A cooling real estate market may mean an era of cost-benefit analysis of what technology works best for agents and clients.
What goes up must come down. That seems to be the case today for stock prices and workforce numbers that could rise in the wake of the tech-fueled pandemic.
In the world of residential real estate, look no further than Redfin and Compass. Both platforms, known for using online trading more than traditional brokers, have announced layoffs. Earlier this summer. RE/MAX has announced plans to cut 17 percent of its workforce this summer. Most of the positions are expected to come from the BrokerBudge platform, a customer relationship management tool for brokers and agents.
Does this mean that the real estate world, which has been slow to embrace technological innovation, has rejected disruption and continued business as usual? Not exactly.
But as the real estate industry moves beyond the pandemic, it could mean an era of cost-benefit analysis of what technology works best.
at home? Or imported?
“The troublemakers are kind of disturbed. But at the end of the day, we are human. At the end of the day, it’s a very emotional and important part of us, our family and our portfolio,” said Marilyn Wilson Lund, founding partner of real estate advisory firm WAV Group. You need trustworthy people. I think what technology can do is make things easier. Makes it clearer.
What makes the cut in real estate technology versus what can be easily broken down? RE/MAX’s dismissal of the budget may indicate that customer relationship management services are undervalued, but the company still plans to outsource them through kvCORE, a platform that technology providers in real estate offer — meaning RE/MAX doesn’t need to. High capital investment to develop its own technology arm.
There is still plenty of room for technology in the real estate industry. But maybe the brokers themselves don’t go to all the trouble of research and development.
Customer relationship management software, which provides everything from market statistics to other information to help manage customer relationships, is still very important to brokers, Lund said. Other offerings in what she calls “customer-for-life technologies” help maintain customer relationships.
Milestone’s platform connects brokers and homeowners, as well as between buying and selling something like homeowner management software (think: making repairs or appliance manuals accessible to all). It also means a reliable source – the real estate agent – the conduit between the owner of the house and, for example, the repair technology and the uncertainty of the various customer review sites.
“It gives the client the opportunity to continue to rely on the real estate agent, to be honest, well connected in the community,” said Lund.
Still a key recruiting tool
Brokers taking a selective, streamlined approach to technology doesn’t necessarily mean an era of major tech and real estate industry accounting disruption is coming. Both Compass and Redfin continue to be forces to be reckoned with in the markets they serve.
Even last week, Compass CEO Robert Refkin said he thinks the technology the broker offers will be enough to “kill the competition.” It may stop paying agents cash and stock. associated with him. The smart talk, however, comes as Compass sinks into the red from the national real estate market.
Still, given the uncertainty of how much technology to inherit—and the enormous resources it would require if it were developed and managed in-house—the real estate firm should remain a recruiting tool.
“Technology is obviously extremely important in the real estate industry. A lot of companies have done it all, and it worked for a time when the market was absolutely crazy,” said Larry Rideout, founder and CEO of Gibson Sotheby’s International Realty. I guess it can. The relationship in the business will be more important.”
Although the housing market has been hit by higher interest rates than in the early years of the pandemic, the world appears to be moving past the pandemic and returning to more physical business.
This means less desire to compete for action against multiple competing offers, unseen visions, and a return to the traditional wheel and reliance on personal relationships.
Those from traditional brokers see it as a recruiting tool.
“We feel that our firm can handle these things. For us, it’s an opportunity to be a flight to safety for people who are out of place, who maybe blink or can’t keep the model they promised their agents,” said Al Baker, chief operating officer and executive vice president of brokerage firm Jack Conway & Company.
