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The Digitalization of the Real Estate Industry: Is Tech Taking Over?

Oct 17, 2019 by

The world of real estate is shifting. Is technology taking hold of an industry that was traditionally all about in-person interactions?

Relative to other occupations, real estate careers are low on the list of digitalization. According to a new report from the Brookings Institution, Digitalization and the American Workforce, real estate, including the rental and leasing segments, scored a 45 mean digital score in 2016. Scores range between 0 and 100, with those over 60 considered high digital occupations. But since 2002, the industry has made strides, with its score increasing by 19 points, up from 26.

While clients are still at the heart of the transaction for the majority of brokerages, other segments of the business have dramatically changed from just a few years ago. The digitalization of the industry is slowly progressing, and brokers and agents have different things to say about the benefits, challenges, opportunities and how to best adapt to a world run by tech. RISMedia spoke to three industry experts to gauge what their experience has been thus far, and where they see real estate tech going in the future.

Human at Heart
While viewpoints are mixed, they all share one similarity: Real estate will always need the human touch.

“Ultimately, when a consumer buys or sells a home, it’s one of the most emotional moments of their life,” says Mitch Robinson, chief marketing officer of eXp World Holdings. “For this, digitalization is not the key. Having a great local, personal advocate that is your real estate agent—that’s what matters most.”

Dustin Cheatham, a REALTOR® with CENTURY 21 Select Real Estate, Inc. wholeheartedly agrees, standing firm that websites and automation are not posing a risk to the agent career, and that the value will always be there even for consumers who embrace technology.

“Tech-savvy people are still choosing to work with REALTORS® and even pay a traditional commission amount,” says Cheatham. “The No. 1 reason is because this job is so complex. Homeowners’ lives are too busy to try to do a REALTORS®’ job better and more successfully and save a commission.”

Cheatham says agents can save clients from being taken advantage of and “save them from a failed transaction,” and that’s why they’re worth the commission.

Cheryl Eidinger-Taylor, COO of ERA Key Realty Services, has seen a huge focus on the digital in recent years. Some of these tech-driven tasks include:

  • Searching on mobile devices
  • Sharing and signing documents on a digital platform
  • Negotiation and communicating via text or email
  • Connecting with clients through social media

But she agrees that there are some aspects of real estate that will remain human.

“There are still many things that the consumer wishes to do in person, so while digitalization has streamlined many aspects of the process, it has not taken away the decision-making pieces that remain, for most consumers, a personal experience,” says Eidinger-Taylor. “For the typical home-buying consumer, viewing homes would be one of those things that is still preferably done live and in person.”

Is Digital the New Way?
All of this doesn’t mean that other parts of the business haven’t benefitted from a technology takeover, however. Eidinger-Taylor says she’s seen a shift toward the digital approach, especially to keep up with the busy lifestyles of today’s consumers.

“One example of this is the signing of an offer or the initialing of the changes in a negotiated offer,” she says. “This no longer requires a sit-down in person, or two people driving to meet by the side of the road for initials.”

For a brokerage like eXp, technology is a major focus, and they’ve seen extensive growth because of that. Robinson says over 23,000 agents engage in eXp World, the company’s virtual office base, which helps facilitate less time-consuming communications while still keeping things engaging and interactive.

“At eXp Realty, digitalization has become a big part of our success,” says Robinson. “It allows our agents not to have expensive brick and mortar locations and promotes real-time engagement. Agents can get advice from other agents, attend real-time training, and more.”

CENTURY 21 Select Real Estate has also embraced the digital, according to Cheatham. He says his brokerage has “fully integrated into the digital space.”

“We’re on social media, consumer websites, follow-up campaigns with clients,” says Cheatham. But he maintains that clients need a lot of non-digital help too.

“All the tech is wonderful when it saves time and we love that!” says Cheatham. But when it comes to things like consultations, he says actions like “looking with our eyes, doing things with our hands like changing out a door handle, rearranging some furniture for better service,” and more, is done “in an efficient way with human power.”

