Real Estate Investor Magazine South Africa April/ May 2020 | Page 32

SELLING
Digitalisation of real
estate agents
Mixing new tech with old techniques
D
igitally the world seems new to the elderly, the slightly
backward and not as digital as the digital age needs them
to be. Digitalisation in the real estate sector is brand new,
and the sector is in the process of adapting to the changing ways
of doing things. Moreover, all the signs and traces of success are
visible in the sector.
Real estate agents are a primary example of the adaptation of
the sector to going digital, the implementation of well running
online sites and property apps is also a sign that the sector is on
the right track. Today the overarching conversation among big
players in the sector is the usefulness and impact of traditional
real estate agents when compared to online real estate agents.
As such Leadhome’s John Murray explains why, in the property
industry, online versus traditional estate agencies is a false choice.
Instead of asking the question of “Are online estate agencies
the way forward?” John Murray, Chief Technology Officer at
Leadhome, asks where should technology and estate agencies
meet?
“To answer this question, we need to look at what problems
technology can solve in real estate.”
To solve the debate over online versus traditional estate
agencies, Leadhome looked to learn what customers, buyers and
sellers, really want. The outcome of their internal research gave
some insight into customers’ needs and pain points.

What do customers need?
A good result - The buyer wants the right property,
at a reasonable price, and the seller wants a good
price and a quick sale.
Expertise - Customers are trusting an agent with
their biggest financial asset, so they need someone
who knows what they are doing.
Convenience - Customers don’t want the hassle.
They want good, consistent service, and someone
to guide them.
What are customers’ pain points?
Bad service - Across the board, bad service is the
biggest complaint. There is a huge variation in the
quality of service, even among agents within the
same franchise.
Tedious fragmented process - The buying and
selling of property is a tedious process, not aided by
what traditional estate agencies are offering.
No transparency - Customers have no idea what is
going on during a sale. The process can take up to
six months, and there is usually no visibility about
what goes on during that time.
High commission rates and hidden costs.
According to Murray, “Technology eats these problems for
breakfast.” Many other industries have solved these problems
using technology, so why has real estate lagged in this area?
When compared to many other sectors in the corporate space
and across the board, the real estate space is a lot harder to disrupt
than other industries.
“Other industry disruptors like Airbnb and Netflix are operating
in a space where you have high frequency, low-value transactions.
There is no real commitment required from the customer to try
a product. If they don’t like it, there is no major loss on their part,”
says Murray.
“Property sales, however, operate in a space of high-value, low-
frequency transactions, making it that much harder to disrupt.
What really counts in this space is expertise; informed, contextual
advice and human reassurance. And technology sucks at these,”
He adds.
What is the solution?
For the majority of the real estate market, an online-only model is
not sufficient and isn’t likely to add value. Local agents still have a
key role to play in most transactions. So, if the agency is not online,
what does it look like?
“Think of it on a continuum with traditional agencies on one
side and online-only on the other. On the traditional side, there is
very little technology, and high human interaction, on the other
side, there is maximum use of technology and very little human
interaction. Most of the major disruptors in the real estate industry
fall in the middle of the continuum. We call these hybrid estate
agencies. Many of these start as online-only and then either curve
towards a more hybrid model, or go out of business,” says Murray.
Why hybrid is the answer
The traditional agent builds relationships, markets themselves,
canvasses, gets to know their market, does marketing evaluations
and pricing guidance, photographs properties, gives legal advice,
lists properties, vets potential buyers, negotiates offers, conducts
interviews, prepares contracts and more.
“No one can be an expert in all of that. Estate agents jump from
one task to another, and this kills efficiency,” says Murray.
A hybrid agency looks at which of these jobs is best done by
an agent – such as building relationships and trust, knowing
the market, negotiating, and leaves the rest to specialists and
technology.
“This model is a smart combination of humans and technology,
local property experts and specialists enabled by technology,
online customer self-service, automation and AI, this is why online
versus traditional estate agencies is a false choice – the future of
real estate is tech-enabled but delivered by humans,” says Murray.
Does it work?
“The proof is in the pudding,” says Murray. The average Leadhome
agent sells four times as many properties as the average agent in
South Africa. In the current buyer’s market, one in five properties
sell at or above asking price compared to the national average of
one in 50, and properties sell 31% faster. “We have had just over
300% growth in listings of clients since 2017 and more than 400%
growth in sales,” reveals Murray.
His best advice? Invest in technology – there is no way around
it. The most impactful piece of technology is CRM (customer
relationship management).
“Data is everything – you can’t optimise what you can’t
measure. To be able to extract your data, manage it and learn from
it will be critical to the industry in the future,” concludes Murray.
SOURCE Leadhome
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APRIL/MAY 2020 SA Real Estate Investor Magazine
SA Real Estate Investor Magazine APRIL/MAY 2020
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