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Will Realtors be replaced by technology by the year 2031? You respond

There is always talk of disintermediating the real estate industry, but could it happen by 2031? Some say yes, others emphatically say no. What say you?

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We’ve written about Quora.com and its question slash answer slash wiki community of users and their potential uses in the real estate industry. One of the topics I follow is “Real Estate Agents” to monitor consumer sentiment regarding the profession.

Recently, a Quora user asked “Will technology replace the need for human real estate agents in the next 10-20 years? Why or why not?”

Before I share my personal beliefs, it was interesting how the community weighed in.

The business of real estate will change

Quora user Lanny Baker who has no bio but whose Facebook profile is that of Zip Realty’s CEO, (so we cannot verify whether or not it is actually Baker, but nonetheless), Baker said, “Looking at the growth and scale of eBay Motors, eTrade & Charles Schwab, and TurboTax & QuickBooks there are at least a few interesting examples of technological solutions encroaching on well-entrenched human-powered services (used car sales, stock brokerage, tax and SMB accountancy), . Most of these are higher frequency activities for consumers than is residential real estate, which means the incentive to seek out a more efficient alternative, and the market opportunity for those alternatives, may be bigger in these other areas. In each of those examples though, the conventional wisdom for a long time was that “people will never do this online, it is too big, too complicated, the risks are too great.” And then, that changed…”

RealDirect CEO Doug Perlson said, “I believe the role of the real estate agent is changing, and while the agent may not “go away”, I envision a platform that lets sellers distribute their listing to every place a buyer may be looking (search, classifieds,social nets, MLS), use interaction data to allow the seller to make informed decisions on what to do next (pricing, etc.), and provide CRM like tools that make scheduling and contacts seamless through the sales process (think Open Table for home showings). A seller can use these tools to manage the process with the help of a real estate “consultant” who unlike a typical agent is motivated by commission, but is a salaried professional.”

Paperless Real Estate specialist Jessica Stoner pointed to the reasons time won’t change why consumers hire Realtors and answer the question simply, “Yes and No. There will remain a role for the the traditional full service agent. This will still be sought by a portion of the public. However, the online power of the people is changing real estate forever.”

Real estate and technology attorney Elizabeth Baum points to technology as more of a catalyst, “I don’t think technology will completely replace real estate agents in all transactions, but it will fundamentally change the role of the agent. There will always be some need for quality facilitation of a complicated (or at least intimidating and costly) transaction, and there will always be people who would prefer to outsource a lot of the steps involved in a real estate transaction (ie., sorting through the MLS, getting a house ready for sale).”

Agents aren’t going anywhere

Max Cangelosi, a consumer who is not involved in the real estate industry said, “With today’s technology in a vacuum….no. But I think it’s certainly possible in the residential space given the consumer protections in place.” Cangelosi continued with examples ranging from LegalZoom contract use to Zillow’s true understanding of a home, ending with “I think that the issue is less about technology as there are hundreds of thousands of incredibly hard working agents who built their careers in this industry.”

Austin Realtor Malita Jones points to the value proposition of agents, saying, “I always say it’s not about finding the house – it’s about representing clients through the contract process – I work on contracts and the house buying / selling process constantly – even my smartest clients get really confused on how things are handled or who pays for what – or what to do and not to do to keep themselves out of court in a few years.”

Agentleaf.com CEO Matthew Holder said, “Its unlikely. A great example is Kelly Blue Book for cars. No matter how sophisticated Kelly Blue Book is at determining fair market vale (about as accurate as Zillow is at predicting home prices) people will still feel the need to negotiate. People will also feel the need to be protected from liability, which is where an agent comes in. This could only be replaced by a more sophisticated market structure where incentives and knowledge was more easily shared…not likely to happen since the incentives are towards hoarding information. There are many things that can be automated, but the future of real estate is in making the agent’s job easier, cheaper, and increased efficiency in the market.”

Where do you stand?

I lean toward the camp of a shifting value proposition of Realtors with technology acting as an aide to the industry rather than a replacement.