Leveraging Technology, the Right Way
It’s not just about diving headfirst into the latest gadgets, say experts. Brokerages and agents should solely focus on technology that helps to streamline and automate.

“There is so much technology in the real estate space and more available each and every day,” says Robinson. “The key is measuring the effectiveness of that technology. I’ve been saying for a long time, the best technology is the technology you will actually use to run your business effectively.”

Eidinger-Taylor says her brokerage has been attracted to programs like dotloop because it’s largely automated and helps in storing and signing documents while keeping the data secure. They have also moved their telephone systems to VOIP (Voice Over IP) and cellphones, embraced social media, and offered training on all of their tech tools to keep agents and brokers up to date on how things work and what some of the legal ramifications are in terms of data security, wire fraud, etc.

“The impact is positive in that things can be done more conveniently for the consumer and that real estate professionals can spend more time doing more productive tasks for their clients,” says Eidinger-Taylor.

She’s seen the following benefits from moving to a more digital approach for communication modes, searching platforms and transactional tasks:

Drastically cutting down on driving time
Enabling clients to bid more quickly in competitive situations
Allowing agents to do more research at their computers instead of driving to town halls

But, she says, “the negative implications are those that occur when the digital replaces personal completely.”

That last statement is something Cheatham can relate to, suggesting that if agents and brokers are worried about “websites carving away at their jobs or commissions,” it’s probably because they are focused on the wrong thing.

“The way to view this career is as a customer service industry,” says Cheatham. “With our own intuition and creativity, agents can demonstrate value in just about every customer situation.”

Finding a Balance
While going paperless and digitizing office processes can be beneficial, it should always be about making a real difference for agents, says Robinson.

“In the future we will continue to be agent success-obsessed, meaning understand our agents’ needs first, and then find the solution.”

Eidinger-Taylor says she expects there to be continuing breakthroughs in the tech space when it comes to real estate, stating her goal for the company is that they “innovate within our structure and embrace the products and tools that are most helpful to both the consumer and our professions.”

At the same time, with tasks related to connecting on a human level, she says there should be a continued focus on “voice inflection and emotions displayed” because they are critical to communicating with clients and co-operating real estate professionals.

“It’s important that we do not forget that buying or selling a home is a very personal and emotional experience, often tied to a life event,” says Robinson. “Digitalization is there for all the right strategic reasons, but if we forget we are ultimately working with a human being, we are all in trouble.”

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com

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Could Blockchain Revolutionize the Real Estate Industry?

Sep 28, 2019 by

(Above) John Heithaus, Heithaus Properties LLC, and Chao Cheng-Shorland, ShelterZoom, discuss “How Blockchain May Change the Future of Real Estate” at RISMedia’s 2019 Real Estate CEO Exchange. (Credit: Korin Krossber of PlanOmatic)

Blockchain has become a buzzword in recent years, and according to two real estate industry experts, the tech phenomenon is worthy of the buzz.

John L. Heithaus­, principal of Heithaus Properties, LLC, and Chao Cheng-Shorland, co-founder and CEO of ShelterZoom, discussed this innovative technology at RISMedia’s 2019 Real Estate CEO Exchange in New York City last week.

During a session titled, “How Blockchain May Change the Future of Real Estate,” Heithaus noted blockchain is making “substantive changes” in many other industries, including financial services, healthcare and homeland security. Now, he said, it’s the real estate industry’s turn.

Heithaus­ suggested the home-buying and -selling process is still too complicated and slow, and it needs to evolve to accommodate today’s consumers, who are used to an increasingly fast-paced, technologically driven world.

“There’s been a tremendous amount of innovation in our business,” Heithaus acknowledged. “Zillow, Trulia, Homes.com and others have done a great job of revolutionizing the searching experience. Yet when it comes to actually buying or selling property, the process needs improvement. We must do better.”

He said blockchain adoption could go a long way toward streamlining real estate transactions.

