Jul 31 - 5min readDisruptive Tech: Is This The Beginning Of The End For Traditional Estate Agents?By Jennifer Green
Adaption in today’s world is the key to success in the survival of businesses where change happens on a daily basis. This includes the way they do business, communication with customers and how they display service information. Digital disruption has played a crucial role in how property agencies and the agents that work for them need to adapt to maintain relevancy against the online-only real-estate brands.
Today, we are seeing the rise of online-only real-estate brands like Rightmove, Zoopla and Purplebricks which has been brought on by the sharing economy initiated by Airbnb and Uber. Customers have recognised the benefits of using these resources in terms of time saved as well as hard-earned cash despite the DIY that will be involved for the consumer. But it is important to find out how digital disruption is affecting the traditional real-estate market as well as how we know where the future is going for the local real estate agencies on the high street.
Is disruptive tech signalling the end for traditional estate agents?
Traditional real-estate agencies maintain strong values in having a physical presence in the towns and cities where their customers sell and buy houses. They believe that to nurture relationships with their customers, extensive knowledge of the area is key in understanding the market and property values. This knowledge allows the real estate agent to charge a higher fee than their online counterparts but also promising a higher sale price in return.
The older model of real-estate has been uprooted by technology start-ups, or ‘proptech’. From lending and investment, property management, software development and online agencies are geared towards simplifying the real-estate market for its consumers. We have seen industries like banking cutting out the human factor in terms of customer service.
However, unlike banking, it is not expected that estate agents will be completely out of the picture. Proptech has changed the way we sell and buy properties, however, it is unlikely that the property market will divert into an ‘Uber for property’ scenario. The property ecosystem is more complicated that will require innovation from different angles.
How are agents responding to waves of ‘DIY’ sell your home tech?
The real estate market and property industry appear to be making its first steps into the space of immersive experience. 2015 saw the first virtual open-house through Facebook which allowed potential buyers to view the property in London and bid on it without physically being there.
Estate agencies on the local high street are growing and moving towards offering a more flexible service and product model wherein they will become the one-stop-shop for everything related to property purchase and taking away the overall stress of moving house. Agencies are learning to create an enjoyable and engaging store space so the desire to physically visit the retail space and obtain an experience that cannot be achieved online. By doing this, traditional estate agencies will maintain relevancy in the sphere of the digital property economy.
This does not mean that these agencies do not see the benefit of an online presence. The majority of traditional online agencies have websites where you as the customer can view images of various properties that are available. However, they would require you to visit the nearest local branch in order to obtain further information.
The emergence of online agents has brought forward customer demands for more details and agencies have needed to lean towards digital intervention. Foxtons, as an example, has had to build a more detailed website to reveal more details on the property including adding filters so the customer can filter out desirable areas, schools and tube stations. There has also been a rise in traditional estate agents offering 24/7 customer service call centres so that landlords, tenants and buyers can get information whenever they need it. This is owing to the rise in demands for a 24-hour service that they would receive online.
Can agents use tech for their advantage?
As tech is coming to the forefront of the real estate market, agents need not panic. Real estate agents have adapted their strategies to include tech in their day-to-day business in order to make life easier. Apps including Curate, Homesnap Pro, Labcoat Agents and StreetPeek App have all made waves in the real estate industry. Realtor.com’s app Street Peek lets agents take a literal ‘sneaky-peak’ into the information of property by pointing the phone at the home without the use of an MLS search or Google. Street Peek also serves up information on the neighbourhood that you are searching for so if you are the type of agent that does pre-show drivebys or scouts areas, Street Peek is a great way of taking advantage of tech in the real estate industry.
Curate is another new player in the reality game. Curate can be used by listing agents and homeowners to stage a home listing virtually before it is listed. It can also be used to encourage people to skip the staging process and use the app. Curate can also be used by buyer agents to help clients visualize design possibilities and just visualize themselves in the property to create that personal touch to the appointment.
How has tech already disrupted the industry and what are the impacts so far?
The overall percentage of homes that are sold online in the UK each year may appear insignificant at only 4%. However, this predicted to increase to 50% by 2020 and this would have a greater impact on traditional agents. Traditional real-estate agencies are under fire from numerous fronts, the most prominent of which being online agencies ploughing their way into the traditional estate agencies by offering lower prices than their competitors.
According to the founder of Trussle Ishaan Malhi told The Telegraph, “Real-estate agents need to approach the market in new ways since the current model has not adapted to modern approaches that newer clients may find more appealing.” Both online and traditional real-estate agencies have had to deal with digital disruptions in different ways and both have tried to compete by offering a pleasurable experience for customers and not deviate from their original business model too much.
Tenants, landlords and buyers expect to receive information quickly and efficiently. Online and traditional agents are making use of technology and traditional channels to provide the information in this way. However, traditional agents are still focused on having a physical presence whereas online agents sacrifice expertise to maintain low costs.
Digital disruption may have meant that estate agents have had to adapt their services, but they have been able to benefit from greater brand awareness and their customers are beginning to receive better customer service due to the availability of information and the transparency that was not there in previous years.