Do you think consumers can be swayed to believe that technology will replace Realtors or is the public level headed enough to see a simple shift? Where do you stand?

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33 Comments

33 Comments

  1. Joe Manausa

    March 8, 2011 at 9:05 am

    Lani, I think “replace” is a little strong, but certainly “redefine.” I see real estate agents evolving to more of a customer service solution, since the research and property selection tools on the internet are growing very fast. Perhaps a cross between a current “transaction coordinator” and a (other industry) customer service rep for pre and post closing Q&A.

    • Lani Rosales

      March 8, 2011 at 9:16 am

      I agree, although I think the most skilled negotiators will end up in the top producer spots as much of the rest can be aided with tech. Thoughts?

  2. Matt Thomson

    March 8, 2011 at 9:42 am

    We’ll be replaced, but it won’t take til 2031. Think about it. There’s already self-check lines in many grocery stores. What we do isn’t any more complicated than grocery checking. I mean, if you can purchase groceries all by yourself, and if you can buy a $12,000 car with no legal ramifications whatsoever all by yourself, why will it be another 20 years before you choose to buy a $300,000 home with tons of legal ramifications all by yourself.
    Spooky.

  3. Matt Thomson

    March 8, 2011 at 9:46 am

    You really need a “Delete” button on this blog for guys like me who it send before we think.
    Despite my dripping sarcasm, I am fully aware that our roles will change, as they already have dramatically in the past decade.
    Consumers are given a ton more information, and in many cases are better at sorting through the data than many real estate agents. That may be a result of the buyers knowing more of what they want so they can sort better, it may sadly be that many consumers feel the need to educate themselves while agents stop learning once they get their license.
    Changing roles doesn’t mean being replaced. Keeping up with tools and learning how others are using those tools and keeping a fiduciary rather than functionary mindset should keep agents in business for many many years.

    • Lani Rosales

      March 8, 2011 at 2:19 pm

      “Changing roles doesn’t mean being replaced,” you say and I agree!

  4. Lynda White via Facebook

    March 8, 2011 at 9:52 am

    Hee hee and I just commented on that very question on Quora about an hour ago! 🙂 No, we will always need the human touch.

  5. Joe Sheehan

    March 8, 2011 at 10:28 am

    As I was thinking about this question, I realized that if I am still above ground in 2031, I will be 76 years old. Hopefully I will be living in a warm-all-year-round climate and the most worrisome thing on my mind will be what restaurant offers an early-bird special and a good seniors discount. 🙂

    • Lani Rosales

      March 8, 2011 at 2:20 pm

      Joe, that’s an interesting point and one that must be nice to think about. I’m not a Realtor but I’m still in my 20s so I should probably think about Robots while you think about buffets, deal? 😉

  6. Jill Kipnis

    March 8, 2011 at 2:30 pm

    This is such an interesting question, and I wish I had a crystal ball! While technology has certainly changed industries including publishing (with eReader devices) and music (the downfall of the physical album), it’s hard for me to picture undergoing such a huge transaction like buying or selling my home without the assistance of a Realtor. I think Realtors will increasingly use technology to help with the paperwork for each transaction, but the process of pricing a home, staging a home, working with an inspector, etc. requires the human touch of a Realtor.

    At least in today’s market, I think we can agree that using a Realtor is critical:
    realtor.com/blogs/2010/12/31/realtor-expertise-is-critical-in-todays-market/

    –Jill Kipnis, Community Builder @Realtor.com

  7. cbass

    March 8, 2011 at 4:16 pm

    yes, but probably much sooner. most will soon be playing checkers in the park with former travel agents, book & music store owners, and blockbuster employees.

    • Jonathan Benya

      March 9, 2011 at 1:24 pm

      I’m so sick of the comparisons being made between Realtors and every other occupation that has been supplanted online. It’s a completely different ball of wax, guys! Yes, the role is evolving, yes it will continue to evolve, but replaced? Hardly!

  8. Jonathan

    March 9, 2011 at 2:57 pm

    Choosing a property is inherently a community decision. People love to share that experience with someone, or get advice from a trusted source. That want to be assured that they are making a good decision. For that reason I don’t think technology will replace Realtors.