So, what is blockchain technology? If you search online, you’ll find a definition similar to this one from Harvard Business Review: “Blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.” Depending on where you search, the explanation can get much more complex from there.

Fortunately, according to Heithaus, the beauty of blockchain is that you don’t necessarily need to understand how it works in order to benefit from it. For example, he said consumers don’t know the inner workings of an automated teller machine, yet they still know how to grab cash from an ATM on the go quickly and easily.

“You don’t need a user manual, you don’t have to sit in a training class—you just go up and push the buttons and the darn things work,” Heithaus said of ATMs. He emphasized that the key to blockchain adoption in the real estate industry is to ensure that blockchain-based solutions are as transparent and straightforward as possible for the user.

Cheng-Shorland agreed, adding that ShelterZoom, a developer of blockchain-based solutions for real estate professionals, aims to ensure that users don’t worry about “what’s underneath the surface.”

“You just need to understand the benefits it can give you,” she said.


John Heithaus, Heithaus Properties LLC, and Chao Cheng-Shorland, ShelterZoom, discuss “How Blockchain May Change the Future of Real Estate” at RISMedia’s 2019 Real Estate CEO Exchange. (Credit: Korin Krossber of PlanOmatic)

As for those potential benefits, Cheng-Shorland said blockchain enables interconnectivity, speed, trust and security throughout the entire real estate transaction process.

“One of the first things I observed about the real estate industry,” Cheng-Shorland said, “was that it is truly fragmented.” She suggested that the buying and selling of homes can take months, in large part, because “there’s no interconnectivity between all the contracts, the forms, the people.”

According to Cheng-Shorland, blockchain technology could provide the necessary interconnectivity and interoperability, enabling real estate transactions to be done digitally and allowing documents and data, all in one place, to “talk to each other.” It could help eliminate paperwork, manage offers and negotiations, and ultimately save a significant amount of time.

“Blockchain is very much built around agents to help them streamline their operations, cut down huge costs and speed up their process,” she said. “Speed is your friend. If you have the speed, you’ll have more listings, you’ll get more sales done and you’ll get more commission checks.”

Cheng-Shorland pointed out that the iBuyer business model is growing popular among industry stakeholders and consumers due to its expediency, but she claimed “in order to really enhance that model, you need the blockchain because it enables that speed, which other traditional technology does not have.”

Cheng-Shorland said blockchain could also help real estate professionals build trust with clients and colleagues because “everything is self-governed” and the technology enables instant communication. Furthermore, she said blockchain is a secure transaction platform that allows users to hold onto their own data.

“Even we, as a service provider, don’t see any data going through your system,” she added.

Cheng-Shorland said the fragmentation issue across the whole real estate transaction process is the “immediate problem we’re trying to solve. It is a big task to tackle.”

For its part, ShelterZoom has developed a suite of blockchain-based solutions to help spur interconnectivity in the industry. Most recently, the tech company announced its Contract of Things (CoT), designed to “transform forms, documents and contracts into fully digital and interoperable assets.”

Because it’s relatively new—and rather complicated—blockchain may be confusing or seem intimidating. But during the CEO Exchange session, Heithaus reminded the 300-plus attendees about another once-mysterious tech innovation people were wary of: the internet.

Heithaus showed a slide displaying Coldwell Banker’s very first website. He explained that the site was launched back in 1998. With its bland colors and clunky layout, it looked like a technological relic in 2019.

Heithaus told the crowd, “Part of my job was to go around the country and convince all the directors we worked with that this internet thing was a good thing.

“They chased me out of there with pitchforks,” he quipped. “Now fast-forward almost 25 years later, imagine an agent, a team, a brokerage without a website.”

Will blockchain change the future of real estate? Only time will tell. Meanwhile, Heithaus urged anyone interested in blockchain to reach out to Cheng-Shorland and ShelterZoom for more in-depth information.

For CEO Exchange continuing coverage, visit RISMedia.com.

Joe Bebon is RISMedia’s associate editor. Email him your real estate news ideas at jbebon@rismedia.com.

