The 7 biggest trends in real estate

People have been pointing to the sky for years declaring it’s all about to fall down on our heads–that REALTORS® will be wiped out by new technology in the same way the Internet devoured travel agents.

Bruce Gardner, real estate author and speaker, isn’t saying that exactly. But when he summarizes the seven biggest trends impacting real estate, it’s difficult not to take a gulp of air wondering to what degree technology will edge real people out of the equation – as it will do in other industries.

Speaking before several hundred members at the Fraser Valley Real Estate Board’s 2018 Conference, Gardner told the audience that momentous change is heading toward us like a tsunami to transform the real estate industry. It is inevitable, says Gardner, but he also reassured his listeners that change always offers opportunity – at least for those who are willing to grab it.

“You don’t have to like change, but you have to lean into it.”

Gardner’s comments are coming from an American perspective where regulation of the industry and the business culture is different from ours. Based in Colorado, he teaches continuing education classes for the real estate community and is a busy public speaker for industry groups. He is also the creator of the Seven Styles Success System for Realtors which he parlayed into a book.

Smart home technology

The first trend he delves into is smart home technology that uses Internet-connected devices to enable homeowners to control and monitor appliances, lights, thermostats, garage doors, doorbells and locks remotely using everyday devices such as smartphones and iPads.

Forbes contributor Bernard Marr who writes about big data and metrics has pointed to Internet-connected conveniences as one of the nine top “mega trends” of 2018, along with artificial intelligence and big data.

Even now some Fraser Valley sellers are using video surveillance technology to observe Realtors showing their property.

Gardner says it’s important for Realtors to know as much as possible about the cutting edge of smart home technology because new products and services will continue to stream in and they are conveniences that have strong appeal for consumers.

Virtual reality showings

Another huge trend says Gardner has been virtual reality (VR) which allows buyers to view a home from the comfort of their couch. VR realty tours have become a hot commodity because the quality of the images and visual experience is so high that it gives viewers a more realistic vision of a home than a few snapshots ever could. Gardner says VR is a great marketing tool for Realtors.

Big data

The other trend is what Gardner calls big data and it’s one that could come with some tricky privacy issues, at least in the Canadian context. Gardner projected slides of the website, which only requires a street address to kick out a comprehensive report about a property’s neighbourhood – everything from the school rates to air quality, flood risk, crime index, drug activity and the names of local criminal offenders.  It doesn’t stop there though. The area’s registered polluters, storage tanks and spills, environmental hazards, radon risk, airport noise levels and UV index are all part of its property profiles. There’s even information about the property owner’s financial history including whether they’ve had bankruptcy, foreclosure details, loan and equity information, and building permits.

The site is testimony to Gardner’s assertion about the new age we’ve entered – that everything is transparent and that information is obtainable by anyone, about anything. He says in light of the massive amount of data available, a Realtor’s role for the consumer is in the “interpretation and translation” of the data.

“That’s where our value is,” says Gardner, who has been a Realtor since 1992.

Then there are companies like Home Savi, a new California-based company that is trying to take a huge chunk out of the Realtor service by providing consumers with the tools to offer, negotiate and close on their own real estate deals – at a cost of $648 US. Many Realtors would say that ‘you get what you pay for,’ but one could argue that there are a lot of people who are willing to go to any lengths to save money. Home Savi has even partnered up with a mortgage company to provide what its website touts as a “streamlined buying experience.”

The Google interview

The fourth trend Gardner cites is what he calls the Google interview. He says consumers today use the Internet to look up everything and everyone, including prospective Realtors.

He says this is why Realtors should make sure to use their “web assets”to their business advantage. Web assets are anything searchable on the Internet that describes who you are and what you do.

“We live in a reputation economy,” Gardner says. “We need to be obsessed about our online reviews because that is our currency [in this economy].”

Gardner points out that in today’s Internet-based, social media environment, online descriptions and reviews of you and your skills, property and location specializations, and personal style serve as accreditation for potential customers.

The good news is that most people still prefer to work with a knowledgeable agent when they are dealing in real estate transactions, says Gardner. But the key to success is presenting yourself in the public realm in a way that makes potential clients feel some kind of social connection with you and gives them comfort believing their agent relationship will be a positive experience.

Gardner urges Realtors to define themselves beyond stating: “I am a Realtor.”  He says consumers want a three-dimensional perspective of who you are. “Be specific about what you do, and what you know.” If you have special knowledge of a neighbourhood or type of property, say that up front so that others have a more complete sense of who you are.

“This is called ‘social proof’ of your value as a Realtor. But it’s too valuable to buy. You have to earn it.  So, know your story. Write it out and put your reviews on your website,” he implores his audience.

Flat fee realty

The fifth big trend, says Gardner, is what he calls the flat fee realty. Enabled by technology, these real estate companies appeal to cost conscious buyers who still expect customer service.

An example is Redfin, a company founded in Seattle that gives rebates to buyers and charges half the regular listing fees to sellers. Instead of its agents working for commission, Redfin hires agents to work as full time employees to deliver a ‘consumer focused experience’ for clients. The salaried agents don’t take a commission; instead they receive bonuses if customers come back with positive agent reviews, which are posted under the agent’s profile on the company’s website. “Our mission is to redefine real estate in the consumer’s favor” reads Refin’s online declaration.

Then there is BlueMatch, a real estate company in Colorado that proclaims:

“The goal of BlueMatch is to disrupt the old fashioned methods in real estate… our main goal was, and always will be, making selling a home without a Realtor easy for anyone. “

Blue March agents will work with clients throughout the buying and selling process without charging an upfront fee.  Sellers are charged a fee at closing, but, they can get a full rebate on the condition that after the property sells, the seller will buy their next property through their company, or refer someone who does.

“We have to learn how to compete with this kind of value proposition,” insists Gardner. “You need to know everything you can when these companies come in.”

The iBuyer

The sixth big trend in real estate, says Gardner, is what he calls the iBuyer, which is a new business model in real estate whereby clients sell their homes to the real estate company for an agreed price and timeline. These companies, such as Opendoor, arrange a home inspection and will do any needed repairs – the costs of which are recoverable at closing. They take care of home maintenance and showings until a buyer is found. Meanwhile the seller moves on with cash in hand. Opendoor claims their average service charge is 6.6% – but in small print at the bottom of the website, it says that can go up to 12%.

At you can trade your house in after they ensure you have pre-approval on your next home; meanwhile they pay the bills, do the repairs on your old house – which you can pay for by rolling that expense into your next mortgage with them. The company will get you settled into your next home before they list your house, sell it, and pay you out in cash.

Venture capital

The seventh real estate trend Gardner identifies is venture capital from the digital industry which is making inroads into real estate and “creating a battle.”  Gardner says there is bound to be considerable jostling for market space in the next five to 10 years as new money and new technology upend traditional models of real estate buying and selling.

Gardner says that those who do exceptionally well now, will also do well through these transformative stages. He says it requires Realtors to be “smart, driven, emotionally resilient and good at solving puzzles.”

Above all he says “When you take care of the consumer, that’s when you have value. That will never go out of style.”