It’s a cliché to note that the internet has completely changed business. For big companies and small, the web has allowed businesses to be more efficient, advertise better, and scale faster.
However, the impact is not uniform. While technology has revolutionised the travel, advertising, jobs and financial services, some industries still seem to be chugging along unscathed by the web revolution.
The real estate industry is one of them. Yes, classified advertising has migrated to the web in the form of real estate search, but the sell side of real estate may be web’s biggest relative laggard.
There are several reasons why technology adoption has lagged the Real Estate brokerage industry.
Brokerages compete with each other not on their differentiated offerings, but simply by bringing on more agents. And agents are typically attracted by brand and commission split. So as a broker, that’s where you spend your money. Developing technology based differentiation is low on the list of priorities because brokers and agents are not technologists, and the “off the rack” options don’t fit the needs of the real estate community anyway.
The “one size doesn’t fit all” problem is particularly acute for real estate sales. Real estate is a different beast because there are two sales that need to happen prior to closing a transaction. First, the home owner needs to be “sold” so the agent gets the listing, and then the home buyer needs to be sold the home. Any complete technology based selling solution needs to take into account both parts of the sales equation.
Layer on top of this, a solution that needs to span online and offline media and be local in nature, and it’s no wonder real estate sales has been such a late adopter of technology.
However, never before has there been such an opportunity for an industry to embrace technology. Social networking allows the real estate brokerage to tap into their contacts and the contacts of their agents and clients. And analytics software can measure marketing response and determine what’s effective and ineffective – and direct ad dollars to where there is the biggest bang for the buck. And structured real estate data can dramatically improve matching buyers to sellers, and reduce transaction costs for clients, all the while improving overall margins for the industry.
However, to do this, Real Estate brokerages need to embrace their inner CTO and become technology companies first, and sales organisations second. Until this happens, this industry will continue to lag the opportunity in front of them.
Doug Perlson is the CEO of RealDirect, a technology driven real estate company.