Can Real Estate Brokerages Survive As Software Eats the World?(blog.suitey.com) |
Can Real Estate Brokerages Survive As Software Eats the World?(blog.suitey.com) |
1. Slightly linkbaity title (sorry @phil) -- Obviously real estate brokerages "survive" in some form. Great software streamlines. Most of the software out there is just a pain in the ass. But no software will REPLACE brokerage, in the same way that ATMs haven't replaced banks and point of sale systems haven't replaced checkout clerks (entirely).
2. What it will mean though, is that the best brokerages will be very tech enabled and be able to operate at much higher leverage w.r.t. human capital than ever before (once the tools are in place). "Real Estate Brokerage" as a profession is a collection of related tasks -- some which can be automated, some which can't. Reliably removing the rote, repeatable components will let really good brokers/brokerages focus on the hard to automate, human elements and do their jobs better and bigger than they do now.
One consequence of this is that the richest brokers and brokerages will get richer and the poor ones will go out of business. There will be less options in the marketplace. This is bad.
Right now, the spread between a top rental agent and an "average" rental agent is the difference between 500k/year and probably 20k-30/year. In sales, the divide is even bigger because the transaction cuts are bigger.
That divide will get bigger as tech adoption becomes the norm.
i've worked with agencies big and small, and above a certain size threshold they'll typically have some sort of in house IT staff. These tend to be generalists and don't "do software" the way "we" (hn, silicon valley, anyone who knows what techcrunch is, who has heard of fog creek) do.
they often hack together brittle solutions, do a lot of herky jerky deployment efforts that never make it to the finish line, allocate 25k to a local development shop and end up unhappy with the deliverable, etc.
Software is hard. it is fraught with challenges. but many businesses, real estate included, assume that it can be done well with a minimal spec and non-expert developers ("hot shot CS graduate with a 3.8+ GPA" is NOT a sufficient condition for assessing excellence and ability to ship code).
So they fail.
And they often then claim that tech is the problem and that developers are incompetent. It's a very long uphill battle to explain how you can deliver better, faster, at a fraction of the cost.
But we can.