All Forum Posts by: Alex Tkachuk

Thank you for the response Roger, I enjoyed your thoughts. 

Much has been made of how millennials are changing how business is done across a variety of professions, and a great example of it is the real estate industry.

Millennials, for the most part, grew up entirely in the digital age, and because of that, they have different expectations of the home purchase process than their parents and grandparents did. They want things to happen quickly and have little patience for the slow, outdated processes that have largely made up the real estate process throughout previous generations.

As these demands increase, so does the pressure on real estate agents and brokers to perform at a quicker rate. The problem is the majority of the profession is still using antiquated software and technology that isn’t compatible or connected, and as a result, delays continue to be a problem. This leads to disgruntled agents and clients.

Brokers, especially those with a large number of agents on their teams, are having difficulty with communication as flexible work hours become more popular and digital platforms are used to provide updates and complete transactions. Email is often relied upon, but still difficult to track and stay on top of as inboxes get cluttered and days get busier. Time and capacity become real hindrances.

Lenders are an extension of the real estate team. If a broker is generating hundreds of leads every month and referring many of those to lender partners, it gets even more complex. Often times, there isn't a way to track things like appointments, pre-approval statuses, etc. The disconnect and constant communication barriers without an ability to have all of the information and updates in a single platform becomes hugely burdensome.

Agents spend their days accessing a variety of platforms to get their jobs done – whether it is the MLS, email, CRMs, transaction management platforms, market analysis software and more. All of this while trying to keep up regular communication with clients and providing updates to their lender and broker.

Meanwhile, the millennial buyer is waiting and expecting swiftness.

What does all of this mean? Well, it means that for the most part, the real estate process is broken as it is currently constructed, and sales pressures keep agents and lenders constantly stressed out. What needs to happen is for all of us to take a step back and look at the process and realize there needs to be another way.

Instead of being threatened by change, the real estate industry must accept that it has to happen for all of us to continue to thrive and grow as a profession. The right technology should be leveraged so that agents and lenders can begin proving their value to consumers by being faster. That can happen by using scalable tools that will set them apart.

Those tools should create the ability to manage an exclusive agent referral network, connect with lenders and follow the escrow process in one single platform, with one login. This technology needs to be all-encompassing when it comes to a real estate transaction so we aren't logging in and out of different platforms with a variety of usernames and passwords. This way, an entire real estate team can see exactly who is doing what and which milestones have been hit. All parties in the process should be able to see this information so everyone is on the same page.

The answer is pretty simple: We need to be able to manage, track and automate the end-to-end real estate transaction. We also need to agree that information siloes are bad for business and bad for the client.

So, to recap, meeting the demands of the modern homebuyer requires all of us to recognize there is a problem with how things have always been, accept that change is needed and seek out solutions that solve those problems.

I want to hear from you – are you experiencing these problems, and if so, are you doing anything to solve them?

Predicting what the real estate industry will look like beyond 10 years is hard, but I can safely say this: Within the next decade, real estate agents will no longer be showing homes – with exclusion of the luxury market.

Buyers can already do a bulk of the home-shopping process online – from access to all available homes, detailed information about neighborhoods, to top-rated real estate professionals, including agents and lenders, to getting pre-approved. The only reason they connect with an agent is because the process requires it in order to move forward.

Millennials are the largest share of home buyers – a whopping 36 percent – and this number is expected to double within the next decade. What does this mean? Millennials have been brought up in a society of “NOW” and “instant gratification,” and this has become the catalyst for disruption to many markets, including stock trading, the taxi industry and retail, to name a few. What is important to highlight is that what is common in any disruption is that when you make something less costly, frictionless, and available, it expands the industry.

Let me elaborate on this a little.

About 20 years ago, if you wanted to buy or sell stocks you were required to call your stock broker to execute the trade. When a platform was created that provided the capabilities to each independent investor first, it reduced the cost significantly, and then the industry grew by more than ten times. The same can be said about the taxi business when Uber came into the picture and the retail industry with Amazon.

The point I am trying to make here is that when you remove the gatekeepers, and connect the silos only then will we will see true disruption in the industry.

So, what will this look like for the real estate industry in 10 years? Let’s discuss.

Increase in Number of Homes Sold

Complete disruption once we remove the friction and complexity of buying/selling a home. This includes: providing the ability to get pre-approved online with a few clicks; finding the home you like on any of the current real estate search portals such as Zillow, Trulia, Realtor.com; scheduling a showing directly on those sites without the need of an agent (which can easily be accomplished with preapproved-verified buyers); submitting an offer; and having access to all parties involved in the transaction, including vendors.

This will create a massive boom in the industry, as we can expect to go from 5 million homes sold each year, to 10 million.

Decrease in the Number of Agents

What about the two million licensed real estate agents? Well, the Danger Report commissioned by National Association of Realtors and researched by T3 Sixty, sums this up well:

“There are too many real estate agents that are simply not qualified to the level they should be. When combined with a lack of basic competency it could be destructive and harmful to both the industry and the consumer.”

I believe that we will see a very large decrease in the number of real estate agents – possibly from two million to 500,000.

The real estate agents of today and in the future though still will need to guide buyers through the closing process, providing expert advice and helping keep things on track and organized. With people making such a large purchase (likely the largest of their life), I believe having someone to communicate with in person or over the phone will always retain its value. In other words, showing agents will merge into transactional agents – instead of running around showing homes to 10 active buyers, they will sit behind their desk and provide any assistance needed over the phone to 50 home buyers going through the buying process.

The transaction process on the agent’s side will be completely digitalized where the client, agent, lender, transaction coordinators, escrow and vendors will all be connected. Real estate agents of the near future will be amazed at how inefficient the process is today – the same way we are amazed at how the process was in 1997 with the MLS Books.

Reduced Commissions, More Transactions

Yes, like all industries that have been disrupted we should expect to see commissions reduced significantly. However, this should not alarm the agents because while they will make less per transaction, the amount of transactions will significantly increase.

Agents of the future will still be able to rely on earning a substantial amount.
Agents Should Be Preparing Now

Essentially, agents will become better at their jobs because buyers will be more educated coming into the process and the tools and resources will be there to assist all parties involved.

There will be a learning curve for those established real estate agents who have been doing business a “traditional” way for several years. Those who adapt to the demands of online consumers, however, will see the most success because they will be delivering a better experience, and those experiences will lead to positive ratings, and ratings, as you know today, are the next generation of online gold.

If you haven’t begun implementing more technology in your business, I highly encourage you to start now.

Efficiency isn’t something you will see right away by adopting innovative platforms because there will be a learning curve, but once it becomes part of your business process, it certainly will change for the better. And if you are working with the right technology vendor, they will have the right amount of training and customer service available to make sure the transition is as seamless as possible.

For those worried that the job of a real estate agent will go away because of technology, I say this: If you agree to become more of an advisor to the client during the transaction, providing guidance and resources, while leveraging current technology and doing everything you can to stand out from a customer service perspective, then your job will never go away.

Innovation will continue at a rapid pace though so make sure you follow it close and become an early adopter as much as you can.