Some industry observers have adopted Harvard Business School professor Clayton Christensen’s term “disruptive technology” to explain recent developments in real estate. Though it’s easy to point to the World Wide Web and advancing technology as the main changes in real estate, that’s only part of what’s shaking things up. Essentially, the real cause of disruption is not just technology, but technology-enabled real estate consumers.
Who are these Web-enabled consumers?
According to the National Association of Realtors (NAR), more than 80 percent of homebuyers now begin their home search online. The popularity of online real estate ads surpassed newspaper property listings back in 2001, and the gap is widening. You must advertise online because your potential clients “live and die” by the Web. They just do not know any other way. And the trend will continue to grow. Just remember, these web-enabled consumers do everything online, from dating to anything you can think of.
These consumers are tech savvy. They know what they want and where to find it. And if they don’t, one of their friends will. They also want to act on their time. They resent being pressured to act. And not least important, they have been accustomed to have free and unlimited access to information in every single aspect of life and real estate is not an exception. They are willing to pay but based on the value of the services received.
So, if you believe that you can survive without the web you are committing suicide. It is not going to happen.
On the other hand, there will always be a place and time for the “face to face” contact between clients and agents. This, however, will be the exception and not the rule.
Who will survive?
Let’s face it. The consumer is always right. Moreover, they always tell you what they want. The problem is that sometimes we do not want to listen. We cannot handle change. Change hurts especially when it attacks the foundation of the business model that has existed for the last 50 plus years. Is this a generational thing? Yes to a large degree. The older you are the more difficult it is to accept that there are ways to buy and sell real estate. It is even more difficult to justify the traditional 6 plus percent commission structure. So it boils down to the efficiencies and economies of scale that only technology can deliver.
Those that have access to those technologies will survive and prosper, the others will simply become part of larger tech based real estate technology companies.
But at the end of the day, many agents will be displaced and there will be fewer agents as we know them today.
What do you think? Please visit http://www.homekeys.net/ and give us your comments.
Tomorrow's topic : Displacement
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