  9. TJ Bell

    March 9, 2011 at 10:52 pm

    “Real Estate Consultant” sounds pretty 10 dollar an hourish to me with some of the work being outsourced to a call center in Thiruvananthapuram.

    I think that’s the real issue. The industry will continue to change but will the value proposition be there in 10 years for people to pay $12,000 in commissions on $200,000 transaction.

  10. Ralph Bell

    March 10, 2011 at 12:41 am

    I see mortgage brokers being replaced before REALTORS. I see the current compensation of REALTORS changing. But I also see pink elephants and flying monkeys.

    Regardless of what you think or not think about the future, REALTORS as always will have to adapt to change if they want to be successful.

    And maybe by 2031 HUD will finally accept the use of electronic signatures 31 years after the Electronic Signature Act was passed. And finally by 2031 my local MLS will allow you to access it with a web browser other than Internet Explorer.

  11. Missy Caulk

    May 3, 2011 at 7:33 am

    A few years ago, our GMM (General Membership Meeting) at the Ann Arbor Area Board had a newly relocated Google Executive in to speak.

    He said, he thought he could do it on his own, armed with Google Maps, the listings,the values etc…

    …but he couldn't because he still needed someone to let him in the houses.

    Rather than call all the listing agents he chose a buyer agent. I know the agent he chose and he is NOT technology minded at all, now retired.

    • Lani Rosales

      May 3, 2011 at 10:02 am

      Missy, that is SO telling. What a great story to tell clients! 🙂

  12. matthew holder

    May 3, 2011 at 10:14 am

    Hey all.

    I feel Realtors have more to fear from being replaced by attorneys than tech. People are quick to compare the real estate industry, which deals with selling assets of extreme variance from home to home and neighborhood to neighborhood. Cars, hotel rooms, etc. have a much smaller (and more manageable) variance between feature sets, which makes it easier to comparison shop and create fairly accurate valuation models. Combine that with the life decision and high investment of purchasing a home and you have one hot mess to sort out with a clean tech solution.

    Has anyone considered that real estate agents are the most efficient solution? And that tech will help increase their efficiency and help them further focus and specialize their efforts?

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Opinion Editorials

The actual reasons people choose to work at startups

(EDITORIAL) Startups have a lot going for them, environment, communication, visible growth. But why else would you work for one?

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Startups meeting led by Black woman.

Startups are perpetually viewed as the quintessential millennial paradise with all of the accompanying perks: Flexible hours, in-house table tennis, and long holidays. With this reputation so massively ingrained in the popular perception of startups, is it foolish to think that their employees actually care about the work that startup companies accomplish?

Well, yes and no.

The average startup has a few benefits that traditional business models can’t touch. These benefits often include things like open communication, a relaxed social hierarchy, and proximity to the startup’s mission. That last one is especially important: While larger businesses keep several degrees of separation between their employees and their end goals, startups put the stakes out in the open, allowing employees to find personal motivation to succeed.

When employees find themselves personally fulfilled by their work, that work reaps many of the benefits in the employee’s dedication, which in turn helps the startup propagate. Many aspiring startup employees know this and are eager to “find themselves” through their work.

Nevertheless, the allure of your average startup doesn’t always come from the opportunity to work on “something that matters.”

Tiffany Philippou touches on this concept by pointing out that “People come to work for you because they need money to live… [s]tartups actually offer pretty decent salaries these days.”

It’s true that many employees in their early to late twenties will likely take any available job, so assuming that your startup’s 25-and-under employee base is as committed to finding new uses for plastic as you are may be a bit naïve—indeed, this is a notion that holds true for any business, regardless of size or persuasion.

However, startup experience can color a young employee’s perception of their own self-worth. This allows them to pursue more personally tailored employment opportunities down the road—and that’s not a bad legacy to have.

Additionally, startups often offer—and even encourage—a level of personal connection and interactivity that employees simply won’t find in larger, more established workplaces. That isn’t symptomatic of startups being too laid-back or operating under loosely defined parameters. Instead, it’s a clue that work environments that facilitate personalities rather than rote productivity may stand to get more out of their employees.

