The threat of disruption has received a lot of air-time, and perhaps too much speculation exists about how our industry will suffer. It can be easy to fall into the trap of either ignoring the threat or becoming overwhelmed by it. Sarah Bell takes a lesson from the past and applies it to the future.
The essence of the threat of disruption is that low-cost, high-tech applications will create a new normal where buyers, landlords, tenants and vendors negotiate directly. This process is called disintermediation – and it will happen if agents lose their value in the middle of a transaction.
To have knowledge of a thing is to have power over it, so in a time when our existence is threatened it is worth looking at where our value comes from in order to preserve it.
THE HISTORY OF THE FUTURE
The concept of private property ownership became available to the ‘new wealthy’ class that was created as a result of the industrial revolution in the 18th and 19th centuries. Yet as the agrarian lifestyle gave way to industry and property ownership became more common, the real estate industry was also born and this specialist skill became valuable. A real estate agent’s expertise in marketing, negotiation, property law, business and asset management provided real value to those early property pioneers.
‘Uber’ is the traditional way to sell real estate, privately, without the assistance of an agent. The concept of agency disrupted the original direct negotiation model, which is the Uber model, and for very good reasons.
When we are talking about the sale and management of residential property, we are generally discussing the most significant asset in a pool of individual wealth. If your local transport driver goes the wrong way, you can recover easily. Similarly, fortunes are not won or lost in the selling of an old fridge on Gumtree.
If real property was simply an asset like any other asset, decisions would be rational, logical and responsible.
It doesn’t work like that with real estate. Homes and property represent family, hard work, sacrifice. There is a lot of value to property owners in the story of their homes, as opposed to its square metres, bricks and mortar.
The property purchase or lease is not emotion-free either. When a buyer or tenant connects to their future story and believes in the power of that speculation – wealth or happiness – they are prepared to pay more than the cost of the bricks and turf.
Being too close to the property makes it difficult to comprehend the market. Inexperience, emotional attachment and high stakes are the issues of a private sale by owner. They are also the very ingredients of a sophisticated panic. Panic in negotiations bleeds money.
Time and distance are time-honoured negotiation tactics that an intermediary agent can provide. There is a strong case for the survival of the real estate agent, but we will still need to fight for it.
SURVIVING THE FUTURE
Once technology replaces part of our service as sales agents or property managers, that part of our value is also diminished. While we are fighting a battle for relevance with technology developers, we have some inherent and critical advantages that low-cost-high-tech is struggling to match. This is where we should focus our attack: Local, Mobile and Social.
Local: Real estate is one of the few industries where local knowledge and geo-factors play an important role. What streets, features, regions and presentation styles add value to the property in your area? Your local knowledge about the factors that add and subtract value to homes in your community is not easy to acquire and both creates and protects profits for your clients.
Mobile: Your office is no longer in your office and it is no longer nine-to-five; it is wherever you are and it wants to be connected to solutions at all times.
No one can be everywhere and no one can be available 24/7, but technology can be leveraged to provide an outstanding service where clients can self-serve information about their property or your services with transparency, at a time that suits them, from anywhere in the world and on any device.
Simple things like embracing SMS right through to custom landlord property portals and fully automated communication journeys help your business to be more accessible and connected.
Social: No one is good at social media without being good at business. Good business – social businesses that are connected and engaged with their local community – are helpful and their clients and community respond.
It is like owning a TV station. If no one wants to watch the shows you are playing, then you have a station but no audience. Take time to create relevant and interesting, helpful content and you will be repaid in trust, engagement and business.
Social media starts a conversation; your business acumen and conversion capabilities get the deal done.
“Technology is a useful servant but a dangerous master” – Christian Lange.
