Last month’s announcement of Zillow Instant Offers has led to a lot of chatter (and some noticeable silence in the public realm) as real estate agents worry about whether technology will take away their jobs.
In fact, the fear is so real that 32,000 industry professionals have signed a “Stop Zillow” petition. However, as history has shown us time and time again (see: taxicabs, cable, newspapers, etc.), trying to stop a new wave of technological progress is a battle lost before it even begins.
As such, it’s important that real estate professionals embrace the discussion around the evolving role that technology plays in our industry.
Zillow Instant Offers is only the newest chapter of this ongoing serious conversation about technology’s role in real estate. And with more technical disruptions sure to come, we must find ways to leverage technology to our advantage rather than fight against it.
If we look under the hood, so to speak, Zillow Instant Offers isn’t as big of a threat as agents may have first imagined.
It only works if sellers are extremely motivated — so much so that they are willing to pay fees for a diminished sales price and fast cash.
In the almost two months since Zillow Instant Offers launched in Las Vegas and Orlando, the technology has only served to act as a lead gen tool for agents; homesellers have often opted to sign an agent instead of following through with selling immediately to an investor.
The significance of Zillow Instant Offers is not that it will replace agents (it won’t), but more so that this announcement has served as a much-needed wake-up call to the industry.
Technology is here, more is coming in a tidal wave fashion, and the way to prepare is not by signing a petition.
The real disruption is on its way, and it will likely come from Google, Amazon or another player in the digital consumer marketplace.
Why? These companies:
- Have huge amounts of data on everyone
- Monitor the daily actions of users (just think, how often do you Google something during the day?)
- Are the first touch points people have when they start thinking about buying or selling a home (researching the market, checking comparable home values in the area and even when looking for a listing agent)
- Invest heavily in the ability to understand consumer behavior and predict their next action (in fact, it wouldn’t be a stretch for Google’s behavioral analytics platform to predict when a consumer is ready to buy a new home before the consumer even realizes it). With all this real-time data, Google will know when a consumer is looking to buy or sell a home before they’ve even picked up the phone or sent an email to enlist an agent.
Even though those companies have an advantage on the data front, there are three absolutes only agents can provide:
Offering a personalized white glove experience
Great agents know how to create a personalized luxury experience for each of their clients throughout the sales process, which a website or device simply cannot offer.
Think about the experience of walking into a Tiffany & Company. as compared to walking into a Target store. At Tiffany & Company, you can expect personal attention and expert advisement from an associate throughout the entire purchasing experience.
At Target, you largely navigate the purchasing journey on your own, and store associates may or may not be able to help you find exactly what you’re looking for.
However, when shopping on the two companies’ websites, users will encounter essentially the same search and purchase capabilities, such as “add to cart” technology, live chat and the checkout process.
There is an element of knowledge, experience, luxury and personalization that simply doesn’t translate to the online experience.
Understanding the emotional impact
Buying and selling a home is usually one of the largest purchases that most individuals make in their lifetime and thus, an emotional experience.
It’s simple to purchase groceries or a birthday present online without giving it a second thought. But for most people, buying a new home, especially their first one, represents the realization of a dream and deciding on a permanent place to call home.
Additionally, the buyer is often about to hand over a large chunk of their life-savings and make a 30-year commitment to paying a mortgage.
A good agent understands the emotional elements of this process for the buyers and sellers, and doesn’t treat it as a simple, formulaic transaction.
Guiding buyers and sellers
Agents should be trusted advisers their clients can trust to represent them, understand their situation and give honest advice.
Technology can use certain algorithms, follow strict parameters and return search results, but it doesn’t understand why those parameters were given, offer feedback based on experience or market knowledge, or alter search criteria.
Additionally, a technology platform can only be programmed to identify a buyer and make a connection. It can’t understand the look that a buyer gets when they first walk into their dream home — or advise them not to buy a home that didn’t give them the same reaction.
There’s no doubt that technology will continue to flip the real estate industry on its head in the next decade. Those who ignore or fight technology will simply be replaced.
However, those who embrace new technologies as a way to enhance their existing skill sets, understand how to pivot as the industry evolves and hone their ability to deliver a superior experience to their customers will be around for a very long time.
Anthony Hitt is the CEO of Engel & Völkers Americas in New York City. Follow him on Twitter or Instagram.