Imminent Death of the Real Estate Agent!

Hi everyone, I am Bill, CEO of Propsage, Panoroo, Smart Virtual Office and several other disruptive technology companies. I would like to share with all of you what we see is coming and what are we are building in anticipation of what is coming.

But first, why am I qualified to speak about this topic! 

Way back in 2006 before the word disruptive technology was invented, I started my first Disruptive company in the Virtual Office Space, which allowed people to get a virtual Office for under $100.00 for a whole year. That was unheard of and people thought we were crazy and believed we would close down the company in under 4 months and run away with all my clients money. As the story goes, today that company today is the largest in Singapore and expanding regionally. It wiped out several small and mid size players and more importantly it really helped me understand what I finally did right and I started studying other such companies and looked at industries which I could repeat the same. I went on to build several companies in different fields including

1. Fintech (moolahsense.com)
2. Telecommunications ( webdials.com )
3. Real Estate ( Propsage.com )

So why should you care?

The Real Estate Business is and has been run the same way for nearly 150 years. The way business is done in the Real Estate Sector is ripe for disruption. The price of the property is high, and commission also high. It uses incumbent solutions that has many people sticking their thumbs in the pie from the MLS provider to the association to the agency. The millenniels are digital natives that will use technology that helps them make decisions better over the existing ones. If the agents thinks that this cannot be disrupted because of regulation and licensing just look at how Uber, Air BNB, Budget Airlines, FedEx, Tesla, Watson and many other disruptive companies replaced all their incumbents.

I hope I have got your attention. Here is a little history. In 2010, my team stumbled on the Real Estate Sector by chance. We were suppose to do a website for an agent, me and my team wanted to meet him for project kick off and scope out the work. At that time, Singapore was just getting regulated and through out the meeting, he was cursing and swearing about the regulatory body. We took his grouses and turned it into Propsage!

We love Real Estate as it is an industry that impacts everyone, and I mean everyone. From the tycoons to the undergrad still buried in debt. We all need a roof over our heads. We rent, or buy the properties to do that! So lets breakdown the job of the real estate agent

1. They take photos of the property, put them up for sale or rent, in some countries add a yard or window sign. They also put the property up in an MLS so other agents can see it.
2. When viewing comes, they usher the potential buyers around the house, explaining the benefits of the place to the prospective buyers. 
3. When someone finally is really interested, they help to negotiate the price of the property and eventually either the seller budges and lowers his price or the buyer relents and pays more than he is willing. 
4. They help to sign off paperwork and the deal is taken to the lawyer office if it is a sale or back to the agency if it is a rental.

I deliberately skipped the details on farming, fishing , swinging. These are terms in the industry on how they spin the clients around and get them to commit or view other properties. Then there is the negotiation, using different baiting and switching or horse trading etc. In my opinion, these are practices that make people upset with the experience of using an agent. Here is the real kicker of the whole equation, what is the value add of the agent in the equation. Is he a lubricant making it easier for the owner or friction. Lets look in detail which part of this process needs an agent?

1. Owner can take photos themselves
2. Owner can put up their own sign
3. Owner can put up listing in public domain
4. Owner can draw up their own contracts from templates
5. Owner can explain the benefits themselves
6. Owner can negotiate the price themselves directly with the prospect, giving further discounts as they no longer need to pay a hefty commission.

So the agents today require a licence to operate. The Owner does not need a license to sell his own house. Technology already allows remote door opening like August lock and a robot to usher the prospective buyer controlled by someone 1/2 way around the world. What then? Will these need to be licensed. The “Agents” will not be in your country and it will be impossible to regulate these people! Unlike Uber, this will be conducted entirely over the internet. What happens to the agent’s job! It will be slowly eradicated.

So on one hand the local agents provide little value in the industry, and there will be competition coming from external sources unrelated from the current industry who can do the same job perhaps even better and the owner can DIY it himself and the cost to get an agent could be used to make the property more competitive. So what is the VALUE that the agent bring to the table ? Based on the current work required, very little. 

However if they are willing to upgrade and start doing different things then they will be kept relevant like

1. Keeping a base of potential leads and keeping a look out for these leads their interest and their wants
2. Taking better photos like 360 virtual tours
3. Signing Digitally so they can attract out of town buyers
4. Using Social Media for marketing to reach a bigger audience
5. Use technology to uncover hidden opportunity for the owners

With technology, the middle man gets cut out of the business because they add a layer of friction to the business. It is the aim of our companies to reduce if not eliminate the friction for business to happen. Learn new skills from panoroo.com or propsage.com or talk to me to find out how you the Agent can become the lubricant of the industry instead of the friction!