What Is PropTech, and What are its Implications for the RE Industry?

I attended the REImagine Conference hosted by the California Association of Realtors earlier this month.

A session about the changing brokerage industry brought a term to my attention that piqued my interest - ‘proptech’. In my previous role in corporate America I had sold software into the Insurance and Banking verticals, industries that were rapidly being transformed by emerging technologies.

I dug into the term ‘prop tech’ in more detail below and explored the impacts it could have for real estate professionals and consumers alike.

Perusing articles, a name that kept coming up was James Dearsley (you can visit his personal website here - seriously do it, the guy is obsessed with PropTech). He defines PropTech as:

Proptech is one small part of a wider digital transformation in the property industry. It considers both the technological and mentality change of the real estate industry, and its consumers to our attitudes, movements and transactions involving both buildings and cities

Pretty vague, but a good start. From my understanding after visiting his website Proptech seems to be any and all technologies that can help change the way real estate is done today. It can affect every niche of the market, and its opportunities seem endless. (I recommend reading Vincent Lecamus’s article for a great summation by clicking here)

For consumers this seems like a really positive change. Real estate professionals often control the flow of information to consumers. The more transparency a consumer has into the market the better as far as I’m concerned.

Will PropTech disrupt real estate professionals livelihoods?

It depends. I’ve seen agents and brokers who use a veil of vagueness and disinformation to close transactions and collect commissions. I think that they will most likely have a reckoning with their clients and find it harder to earn money. I think real estate professionals who adopt these emerging technologies can use them to bolster their networks and close more sales. I’ve worked in several other industries that were ‘disrupted’ by new tech. The same pattern has emerged each time, with more information available to consumers, professionals will have to shift to becoming true ‘trusted advisors’ and find new ways to bring value to consumers in a new way (delivering new insights, more specific market knowledge that a technology can’t deliver, helping act as an aggregator of information for clients and consumers).

Happy investing!

John