REAL ESTATE TECHNOLOGY IS COMING AT US LIKE A FREIGHT TRAIN; DON’T SHY AWAY EMBRACE IT.
Technology is rapidly overhauling real estate, chugging like a freight train on a dedicated track, nothing to prevent it from reaching its destination. The question is not whether the masses will accept the coming changes, but when.
I recently read that a brokerage in the eastern United States is testing buyer’s submission of offers for homes the brokerage has listed. A startup in California is offering the same service as is an international brokerage that has set up business on the west coast. Why are brokerages investing in the technology; to capture all sides of the transaction.
The significance of the east coast brokerage is they are using blockchain technology. The other companies are mum as to their technology. View my post on blockchain technology use within the real estate industry. It seems to have gathered momentum.
Buyer online offer submission is similar to having an agent plunk an offer sheet in front of you and say sign here, here and here. No explanation. The reality is you signed a legal document without knowing the contents. The adage “you don’t know what you don’t know” applies.
When websites asks you to agree to terms and conditions; how many of you read the terms and then complain later when your data is sold to someone? I’m guilty.
Zillow recently announced Zillow Mortgage after the purchased of a small mortgage company. Just a matter of time before they attempt to capture the entire process—listing, buyer, mortgage, and transaction. May take a while, but with blockchain technology, Zillow could facilitate a secure transaction, start to finish (my opinion). Zillow denies wanting to displace the agent “partners.”
Zillow is careful not to call itself a brokerage, but that could change if they believe the dollars are significant enough.
WHERE DOES THIS LEAVE THE CONSUMER?
Technology is incredible and will create a quicker, smoother, accurate and transparent transaction. Information will be secure and complete. There is a BUT.
During the maturation of the transaction, there needs a braking mechanism.
As a seller, will you take a computer’s valuation of your property or from someone that will look at your home and compare the condition and amenities of homes that have sold in your area? The same can apply to buyers; you need advice when it comes to an offer price. The list price is not necessarily the sales price. How about asking for repairs and the response to those repairs?
Principles need to understand what contingencies are, the definitions of essential terms within the contract and when steps need to be accomplished and by whom. These processes are not BOT friendly. A professional can add context to questions you may have.
The principles of the transaction need a consultant to advise on a myriad of questions that arise during the process; a knowledgeable voice, looking after your interest and provide the risk management required.
Big data is driving the changes that are coming. The technology does not have insight into a particular property’s condition or the needs of a buyer and seller. The conclusions reached by big data represents the norm, whereas in real estate each property is unique.
Reminds one of yesterday’s travel agent industry when a human did everything for your trip planning. Consumers can now do many tasks to book their trip without a travel agent; however, when something goes wrong, the consumer wants to speak with a helpful voice, not a BOT.
The brokerage’s role will transition from sales to an advisory for most segments–luxury homes is the outlier. Brokerages will convey reasonableness and flag risks for the consumer. Technology, brokerages, and consumers will learn to co-exist for everyone’s benefit.
For each of you reading this post I would be surprised if you do not sell or buy at least one more property within your lifetime. The transaction will be different than the last time you did so. It will be faster and transparent as all data concerning a property will be available to all principles.
Contact me if you have any questions or comments.