing for some people.”
Big data says you are who you say you are
Authentication of your identity is a major trend now driving change in real estate, Inman said, allowing more convenience to both consumers and agents, peace of mind, and flexibility.
“In the US, open viewings are typically for four hours on a Sunday and during that time, a whole bunch of strangers tramp through your house and look through your stuff,” he said.
“It’s inconvenient to consumers, it’s scary for home owners and it’s risky for realtors because we’ve even had realtors murdered.”
But biometric authentication dramatically changes that because by supplying passport or authorised ID and having it checked against criminal records and matched with your finger print or even eye scan, means potential buyers are known quantities.
Inman said companies such as Trust Stamp and Clear are now conducting this kind of information assembling, allowing authenticated individuals the option to inspect a property whenever they want (even without an agent present) through finger print coded locks. (check out OpenDoor).
The end result could speed up the back end transaction, especially if identity checks are married with credit information. And team this change up with paperless transactions and digital signatures and key pain points in so many property transactions start to dissolve quickly.
“We need to get rid of filing cabinets,” Inman said.
Technology is changing the expectations of agents about their franchises
With technology making life significantly easier and frictionless for consumers, agents themselves are now expecting the tech they use will make their lives easier. This is a significant challenge for franchise groups with legacy technology and is calling into question the old franchise model.
“The realtor groups that are trying to force their people to stick to old models of doing things are struggling and that is raising the questions of how should franchise groups define themselves. Are they technology companies? Are they listing businesses? What is the value that the franchise groups bring to their agents? No one has the answer, but it’s a hell of a question.”
Inman said that the technological disruption was being paired with a behavioural disruption, encouraged by a new generation of agents coming into the picture – Millennials.
“Leadership has always been from the bottom up and what we see in real estate is that top down models are now being displaced by a generation of people who are used to working in teams,” Inman said.
“Millennials like experts, they like teams, they like to collaborate, but they want to use expertise. So in real estate, they like using an agent because they value expertise, but as realtors, they expect a certain fearlessness from their leaders.”
Inman said a major study that Inman Connect has just completed identified that realtors want their leaders to confront disruption, be more responsive and take a position on issues of importance.
“We need to change the leadership equation,” he said. “The job of a leader is to serve – that’s something that many of today’s leaders find a challenge. As an industry, we are wrestling with a new paradigm for leadership – one that is about embracing innovation, not fighting it.”