Here’s why the real estate industry has to open up
Technology has disrupted virtually every service industry, from banking and retail, to taxis and travel. You’d be hard-pressed to find someone who hasn’t used Uber, Amazon or Airbnb in the past week – if not in the last 24 hours. So, what’s the difference between these trailblazers and others offering similar services? Quite simply, their customer experience strategy is all about being convenient, user-friendly and easy-access.
Change is also bubbling beneath the surface of Canada’s real estate industry, and big data is the catalyst. With the arrival of Zillow and Purplebricks in Canada, and most recently, the public release of sold data, you can be sure that our industry will look different one year from now.
Change is often accompanied by fear, and in this case, the fear is that publicly available sold data will spell the end of the real estate industry as we know it. Instead of fighting the inevitable, I encourage agents and brokers to see this as an opportunity.
Let’s get real – people who are active in the housing market already know what the house down the street sold for. The fact is, sold data has always been available at public land registry offices and from agents directly. Now, it will also be accessible through password-protected web-based brokerages. With this information in hand, consumers will be better equipped to do their own research – and I’m a firm believer that a well-informed consumer is the best kind.
Realtor.ca is already Canada’s most-comprehensive real estate listings site. When coupled with sold data, it will be a powerhouse. Similarly, the websites that offer more information will get more traffic and generate more leads. The real estate businesses that don’t give consumers what they want (recall: convenient, user-friendly and easy-access), will fall off the radar.
So, if real estate agents are no longer the gatekeepers of sold data, what’s their value proposition?
Sold data has been publicly accessible to consumers in the U.S. for more than a decade, and FSBOs represent a small fraction of sales – just eight per cent, according to this 2016 National Association of Realtors study. The study also found that the typical FSBO home sold for $190,000, versus $249,000 for agent-assisted home sales. How’s that for customer value? Other FSBO challenges – and agent benefits – include:
- setting the right price
- selling within the planned time frame
- understanding and performing paperwork
- preparing/fixing up home for sale
- having enough time to devote to all aspects of the sale
In real estate, customer service and consumer experience is everything. Members of this industry who perform sub-par work are only serving to tip the consumer’s scale in favour of alternative services to buy or sell a home.
Key takeaway: it’s time to up your game.
SURVIVING MARKET DISRUPTORS
There’s a limited number of homes out there to sell, but the number of companies vying for consumers’ attention is growing by leaps and bounds. Here are some things for real estate business owners to think about – not only to survive the industry disruptors, but to reap the rewards:
- Wage tech war. Technology is the big disruptor in the real estate industry, and is a big lure for Millennials and Generation Z, who will flood the market in the next few years. Think “mobile first” and consider engaging an innovation leader to ensure your business strategy is aligned with modern-day digital demand.
- Give people what they want. What do consumers really want, and how can you provide it better than the other guys? RE/MAX surveyed 18- to 24-year-olds in Canada’s hottest housing markets, to learn more about their home-buying perceptions. The majority reported feeling stressed at the prospect of purchasing – 75 per cent in the Greater Toronto Area and 71 per cent in Greater Vancouver. Furthermore, 51 per cent of survey respondents in Greater Toronto and 57 per cent in Greater Vancouver reported feeling undereducated about the housing market and the buying process. Be the teacher, be their guide.
Think ahead. Where’s your business today, and where would you like it to be five years from now? If “digital” isn’t part of the answer, make it so. This includes investigating and implementing new technologies to make your staff more efficient and improve the level of service they offer. Shift the company culture to embrace the change..
This column was written by Christopher Alexander, Executive Vice President and Regional Director, RE/MAX INTEGRA Ontario-Atlantic Canada Region