Evolution of the real estate agent

They’ve been around for more than 100 years, but there’s no denying that the role of the real estate agent has had to adapt over that time.

In this article we’ll take a look at what’s changed.

The 21st century has seen rapid change in many professional fields, and the real estate agent is one of many to watch his role modify and mutate.

Noise about “disintermediation”, basically the cutting out the middle man, has been getting louder, with many fearing a serious threat of disruption, particularly from ever-advancing technology.

Topping the list of concerns are the availability of free data to both buyers and sellers, automation of services and a general reduction in the perceived value agents can offer consumers.

There’s also a school of thought that the proliferation of higher density living could, potentially, lead to developers deciding to take on more of their own real estate duties in-house.

The world Economic Forum’s recent report The Future of Jobs states that the employment outlook for sales and marketing professionals, under which heading it includes real estate sales agents, is a 3.2 percent decline, with the predicted east of recruitment expected to become “harder” by 2020.

PwC’s economics and policy consulting team also conducted a study, which determined that 822% of real estate industry jobs are at risk of digital disruption by 2035.

It’s not the most encouraging of news, but many in the industry remain undaunted.

Real Estate Institute of Western Australia CEO Neville Pozzi believes an agent’s role is as important now as ever. 

“The unique aspect they bring to the home buying or selling is objectivity” he says.“They can offer advice to a buyer or seller based on their market knowledge and experience, rather than emotion”.

While he acknowledges that both buyers and sellers have access to more information than ever before, he says agents are still best placed to provide a service based on the best interests of the client.

Over in the US, real estate advisor Dusty Baker takes positive results from the National Association of Realtors’ 2015 Profile of Home buyers and Sellers, saying that ‘the overwhelming consensus of the data showed that the old boring business is still alive and well in the real estate world’.

Indeed, the profile revealed that clients still value such traits as honesty and integrity and negotiation skills far higher than an agent’s skill with technology.

The CEO of Starr Partners, Douglas Driscoll, on the other hand, believes dis intermediation poses a real threat.

“Those that dismiss it are either being very naïve or very arrogant” he says. 

“I certainly see the burgeoning underbelly of our industry becoming redundant in the next 5 to 10 years as a result, as they’re the most vulnerable to digital disruption. In order to survive and thrive, agents will need to go over and above the call of duty and demonstrate exceptional customer service.

The intrinsic role of an estate agent hasn’t really changed much over the course of my career – in that they still essentially list and sell property – but what has changed is the way they perform their role”.

“The rapid evolution and widespread adoption of new digital platforms has dramatically changed the way property’s marketed and the prevalence of smart phones and tablets means consumers now demand bigger, better, faster, more efficient and visually exciting ways of accessing information”.

“I think a lot of agents have lost the ability to actually sell a home.”

He adds. “Our industry has arguably had it too good for too long, which has led to some agents becoming complacent and treating potential buyers with contempt”.

“Agents are going to have to get back to basics. Rather than just listing a property on the internet and sitting back, waiting for the phone to ring, they’re being forced to adopt a more proactive approach.”

WHATS CHANGED?

Somebody perfectly placed to chart movement within the industry is Trevor Matthews, patriarch of the family agency Matthews real estate since the days when his home city was known simply as “the town of Brisbane” on property contracts.

When it comes to modern technology and the availability of data, Trevor admits they’ve had an impact, but he doesn’t believe it’s necessarily an adverse one.

“They know more and if you’re selling them similar sorts of things, then maybe they trust you a bit more”, he says. “I don’t think it’s a bad thing that they know more”.

“Bringing two people together (the buyer and the seller) is the agent’s job… and the negotiation of it all”.

He believes people would lose a lot were his role to completely disappear.

“They mightn’t have enough information. We’re doing it every day, so we know what the value of these places are, we can pass that on.”

