Real estate is going through an unprecedented transformation not only because of the internet, which has been widely used for more than 20 years. This huge shift is happening because of the attitudes and habits formed by the client themselves. Retail is one of the biggest casualties of this shift and many companies have no one to blame but themselves. They just brushed of companies online companies like Amazon, especially after the burst of the tech bubble. In reality, it just weeded out the weaker companies that lack a sound business model.
Many business executives considered the internet more of an advertising space than a market place. The sat in the boardrooms and systematically made decision not to take their business online. They came up with a plethora of reasons such as brand image, target consumers, and the burst of the tech bubble. It is easy to sit and judge some of America’s smartest business leaders 20 years after the fact. One might even brand them as fools. Luckily, the real estate industry has remained safe, but this does not mean that it will remain so. The sooner real estate adopts technology the better it will be for the industry. The small players such as real estate agents will be the first casualties because the barriers to entry are not high. Moreover, unlike being an agent is not a capital-intensive activity.
Real estate brokers have terribly failed at reinventing their business, except for Redfin. If one takes a hard look at Redfin, one will realize that Redfin is nothing but a real estate broker. This simple “innovation” has turned it to a company with over $2 billion in market capitalization. To put it simply, Redfin, founded in 2004, is a broker worth billions. This is just the beginning of the massive shift because the public has a hard time understanding the real value of real estate agents. In addition, real estate agents are expected to spend money on marketing the properties for their clients but they hardly do that because it will eat up their commission. Posting advertisements on a real estate portal such as Trulia or Zillow are not considered marketing. Perhaps an agent might want to, at least, invest in a photorealistic 3D plans, 3D renders, or 360 tours to show the property in all its glory. In addition, Real estate agents can provide true value by deciphering the buying process to new homebuyers.
It time to innovate, especially when it comes to real estate marketing. Real estate professionals must embrace technology and look for ways to improve the client experience. The industry is in desperate need of it change. It is time to be proactive to avoid the same fate as retail.