Fairly or unfairly, many consumers would be happy to see the demise of real estate agents. And there are no shortage of people trying to make it happen. Uber has decimated the taxi industry on a global scale.
As a result, every industry is looking over its shoulder in fear of the one concept or idea that could Uber-ise them. Digital disruption will impact on the real estate industry in the near future. Whether it is a total game changer that diminishes or devalues the agent’s role remains to be seen.
Respected Financial Review real estate journalist Robert Harley recently wrote: ‘In New York, technology experts agreed the global property industry will soon see a rush of fixed price, no commission and highly automated peer to peer websites.’ Harley was reporting on a real estate technology conference where digital disruption was high on the agenda.
The stakes are high; so are the rewards for those that get it right when it comes to digital disruption. In the mid 1990s, realestate.com.au did not exist.
Today it is a $7 billion company. Fairfax recently released their half year results. Domain, the real estate website, is essentially propping up the parent company.
The Internet has made it easier for buyers and sellers to engage directly than ever before. The majority of attempts to Uber-ise real estate have been companies encouraging and coaching vendors to go on the market as private sellers, avoiding agents’ commission. Buy My Place is the largest company in this space.
Their slogan of ‘No Commission, Lots of Help!’ pretty well sums up the offering. Buy My Place plan to list on the stock exchange in the near future. It’s fair to say they are not going away. Good news for consumers; may-be not for agents.
Many of the people featured in video testimonials on the Buy My Place website are classed as ‘successful sellers’. This is an interesting description in that it is undefined what a ‘successful seller’ is and should be. Just like real estate agents, Buy My Place is classing someone that ‘sells’ as having made a ‘successful sale’. This is the same as agents that spruik the importance of ‘clearance rates’ without any regard for the quality of the price achieved.
Teena and Andrew Hubbard sold their home using Buy My Place. They were interviewed by Harley and quoted as saying ‘we have no idea why people would sell with an agent’. The Hubbard’s have sold twice without using an agent, so their assessment of estate agent’s will be confronting for the industry that has felt indispensable for so long.
Real estate agents have had people believe that high clearance rates are the key to a good agent. Now the disrupter’s threaten to put sellers and buyers in direct contact, sellers can achieve their own high clearance rates without paying an agent’s hefty commission.
If the real estate agent is not going to be ‘Uber-ised’ they are going to have to focus on getting ‘high prices’ for their clients, not high clearance rates for themselves.