Finally, your average startup has a limited number of spots, each of which has a clearly defined role and a possibility for massive growth. An employee of a startup doesn’t typically have to question their purpose in the company—it’s laid out for them; who are we to question their dedication to fulfilling it?

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Opinion Editorials

How Peloton has developed a cult-following

(OPINION EDITORIALS) How has Peloton gotten so popular? Turns out there are some clear takeaways from the bike company’s wildly successful model.

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Man riding Peloton bike with instructor pointing encouragingly during workout.

Peloton is certainly not the first company to gain a cult-like following–in the past we’ve talked about other brands with similar levels of devotion, like Crossfit and Yeti. Now, full disclosure: I’m not an exercise buff, so while I’d vaguely heard of Peloton–a company that sells stationary bikes–I had no idea it was such a big deal.

I mean, it’s not really surprising that an at-home bike that offers the option for cycling classes has grown so much during the pandemic era (a sales growth of 172% to be exact). But Peloton has been highly popular within its fanbase for years now. So, what gives? A few factors, actually.

Vertical Integration

If your company really wants to guarantee the vision and quality you’re aiming for, one of the best ways to enact it is through vertical integration, where a company owns or controls more than one part of its supply chain. Take Netflix, for example, which not only distributes media, but creates original media. Vertical integration lets companies bypass areas that are otherwise left to chance with third-party suppliers.

Peloton uses vertical integration–everything from the bike to its Wi-Fi connected tablet to the classes taught are created by Peloton. Although this may have made the bike more expensive than other at-home exercise bikes, it has also allowed Peloton to create higher quality products. And it’s worked. Many people who start on a Peloton bike comment on how the machine itself is well-built.

Takeaway: Are there any parts of your business process that you can improve in-house, rather than outsourcing?

Going Live

But with people also shelling out $40 a month for access to the training regimen Peloton provides, there’s more going on than simply high-quality craftsmanship.

Hey, plenty of cults have charismatic leaders, and Peloton is no exception. Okay, joking about the cult leader part, but really, people love their trainers. Just listen to this blogger chat about some of her favorites; people are connecting with this very human element of training. So much so that many people face blowback when suggesting they might like training without the trainers!

The trainers are only part of this puzzle though–attending live classes is a large draw. Well, as live as something can be when streamed into your house. Still, with classmate usernames and stats available while you ride, and teachers able to respond in real time to your “class,” this can simulate an in-person class without the struggle of a commute.

Takeaway: People want to see the human side of a business! Are there any ways your company could go live and provide that connection?

Getting Competitive

Pandemic aside, you can get a decent bike and workout class at an actual gym. But the folks at Peloton have one other major trick up their sleeve: Competition. Whether you’re attending a live session or catching up on a pre-recorded ride, you’re constantly competing against each other and your own records.

These leaderboards provide a constant stream of goals while you’re working out. Small accomplishments like these can help boost your dopamine, which can be the burst of good feeling you need while your legs are burning mid-workout. With this in mind, it’s no wonder why Peloton fans might be into it.

Takeaway: Is there a way to cater to your audience’s competitive side?

Conclusion

At the end of the day, of course, Peloton also has the advantage of taking a unique idea (live-streamed cycle classes built into your at-home bike) and doing it first. Plus, they just happened to be poised to succeed during a quarantine. But that doesn’t mean you can’t learn from what Peloton is doing right to build your own community of fanatics. There are plenty of people out there just waiting to get excited about a brand like yours!

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Opinion Editorials

How a simple period in your text message might be misinterpreted: Tips to improve your virtual communication

(OPINION/EDITORIAL) Text, email, and IM messages may be received differently depending on your communication style and who you’re communicating with. Here’s some ways to be more mindful.

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Black woman smiling in communication talking on phone and laptop in front of her.

Life is full of decisions, learning, hopefully some adventure, and “growth opportunities” through our careers and work. One that some of us may have never considered is how our text, email or IM communication comes across to the receiver – thus providing us a growth opportunity to take a look at our own personal communication styles.

