Real estate agencies can turn to technology to help them build trust with clients and maintain them as life-long supporters, according to an industry expert.
REACH Australia Managing Partner Peter Schravemade said recent studies from Roy Morgan and the Governance Institute of Australia showed many Aussies don’t view real estate agents as honest or trustworthy, but there was a lot that could be done to alter that perception.
“Those in the industry and working closely alongside real estate agents and property managers, know that the overwhelming majority are well trained experts that do the right thing 100 per cent of the time, are there to help their clients and are damn good people,” he said.
“It’s the mistakes of a very small minority that have tarred the industry with the same brush.”
The challenge of trust in real estate
According to research from Roy Morgan, released earlier this year, real estate was rated the third lowest profession when it comes to trust, with only car salesmen and advertising scoring lower.
“Just 5 per cent or 1 in 20 Australians rated real estate as high or very high on ethics and honesty,” Roy Morgan Chief Executive Officer Michele Levine said in a webinar on the research findings earlier this year.
“This was the third lowest of any profession… and it appears to be going backwards.
“Just 5 per cent of Australians rate the real estate profession highly, that’s less than half the peak of 12 per cent they recorded in 2023.”
Interestingly, Ms Levine said younger age groups rate real estate as more ethical and honest than older cohorts.
Transparency as a key to building trust
It’s a similar story with the Governance Institute of Australia Ethics Index, which this year listed real estate as the least ethical occupation, with a score of -19.
The Real Estate Institute of Australia fared better, with a score of 5, and recently called in GIA Chief Executive Officer Megan Motto to address industry professionals in a live webinar in a bid to elevate the standing of real estate agents in the community.
Ms Motto said there were a number of things the real estate industry could consider doing to improve the public perception of the industry.
Overall, she said transparency was the key to easing several pain points and remedies could be as simple as having marketing photos of every room in a property, not just the best rooms.
“Could there be some industry standards about telling the whole truth, warts and all, and being a little bit more transparent,” Ms Motto said.
Technological solutions enhancing ethical standards
Mr Schravemade agreed transparency was the key to unlocking the trust door between the Australian public and real estate professionals.
But he also said taking a more holistic approach to who constituted a ‘client’ would be highly beneficial.
“The people who dislike us at the moment are the people we don’t have a fiduciary interest to,” he said.
“So, if we look at residential real estate, if I’m an agent I have a fiduciary interest with the seller.
“If I’m a property manager, I have it to the landlord.
“We’ve become very good at defending that, but I think somehow we have forgotten that there are other consumers, that are still our consumers, involved in the transaction.”
Mr Schravemade said agents and property managers could lift their ethics rating by also protecting the relationships with buyers and tenants.
“We need to protect the fiduciary interest with the sellers and the landlords, I’m not downplaying that, it’s a legal requirement,” he noted.
“But I think we’ve forgotten the cycle of the property transaction a little bit and the fact that tenants will usually go on to become buyers and buyers will often go on to become sellers.
“If we protect those relationships as well, I think it can go a long way to changing those scores from Roy Morgan and the GIA.”
Future directions: Integrating tech and trust in real estate
And Macquarie Bank backs this up, with research showing 70 per cent of tenants who have had great experience with a property manager would want to buy a house and become sellers or landlords.
Mr Schravemade said there were many pieces of technology that could help agents and property managers create more transparency with buyers and tenants to foster stronger relationships and, in turn, lift ethics rankings.
Offer management platform Market Buy is one of those.
Mr Schravemade said the Market Buy put the control and transparency of a property sale in the hands of vendors and buyers, who could see and make offers on properties in real time.
“It’s almost impossible to annoy the purchaser,” he noted.
Market Buy Chief Executive Officer John Hellaby said the platform gave vendors and buyers confidence to transact.
“An agent can go into a listing presentation and hand over a sales activity report and say, ‘You know 123 Smith St, just up the road? We achieved the price we did as a result of the marketing campaign we’re talking about. And, by the way, here’s the offer history and here’s the sale activity report’,” he said.
“It immediately gives sellers confidence that they’re not getting another sales spin.”
On the flip side, Mr Hellaby said Market Buy also transparency for buyers.
“It’s going to be a seller’s market for some time and any trip to the realm of a buyer’s market is going to be extremely short-lived, “ he said.
