The Era of Disruption
Airbnb didn’t just provide an alternative to hotel rooms; it bulldozed through, leaving the hotel industry counting its losses. Uber didn’t politely share the roads with taxis; it raked them over the coals. Netflix shuttered video stores and threw them a farewell party, red carpet and all. And Facebook? It revolutionized everything from communication to elections. Disruption, a radical change to existing industries due to technological innovations, has defined the modern era, transforming the way we live, work, and play.
Although the real estate industry has seen some disruption over the last 20 years, it functions much the same as it always has. Consider yourself warned: Monumental disruption of the real estate industry is a certainty. The size of an average financial transaction and the numerous professionals and companies earning a fee or commission on each transaction have investors chomping at the bit to take a big bite out of the pie.
Real Estate Disruptors: Successes and Failures
Real estate has already faced disruption. Zillow burst on the scene early on, successfully becoming the number-one tool consumers use to browse homes for sale, effectively burying REALTOR-owned portals. Zillow didn’t just leverage that advantage, it seized with a vengeance, capturing homebuyer leads and selling them back to the real estate agents who provided the juicy listing data that attracted those leads to their site in the first place. Zillow also introduced the less successful algorithm-based home valuations with the Zestimate tool, a tool that most homeowners are aware of but realize is vastly inaccurate.
Disruption has occurred in the investment sector of the real estate industry, too, in the form of iBuyers such as Opendoor and Offerpad (Zillow also briefly threw their hat in this ring). iBuyers are companies that offer cash to purchase homes quickly from homeowners, usually sight unseen. These companies rolled the dice, and let’s just say it didn’t end well. They thrived for a moment in time when prices were surging, but have crashed and burned, costing them billions. Homeowners had caught on fast – the open market was their goldmine. The iBuyer proposition was more of a losing lottery ticket for them. Quick cash? Sure. But at what cost?
What Does the Future Hold for Real Estate?
When disruption comes from outside of the industry, it aims to put industry professionals out of business. The million-dollar question for every industry is: Is AI the job market's Grim Reaper? Well, some jobs are already being plucked by the hand of AI. Overall though, I firmly believe that AI will not replace skilled workers; instead, those workers who leverage AI will rise to the top. I guarantee that conversations and innovations are happening right now that are aiming to replace real estate agents' job functions with technological solutions, but if we as an industry act fast, we can be in the driver's seat of this revolution.
Today, much of a real estate transaction takes place online. Online MLS platforms, virtual home tours, and e-signature functionality have driven the real estate industry forward and made transactions more efficient. Disruptors from outside of the industry are imagining a scenario in which nearly the entire transaction process occurs online without a dedicated real estate agent to support a consumer. (Spoiler: never going to happen!)
Imagine you make your offer based on an algorithm-based valuation, the homeowner makes a counteroffer, and you negotiate a deal. How do you know if it’s a good deal? You are digitally guided through the contracts and due diligence as well as your home loan and title processes. Who do you ask about complicated provisions? You complete the transaction and pick up your key from the lockbox on move-in day. Who advocates for you if the home is left in substandard condition? Presumably, you call some sort of customer service line to speak with a licensed real estate agent (raise your hand if you want this job) who can give you advice - but who is not intimately familiar with you or your transaction.
We’ve all danced with these digital processes and know it’s a frustrating tango. This often leads to phone calls with customer service, rife with even more frustration. No one wants to transact real estate this way. This is the largest and most emotionally charged financial transaction of most people’s lives.
In the near future, I see developments such as land title systems moving to blockchain and digital transaction platforms becoming mainstream and streamlining the home buying and selling process to the huge advantage of consumers. But the biggest leap forward that we need to make right now, is freeing up the agent to be more present and available to their customers.
Advisor vs. Algorithm: The Human Touch
When dealing with finances and legalities, consumers want advisors such as real estate agents, accountants, and attorneys who are experts in their fields and who are deeply familiar with their own unique situations. As advisors, the best service that we can offer our clients is born out of easy access to us, our connections within our industries, and our impeccable follow-up and follow-through.
The work of a real estate agent should entirely focus on two things: deep connection with our communities and deep knowledge of our markets. The traditional real estate business model says everything else should be delegated, and I agree in principle.
The traditional model goes like this: To scale, an agent should first hire an assistant and a marketer, and build a team. That team should implement systems and automate processes using technology. The more they sell, the more people and systems they add. The problem with this model is that before you know it, this agent has become the CEO of a small business, bogged down and distracted by operations and struggling to carve out enough time to do the only things that create revenue - connecting with people and putting together deals. Consumers notice that details slip through the cracks and follow-ups are forgotten and it hurts the reputation of the agent.
This isn’t good enough to ward off outsider disruption. The brokerage community must step up and support our agents to change how they work. Gone are the days when agents would agree to willingly split their commissions and pay desk fees for nothing more than the use of a logo and weekly team meetings. Broker owners have the resources and abilities to drive real change and transform our industry for the better, and we must do so, now.
Rethinking the Traditional Model: Brokerage 3.0
Agents don’t want more shiny objects or seminars that promise to make them better. They’re already great. What do agents want? They want their time back. They want real, skilled human support. They need people who get things done beyond their expectations and, most importantly, whom they don’t have to manage. They want to scale their businesses without being bogged down by operations.
This is where brokerages have a chance to shine. Agents are the backbone of the industry. If we can eliminate the functions of an agent’s job for which they are not uniquely qualified, we can hand them back the time to do what they do best: connect and sell. This is how we all win. We must disrupt our industry from within and use our intimate knowledge of these challenges to provide far greater value to agents and their customers than tech disruptors from outside of the industry possibly could.
SERHANT. & S.MPLE: Revolutionizing the Agent's Work
At SERHANT., we’re doing exactly that with our newest innovation: an app aptly named S.MPLE. This easy-to-use platform allows our agents to request a task be done, track its progress in real time, and communicate with support staff through task completion. It learns an agent’s preferences for how they like things to be done, streamlining further with each use. With S.MPLE, real humans, empowered by AI, complete tasks at a level that exceeds agents’ in-house support staff in a fraction of the time. S.MPLE clears an agent’s schedule of busy work like `completing CMA’s, creating marketing, and scheduling showings so they can do what they do best - connect with their communities.
SERHANT. is committed to relentless innovation in pursuit of “Brokerage 3.0;” the brokerage of the future. We keep the competition on their toes. We know that to stand as industry titans in the future, we must lift our agents up and enable them to do only what they do best, supporting them in any way possible to get out from behind their screens and in front of opportunities. S.MPLE represents SERHANT.’s next big push to transform how we work, a challenge that we are attacking full-force every day in pursuit of our promise to disrupt for good.