This is a discussion about
an article that goes into a bit more depth about the impact of technology the real estate world, and where it helps or may hurt.
Shaun Osher from Core is a really smart guy (and apparently a jazz sax player, too) and has some interesting things to say.
Take time to look at it I’ll add some additional thoughts.
What It Means When Real Estate Firms Declare Themselves Technology Companies
“In the mid-19th century, the American West was the epicenter for those seeking the glory of the great gold rush. Precious bits of minerals mined from the earth could build fortunes. Today, another great rush is underway. Ironically, it’s happening near the very same place as the first one, and again it involves precious bits – but these bits are data. And it is not taken from the ground this time, but from individuals including me and you.
More and more real estate firms are pulling away from focusing on home transactions and instead turning their eyes toward data collection. The new catchphrase in the industry is, “We are not a real estate company; we are a tech company,”
Shaun is talking about Compass, that has raised a ton of money on the back of this statement.
I am utterly unconvinced that they are anything but a real estate company.
Do they have a slick advertising and some attempts at a slick communication interface for buyers and agents?
Yes, but that’s a feature, not a company.
They are a brick and mortar real estate company that is spending a ton of money to get into markets across the US.
And doing a great job.
But no one has really struck on what tech will help really, really facilitate relationship building using the tech as platform.
Shaun goes on to talk about the efficiencies tech have brought:
“It’s easy to get caught up in the excitement of technology. There are many ways it’s made our lives easier as brokers. We’re capable of accomplishing much more within a 24-hour span than we used to, and it’s all thanks to technology taking over the administrative tasks that once upon a time took hours to complete. Communication with clients has also never been easier. Having the client information all in one place and ready at our fingertips helps to make the transaction smoother for everyone.”
But here is the meat:
“But what is the price of convenience? Once a client’s data is entered into a company-owned customer relationship management tool (CRM), who is the rightful owner of all of that information?”
Shaun take a left turn, and I like it.
Instead of focusing on the relationships between buyers and agents, he actually starts to talk about the relationships between Agents and their Brokerages.
“As brokers, this is where the excitement needs to end and the serious discussions need to begin. Tech companies are not real estate companies. Real estate brokerages exist to assist people with selling and buying property. Tech companies manipulate data and repackage it for convenience….
Real estate agents and their brokerages are in possession of some of the most sensitive information an individual has, including (but not limited to) bank account data, credit history and investment account information. The list goes on. In order to make the consumer feel comfortable handing this information over to their broker and for the broker to feel good about turning over their entire book of business to their firm…”
Shaun is talking about the fact that when an agent goes to work under the umbrella of an Elliman or Compass or whoever, who owns the information that is in an agent’s database?
Who owns the leads that come in?
The agent? The company?
What is the company doing to market to buyers or sellers vs what the agent is doing?
The line is getting VERY blurry.
And if a company told you that when you upload your own contacts into their CRM, that they will use your information and own it?
That’s pretty terrible.
It creates an adversarial relationship within a firm.
Not so good…
“Firms need to clearly state who owns the data and whether or not that data can be deleted from the system when the broker leaves the firm. The firm must be extremely clear with the agents. Certainly, provide a CRM, but do so solely as a matter of convenience to the broker. Brokerages should not own consumers’ data. When the consumer leaves, the data leaves with them…
Firms also need to state what they are doing with the data that is collected from the clients. Are they using it to improve on marketing? Are they using it to sell to another platform? Is the data safe, and how vulnerable is the consumer by exposing their data to the broker?
As consumers and as real estate agents, we need to start asking these questions now before it’s too late.”
I love this.
It shows one facet that really isn’t visible to the public.
I’ve written a bit about this before.
In many markets across the US and the world, it’s easier to see the value of the knowledgeable agent than the brokerage firm itself.
And if a RE company is creating a dynamic where they are not convinced of the value of its agents, that is quite a frictional moment.
Why would an agent want to work at a firm like that?
Compass, for example, before they pivoted into the brick and mortar company they are now, were convinced that agents were just show-ers.
They created a system where employees were showing rental properties based on renters reaching out to the company.
It would seem that the legacy of this attitude is showing up not just with that firm, but with other companies, too, who see the possibility of technology to continue to try to work around agents and market directly to consumers.
So the value proposition of an agent is in question within many real estate companies. And I think they have it entirely wrong.
People want to work with people, and the real estate transaction is just too emotionally powerful not to have people involved.
Companies have scale and the ability to build excellent platforms in places like New York.
If they don’t innovate, it seems to me that there is room for disruption.
But the innovation should be focused on all of the human aspects of the transaction, and making that experience excellent and tech-enabled.
Companies who are simply trying to wring efficiency may find themselves on the wrong side of the equation in the future.