

Can Real Estate Brokerages Survive As Software Eats the World? - philipdlang
http://blog.suitey.com/can-real-estate-brokerages-survive-when-software-eats-the-world

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ezl
my, 2 cents, as "Yet another real estate tech founder":

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.

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jasjitsingh85
I think the biggest issue is that they are un-accustomed to technology - most
of the real estate agents I've interacted with see it as a necessary pain-in-
the-ass, not as something that makes them more productive. I think this will
probably begin to change as "digital natives" become more influential in the
industry.

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flinner
Does anyone actually think the bigger brokerages will start innovating with
technology? I don't see much changing from the status quo, but I'm not in the
industry.

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ezl
they try.

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.

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austincb
Who does the technology benefit more, the brokerage or the client?

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davidwalker20
In today's world the search technology benefits the client, and the efficiency
technology (like CRMs) benefit the brokerage. The problem is, cost of
brokerage fees haven't changed. There is clearly much more room for
improvement.

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philipdlang
Would love anyone's thoughts on this post!

