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The last decade has seen the advancement of technology at the expense of real human interaction. In many industries, the middle man has been completely removed, and consumers are given full access to the information and tools needed to make their own decisions without “the experts.” Take for example the movie renting industry where previous big wigs like Blockbuster and Hollywood have been replaced by live streaming programs like Netflix, Apple TV, digital cable and Redbox. Or popular traveling agencies like Expedia and Priceline that have completely eradicated the need for travel agents. Currently in the real estate industry, sites like Zillow, RedFin, and Trulia are claiming to offer valuable real estate information that was previously only accessible by Realtors. The infamous “Zestimates” (though there is much dispute about it’s accuracy) provides a home’s market value estimate. Interested buyers can also peruse a list of available homes for sale, without having to rely on a real estate agent. With all this information at the consumers finger tips, some real estate professionals are wondering about their job security.The question being asked is whether or not Realtors will soon be replaced by computers, phone apps or real estate sites?
Will technology replace Realtors?
We had a chance to discuss this with a few top producing agents and got their prospective. Luxury Realtor Ron Rothenberg of Lafayette, CA is not so easily convinced that practicing agents will become obsolete. Stating that real estate is a “personal service business,” he knows that computers will never be able to replace the value of human interaction and experiential knowledge. He draws a comparison between the movie theater industry and explains that many were expecting cinemas to go out of business with the release of DVDs and tapes, not realizing that people go to the movies for the overall experience:
“Real estate is a personal service business, and in spite of giant strides forward in the technology made available to the consumer and to the industry, it remains a business that I don’t believe will be replaced by computers, algorithms, or other forms of automation anytime soon. In some respects, I think it is somewhat analogous to what we saw happen with video tapes and DVDs. Initially, people were calling for the demise of movie theaters, yet it’s a bigger business today than it was 30+ years ago when movies were first made available on VHS. The prognosticators missed recognizing the core values of the consumer. Consumers valued the experience of going out to the theater first and foremost, not simply watching a movie on a much smaller screen.”
Mike Kehrig of The Bayhill Team from Danville, CA seems to believe that the value they add is based upon long-term, genuine relationships, and that this important element cannot be replicated by technology:
“The value in what we do is not just showing our clients neighborhood data and what the house on Main St. sold for. Although there is value on that side the real value is the relationship we develop with our clients and showing them that we have their best interests in mind and not our own. We show this through our communication and actions throughout the real estate transaction.”
Because buying a home is often the largest most significant purchase anyone will ever make, Ron seems to feel consumers won’t easily entrust their financial future to a computer. Not to mention that the nuances and complexities of real estate are completely overlooked by websites like Zillow. He explains his beliefs in the following statement:
“In the case of the real estate experience, most consumers are dealing with the largest, most important financial transaction of their lives. I don’t see them willing to entrust it to a computer quite yet, and there are far too many subtitles of real estate that simply cannot be automated.”
The housing industry is hyper-localized and simple formulas applied across unique real estate markets simply don’t work! According to Ron, one great failure on the side of technology is Zillow ‘s “Zestimates” which often provides inaccurate information in markets that are “non-conforming” such as the Lamorinda area:
“The best example of this is how Zillow has failed to have their “Zestimates” be of any value in areas like Lafayette or Orinda where the housing stock is predominantly “non-conforming”. In other words, we don’t live in an environment of conforming subdivisions where the builder built 10 versions of the same house in the area, and one can get reasonably close to a valuation by simply looking at price per square foot of the last couple of sales involving the same model home. In Lafayette and Orinda, we have tremendous variation in lots size, topography, desirability of lots, home size, finish levels of the homes, consumer appeal, etc… There are a multitude of variables that neither Zillow, nor another computer-based algorithm can accurately assess.”
Mike also agrees that real estate transactions are just “too complicated” to be successfully facilitated and taken over by technology. He believes that the “human element” is needed to weave through all the intricacies inherent in the housing industry. Ensuring that the buyer or seller is completely taken care of and guiding clients through the unforeseen problems that arise are best done by people:
“There are so many steps in the process and so many variables that you need the human element to be able to facilitate the process while still holding their clients’ needs above anything else. I find it hard to believe that technology will be able to evolve far enough along to have a fiduciary responsibility to a client/customer. I think technology has done great things in educating our clients and bringing them closer to us than ever but I don’t think real estate professionals will ever be ‘replaced’ by technology.”
The knowledge, and full breadth of understanding that a real estate professional has simply cannot be replicated by an automated system. Because Realtors are living in, breathing, and experiencing their communities everyday, they can quickly assess the natural changes that take place within their neighborhoods . Knowing a community at this intimate level is key to making a timely, effective, competitive and overall successfully real estate transaction. Computers are limited by formulas and unable to take into account the subjective elements of the housing industry.
Despite these short comings, this is not to downplay the role it plays in enhancing the real estate industry as a whole. The most successful Realtors have used technology to improve their business and increase their overall influence. Technology is just another way they can communicate with their customers and build relationships.
Although consumers have more access to information than ever before, Mike does not see that as a threat to his business. In fact, he takes great pleasure in assisting clients that are well informed, and uses that as motivation to stay current on the latest real estate news and trends. He knows it is important to stay one step ahead of this new generation of highly informed clients:
“As an agent I love having informed clients that are well educated on the market and neighborhoods. With that being said, I have to be more knowledgeable and fill in the gaps of information and show my value. I don’t think having knowledgeable and educated clients marginalizes real estate agents.”
Instead of seeing technology as a competition, the most successful Realtors use technology as a way to enhance their business and provide better service to their clients. For example, social sites like Facebook and Twitter give Realtors an additional platform where they can spread their message and reach a broader audience. There are also many phone apps that give real estate agents the ability to complete necessary tasks expeditiously. Still, despite all the changes the real estate industry has undergone, the foundation of any successful practice continues to be relationships– and technology could never substitute that. Mike sums up the relationship between technology and real estate perfectly in the following quote: “High tech will never replace high touch but it can help increase your touches. When it comes to sales sometimes you really need to get back to the basics and build your network from the inside out.”
To read more about technology in the real estate industry from Ron Rothenberg or Mike Kehrig visit:
Ron Rothenberg : http://teamrothenberg.com/2014/04/07/lafayette-ca-real-estate-agents-ready-replaced-technology/
Mike Kehrig: http://bayhillteam.com/will-technology-replace-working-real-estate/
HomeFolio Media is a cross-channel communications firm, which provides marketing, advertising and public relations services for top-producing real estate professionals and affiliate businesses who want to target local home owners, buyers and sellers.
We combine the power of a high-quality magazine with proven direct mail strategies, and a content-rich online platform, consciously designed using the latest search engine optimization best practices.
Our goal is to increase our clients’ visibility, enhance their image with prospects, and ultimately, make a positive contribution to their bottom line.
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