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Real Estate Consumerism Is Changing—The Industry Must Respond

Sep 15, 2019 by

Real estate has historically been regarded as a complex and challenging industry for many consumers. In the past, people had no way or ability to buy or sell their house without professional assistance. There wasn’t necessarily a desire for those things either, but times are changing. Modern consumers are more educated and proficient in new technology, giving them leverage in any potential purchase and fostering a greater sense of independence than they previously enjoyed. Through due diligence and online research, homebuyers and sellers now take cues from industry-leading organizations, experts and experienced consumers to inform every purchase. A richer understanding of the industry and a greater sense of a home’s value now put consumers squarely in the driver’s seat.

Organizations and experienced real estate minds have taken notice. Some are now providing consumers with more options to fit their needs and give them the control they are seeking. When change occurs in a business market and old standards are replaced (often with the implementation of new technologies), the consumer is the winner. Real estate is the latest example.

Technology has radically reshaped virtually every industry. Until recently, this technological transformation largely missed the world of real estate. Only in the past five years have individuals and organizations begun to offer consumers more choices that satisfy their needs, speak to them in a way they now expect, and give them the control they’ve become accustomed to. Recognizing this wave of consumer-driven real estate, these new organizations are pioneering a different model that more closely addresses and adapts to the needs of their customers.

Real estate is changing quickly. It’s not to say iBuyers will completely replace agents and the traditional method—I’m not suggesting that this is a zero-sum game. In order to build upon the innovative solutions that benefit consumers, all parties may need to leave room for creative collaboration, or at least coexistence. The industry will likely get to a point where the roles of a traditional real estate agent and brokerage are different from what they have been—they’ve already begun to shift with evolving demands from homeowners and buyers.

In turn, whether consumers use these platforms or not, the existence of iBuyers improves the general consumer experience by requiring more from traditional real estate. Similar to what has happened in the automobile industry—where new tech-enabled companies entered with novel offerings to make car buying better for consumers—the traditional auto industry has responded, and dealers now offer more enticing benefits to consumers who continue to purchase with them. Those who work with these new companies benefit from a smoother experience that offers more flexibility and automation than traditionally available. Consumers who continue to buy the other way also benefit as the traditional industry improves and provides new solutions to keep pace.

A successful and healthy business industry is transparent and shaped by the consumer. If the consumer wants to sell and buy homes on their mobile device or computer, they need to have that option. But as with any evolution of industry, there are those who cling to the traditional mindset and dismiss the change. In real estate, some have attempted to disparage these new consumer avenues as a passing trend, but the evidence this movement has lasting implications is overwhelming. Proptech companies, real estate tech businesses, iBuyers will thrive because these models meet the new demands of a growing body of consumers. Perhaps the most convincing indications that this is a lasting change are the rapid growth of these new companies, rampant consumer adoption, and major business model shifts by prominent industry leaders.

We are in the beginning stages of this new movement and proptech companies are meeting the demand. According to industry analyst Mike DelPrete, iBuyers in 2018 accounted for 0.2 percent of all U.S. real estate transactions and 6 percent of the market in the biggest iBuyer locale, Phoenix. Objectively, it is a small fraction of marketshare, but this has been an option for less than five years. Companies are reaching new markets for the first time, and many people are just now being exposed to the terms “iBuyer” and “proptech.” As consumer awareness of this technology grows, it’ll be more widely adopted.

Real estate is evolving, and as a ubiquitous industry that plays a significant role in our economy and is directly involved in the lives of many American consumers, this tech-enabled niche—although often misrepresented—is garnering attention beyond its current footprint. This shift and the conflicting conversation around it could foreshadow the industry segment’s potential and perhaps future prominence in the real estate industry, as well as added value to consumers of traditional real estate along the way.

As chief marketing officer at Offerpad, Darrin Shamo is a key architect of the Offerpad brand, elevating the organization’s position as a high-touch company that delivers the best customer experience in the industry. Previous experience includes marketing leadership at DoorDash, Zappos (Amazon), and Coupang.

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