It may have never occurred to us that others would take it a different way. After all, we know ourselves, we can hear our voices in our heads. We know when we are joking, being sarcastic, or simply making a statement. The way we communicate is built upon how we were raised, what our English teachers stressed, and even what we’ve been taught through our generational lens.

NPR put out an article recently, “Are Your Texts Passive-Aggressive? The Answer May Lie in Your Punctuation”. This article discussed what to consider in regards to your punctuation in text.

“But in text messaging — at least for younger adults — periods do more than just end a sentence: They also can set a tone.” Gretchen McCulloch, a linguist and author of the book Because Internet: Understanding the New Rules of Language, told NPR’s All Things Considered last year that when it comes to text messaging,”the period has lost its original purpose. Rather than needing a symbol to indicate the end of a sentence, you can simply hit send on your message.”

While it may seem silly that the receiver would think you are mad at them because you used a period, here are some things to consider in our virtual communication now that we are all much more digital:

  • There are no facial expressions in a text except for emojis (which, even then, could be left up to misinterpretation)
  • There’s no sound of voice or inflection to indicate tone
  • We are emailing, texting, and sending instant messages at an alarming rate now that we are not having as many in-person interactions with our colleagues

Gen Z (b. 1995 – 2015), who are the most recent generation to enter the workplace, grew up with much quicker forms of communication with their earlier access to tech. They’ve had a different speed of stimulation via YouTube videos, games, and apps. They may have never experienced the internet speed via a dial-up modem so they are used to instantaneous results.

They also have quickly adapted and evolved through their use of Facebook, Instagram, Snapchat, and now TikTok. The last two platforms are designed for pretty brief attention spans, which indicates our adaptation to fast communication.

Generational shaming is out and uncomfortable but necessary conversations around diversity, equity, and inclusion are in (which includes ageism). You can’t just chalk it up as “those kids” don’t understand you, or that they need to learn and “pay their dues”.

So if you are of an older generation and even a manager, here are some considerations that you can take regarding your virtual communications:

1. Consider having yourself and your team take a DiSC assessment.

“The DiSC® model provides a common language that people can use to better understand themselves and to adapt their behaviors with others — within a work team, a sales relationship, a leadership position, or other relationships.

DiSC profiles help you and your team:

  • Increase your self-knowledge: How you respond to conflict, what motivates you, what causes you stress, and how you solve problems
  • Improve working relationships by recognizing the communication needs of team members
  • Facilitate better teamwork and teach productive conflict
  • Develop stronger sales skills by identifying and responding to customer styles
  • Manage more effectively by understanding the dispositions and priorities of employees and team members

This quiz is designed to help you identify your main communication style. It helps you to be more conscious of how your style may come across to others. Does it builds relationships, or create silent conflicts? It doesn’t necessarily mean you have to change, but you can adapt your style to best fit your team.

2. Always ask your direct reports about their preferred method of communication (call, text, email, IM, meeting).

Retain this information and do your best to meet them where they are. It would also be helpful to share your preferred method with them and ask them to do their best to meet you where you are.

3. Consider putting composed emails in your drafts if you are fired up, frustrated, or down right angry with your team.

You may feel like you are being direct. But since tone will be lost virtually, your message may not come across the way you mean it, and it may be de-motivating to the receiver. Let it sit in drafts and come back to it a little bit later. Does your draft say all you need to say, or could it be edited to be a little less harsh? Would this be better as a meeting (whether video or phone) over a written communication? Now the receiver has a chance to see you and have a conversation rather than feeling put on blast.

And finally, be curious.

Check out Lindsey Pollak’s books or podcast on the best ways to work with a variety of generations in your organization. Lindsey is a Multigenerational Work Expert and she does a great job explaining her research to drive multigenerational workplace success. She gives ideas on what all employees, managers, and even corporations should consider as we experience so many generations and communication styles in the workplace at the same time.

You may laugh that your children or employees think you are mad at them when you use a period in a text. But there’s a lot more behind it to consider. It may take adaptation on all sides as communication styles and the “future of work” continue to evolve.

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