“Because of that, in giving the buyers the ability to make offers on their own terms from their mobile phone, and also to know that they are genuinely competing, that there are other offers and there are other buyers, you’re giving them fair and equal opportunity to compete for the property they want.
“It’s an interesting dynamic shift, because when you give buyers fair and equal opportunity, there’s no more, ‘Ah, but I would have paid more’.
“They see (the offers), they get the notifications in real time that there’s been another offer and it shifts their mindset.
“The buyers who miss out, obviously they’re not happy they missed out on a property, but they’re not angry or misstrusting of the agent because they acknowledge they had fair and equal opportunity.
“They just didn’t have the money to go where that property was selling.”
Erin Living Technologies
Mr Schravemade said Erin Living Technologies was another platform that offered transparency for buyers and tenants.
A livability platform with a resident App, named ‘Erin’, for residents of entire buildings, gated communities, retirement communities, student housing and house and land estates.
Co-founder and CEO of Erin Living Technologies Thomas Walkley said their aim was to connect residents to their home, their building and their community.
Through the App, Erin, residents are able to use their smartphones to do everything from enter the building and open their front door, to log maintenance or repair requests, receive notifications about the arrival of a parcel and even participate in social chat groups with neighbours that are grouped according to their interests.
“We use a number of features to engage tenants and residents to create that transparency and inclusiveness,” Mr Walkley said.
“That starts with driving engagement to the platform… and we do that by providing things that people really need in the building.
“So we have smart access on our phones and everyone is using their phone to enter their building or their apartment.”
“In terms of transparency, if people lodge a maintenance request or defects on the App, everyone can see them and you can see the status change as well if it’s a common area defect.
“So everyone can see that it’s updated.”
“There’s also transparency for the industry. We timestamp it and integrate it into construction management software.
“By doing that we’re logging that as an item that a builder needs to fix during their defect liability period, and it’s time stamped all the way through their system.
Mr Walkley said Erin could also be integrated with property management systems and tenants could see things like their rental documentation, while owners could see things like strata documentation.
The special interest groups also allow residents to customise their living experience and use in-app chat groups to connect with other like-minded people so that they feel part of a community.
How does all this create trust in the property management sector?
“By taking away the onus that’s placed on property managers with the availability of information, you will naturally create trust,” Mr Walkley said.
“If I don’t have to speak to you as my property manager, and I have a good impression of you, because we haven’t had to have any type of engagement, that means you’re doing a good job.”
Mr Walkley said the app also built trust as residents repeatedly used it successfully, without negative impacts.
“If you’re using your phone to open a door or sharing a digital key to the plumber, then you’re naturally sharing something that is extremely personal, secure and sensitive,” he said.
“If you’re comfortable doing those things, I think you are creating trust through the platform on behalf of the other stakeholders.”
Mr Walkley said at the moment, the platform only operated across communities, not property management portfolios, but he hoped that functionality would become available in 2024.
Other PropTech that helps build trust
Mr Schravemade said other technology platforms that could help agents and property managers create transparency and trust with clients included Milk Chocolate Property, which uses AI to help people plan, buy, build and manage Australian property.
According to an article in the Australia Financial Review, Milk Chocolate Property puts a strong emphasis on data and AI to drive property decisions, tapping into more than 1500 data points for every suburb, region and city back to 1980.
““We call on roughly 35 key indicators and have carefully set the thresholds to ensure the suburbs we select will provide long-term stable capital growth,” Co-founder Michael Cleary told the AFR.
“The industry is cottoning on to the advantages of incorporating AI and machine learning into the traditional business model; using big data to analyse economic and property trends; automating once menial and labour-intensive tasks; and optimising property purchase, sale and build decisions.”
Other platforms include Soho, which uses AI to instantly match buyers and tenants to properties that match their criteria, and Gavl, which enables agents to broadcast their auctions and open homes in real time.
Apps such as Property Calculator Australia can also create trust and transparency but simplifying the ‘numbers’ side of real estate, including stamp duty, loan balances, deposit needed, loan repayments and more.
“Technology that provides immediacy and transparency around the transaction or real estate process creates trust,” he said.
“And it’s building on that trust part of the equation that will see real estate practitioners elevate in the eyes of consumers.”