There have been bell-ringers in the streets for many years calling for the end of the real estate sales profession as we know it.
Now we understand that the very real threats are coming from all sides. Just as there really isn’t a “private life” anymore (short of unplugging yourself from the internet), there is no safety in continuing to do your job as you did before.
“Big Data” will erode the limited access to information that long has been the sole domain of real estate brokers and their respective MLS and real estate boards. Even if the MLS isn’t forced to open up their data it will be revealed by third party websites that are now taking a larger percentage of clients and referring them to realtors, amassing their own stores of data from these interactions and by also including the public data that is accessible, creating a new source of seller data outside of the proprietary MLS system.
The only question here is when will the “tipping point” be realized?
Then we move on to the question of the realtor workforce and the “supply and demand” issue, not of homes but of brokers.
How many are needed to sustain the industry and what future changes will force a change in these numbers?
The usual “thinning of the herd” of real estate salespeople has come from market downturns. Now we are seeing a different challenge ahead: maintaining relevance.
Consumer’s expectations have changed, indeed, our lives have been transformed. At any time when you have a question you can “google it”. The answer is just a click away. Need to fix a leaky tap? Go watch a YouTube video and fix it like a pro. Need a new logo? Go to Fiverr.com and find a designer.
The common denominator is accessibility. It’s what we demand in our lives. If we expect someone to provide us with a service then it had better be top-notch, or the entirety of the connected world will hear about it. And good luck repairing your online reputation.
Let’s look at auto sales as an example: due to the availability of information the car-shopping sales funnel has been reduced from 6 to 8 trips to several dealerships, a few test drives, plenty of seeking answers to questions, etc., to visiting just a couple of online websites and a final trip to the dealership to purchase the car. And a car is usually the second biggest purchase a person makes. Dealerships and specific salespeople are visited or avoided because of their online reviews.
When, not if but when, the real estate transaction becomes “parted out” we will see a shift in the relevance of the real estate professional’s job description. “Big data” is the major variable here. Access to that information will open up, if not today then on a tomorrow soon.
The survivors in this business will be those that have the happy clients that refer them business and have a strong personal brand that they have built a successful business upon. The fast-moving, customer service oriented brokerage will be leading the way because they can nimbly accept the changes ahead and react to the demands of the times.
Large brokerages will be a part of the “herd thinning” for the very same reason many of them merge or fail: they do not provide the support real estate salespeople require and they look to cut costs as their sales volumes diminish. Their “bottom line” focused attention will see savings in costs by offloading many of the tasks that people now do, which is primarily finding and bringing in clients.
Those that see and adapt will win the future, those that do not will lose relevance and be pushed aside.
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