“The thing we need in real estate is more buzzwords about tech,” deadpanned Craig McClelland, vice-president and chief operating officer of BHGRE Metro Brokers in Atlanta.
So began one of the more compelling panels at RealTrends’ “Gathering of Eagles” conference in Colorado Springs – “Intersection of tech and brokerage.”
Any real estate talk about technology can degenerate into to just saying the word “technology.” “We talk in generalities so much when it comes to tech,” said Joe Skousen, CEO of Core Division at Inside Real Estate.
But the panel seemed to arrive at a few key observations.
- Zillow won.
The biggest real estate tech change of the 21st Century is that anyone can look online about what homes are for sale, information that the National Association of Realtors was once able to closely guard on behalf of its member agents.
Today, consumers go to Zillow, and to a lesser extent, Redfin and Realtor.com. Brokerages largely waved the white flag in building competing home listings sites.
“Don’t go out and build a consumer-facing technology,” McClelland advised.
There are consequences to surrendering, one of which is that agents can spend hundreds of dollars a month to Zillow for leads, just as Zillow itself enters brokerage.
“Who here is experiencing commission compression and profitability compression?” Skousen rhetorically asked the crowd at the Broadmoor Hotel. “Are your agents working for Zillow or are they working for you?”
- Zillow lost.
Former Zillow CEO Spencer Rascoff “said in 2006 that there wouldn’t be any more brokers,” McClelland noted.
One of the most cited stats at Gathering of Eagles is that, per RealTrends, more people surveyed in 2018 (90%) use a real estate agent in buying a house than in 2001 (81%). If technology has not replaced real estate agents, it could be more opportunity than threat for brokerages.
For example, McClelland said that BHGRE’s “operational technologies on the back-end of the house” – in other words, tech that handles paperwork, consistently save the real estate brokerages money.
Lane Hornung, CEO of Zavvie – a Boulder, Colorado-based software platform, mentioned technology that “captures” consumers, increasing the odds that they will use the brokerage for title and mortgage services. Hornung did not explain this technology, or if it was much different than a Google calendar reminder.
- This is not rocket science – but is it still too hard for real estate brokerages to do in-house?
Andrew Binkley, president of Constellation Software, was describing how he contracted with the Florida Realtors association on a technology deal. The tech in question? A tool that lets parties do an e-signature.
For brokerages, this is a dilemma. Aren’t there dozens of software platforms they could upload right now with an e-signature function?
On the other hand, is it best to let tech people do tech things? That’s the thought of Binkley, to be sure, a biased observer. “It always costs more money than they think it is going to, and then they turn around and sell it to us.”
Compass, HomeServices of America, Keller Williams, and RE/MAX have touted in-house tech and outside acquisitions in the last two years.
Still, when to create in-house and when to acquire tech is hardly an existential question. The panelists, Binkley included, said that tech has lost its ability for now to ruin brokerage.
“I think we are going to continue with the current trends,” the Constellation president said. “Any change is gradual.”