The Clozio team was in attendance for Joel Singer's Keynote Address at REimagine 2019 in Los Angeles. Joel shared many messages of hope and opportunity for the real estate industry. He described the overall sentiment of the industry as very worried, but that real estate professionals should be facing the change with confidence and see it as an opportunity.
Let's dive in:
How has the general consumer economy changed?
- The internet has taken over. Internet per 100 inhabitants in developed countries – 81% have internet.
- How we pay: We use Amazon, Apple, Google Pay – physical credit cards are now even being phased out.
- How we meet: Online dating is now the norm
- How we watch: We used to go to movie theaters, now we have streaming from our living rooms
- How do we eat: We can order from any restaurant with a tap of a button.
- Most industries have been shaken up (travel, tv, music, transport, retail etc.).
How have brokers changed?
- A lot of money is flowing in at a tremendous rate. But the industry as a whole hasn’t changed that much.
- In 2018, 91% of sales were assisted by a real estate licensee and in 1990 – It was 90%. Overall, the industry has held its own, even with all the technology that has flowed in. There might be compression for commissions but property prices have increased and many costs for managing a brokerage have come down. Also, for the industry as a whole, overall profitability hasn’t decreased.
- However, technology is changing our day to day, and realtors most want technology to help improve their communication and information access.
- An agent's vulnerability is creating a compelling customer experience, but it isn’t simple. Technology can solve parts of the customer experience, but not the entire thing. The process today is VERY complicated.
- And clients currently really dislike the home-buying experience and are demanding to see improvements in their experience.
- But clients still see a lot of value from using an agent, and that isn’t changing even with the influx of technology and iBuyers. Most clients want a real estate agent because they want the trusted advisor and counselor. Which means there is a real opportunity here to leverage this client need and deliver an exceptional experience, not unlike a financial advisor.
What does this mean?
- All truth passes thru 3 stages. You ridicule it, you violently oppose it, then you accept it as self-evident. Agents need to make sure that we don’t become dismissive, arrogant, distracted. If agents do, we’ll go bankrupt like travel agents.
Now the question is, are iBuyers – a niche, a real threat or an opportunity?
- Agents should not be fearful of iBuyers, it isn’t for everyone, especially in high price markets. And per Morgan Stanley, they are projected to hit 3% of total transaction penetration by 2030.
- And there is a cost to the convenience – traditional sales net more money for the seller, and lose out on 6-7% when they go through an iBuyer.
- Where could this lead? If in fact an iBuyer creates convenience and a more convenient transaction will increase the total number of transactions. Despite the protest on price, iBuyers are also taking a larger commission than the industry norm. This creates an opportunity for agents. iBuying becomes another tool in the agent’s arsenal. It helps create a floor price, and allows you to be more efficient.
Joel's closing thoughts:
Agents have things to worry about, but you shouldn’t worry about the changes. Each day that you work, you work with real live people with families, who are making decisions based on your expertise and knowledge. This consultative approach and complex human need can’t be replaced by technology. But it can be enhanced with technology.
Don’t get left behind. Look at change with a positive attitude.
What do you think about Joel's perspective and outlook on the market? What opportunities are you seeing in providing a better customer experience to clients?