Being an agent in the more traditional sense, Trevor’s skills don’t stop at simply selling houses and negotiating sales – he’s a qualified valuer and auctioneer, while he agency also handles body corporates, quite a rarity in the modern real estate office.

Trevor’s the third generation of his family to take over the helm at Matthews, and his daughters Kerry and Michelle, along with son Russell, ensure the business is safe in the hands of the fourth generation.

Over the course of a more-than-50-year career, Trevor has witnessed firsthand the evolution of the role, recalling the days when his father sold not only properties but also sometimes the tractors and cattle that lived on them!

“Our real estate was a one-stop shop for many years”, Kerry explains “and did everything… (we) still are trying to do everything!”

In an auspicious change, Trevor notes that he’s ‘no longer a taxi service’.

“That’s what it used to be. The people would come here, you’d put them in the car, and you’d drive them for hours around, showing them places”’ he says.

“Thank goodness that changed!”.    

“We used to do it with the rentals too”, he adds.

Kerry recalls visits to properties as a child for cash collection purposes.

“Dad used to collect rents. I remember sitting in the car as a kid and waiting while he ran into someone’s house and knocked on the door and actually took cash from them.”

The move to bank transfers and direct was a welcome one, they both agree, speeding things up and lessening the risks of staff members having to transport large amounts of cash.

“People would know that people were handing over hundreds of dollars – that was a bit of a safety risk for a while”’ Kerry recalls. “You had to have procedures in place.”

MAKING A LISTING

One of the most significant changes has occurred in the advertising of properties.

Like many agencies, the Matthews office still displays listings in the shop window – a method Trevor feels is highly effective to this day – and unlikely to disappear but the days of classified ads in the papers being the only media distribution are long gone.

“We used to do it in The Courier Mail, that was the only place you advertised” Trevor says.

“We run the odd one (now), but mostly businesses… and the auctions, we’ll run those if it’s a suitable one.”

The primary portal for listings now, of course, is the worldwide web, with realestate.com.au and domain.com.au the prime sites.

However, before the days of the internet, there was the multiple listings service. 

“It was like the internet before the internet” Kerry says.

“If you had a listing, you didn’t just keep it to yourself, you shared it with the other agents, but you had to share some of the commission, too, it became a conjunctional arrangement.

It was only shared between (REIQ) members, but it could be advertised at other agencies.”

The process encouraged conjunctional sales, which Trevor has watched fall in popularity over the years.

“There’s not a lot of conjunction goes on at the moment,” he says. “I think it’s because you can probably sell the place yourself… when times are good (and you’d say they’re good now).”

Kerry explains that since the introduction of their customer relationship management software (CRM), each new listing now shoots out to at least 10 websites at a time.

“Whereas in the past we might have been manually typing in details about a property into the back of realestate.com, now we’re doing 10 or 12 websites automatically, with one database”.

Many of the sites feed off each other, she says, and contrasting with the advertising of old, often post the listings for free.

Agencies own websites have also had to move with the times.

Not only is it wise for agents to have listings on a well-designed site with an appropriate (i.e. easy to Google) URL address, but mobile applications need considering, too, as well as content in the form of blogs and articles, for all those armchair surfers to browse of an evening. 

Social media’s an intrinsic part of the Matthews technological offerings, too, and for Kerry their Facebook page is all about bringing the company’s strong community focus into the digital age.

“Dad’s a Lions club member and has always had a very good presence in the area”. She says.

“The modern version of that is Facebook and other social media sites, so we’ve adopted a Facebook page where we talk about the things we do in the community.

“It’s just a way for us to say “hey, we’re here and we know what’s going on in Annerley”.

“Our site is purely social,” Kerry adds, meaning that property listings do not appear.

“I’ve done it once in three years. That’s not what social media to me is necessarily about”.

FORESIGHT’S A WONDERFUL THING  

A crucial element of the modern agent’s sales spiel is pointing out a property’s potential.

Particularly in the inner areas, Trevor says, they constantly have to be thinking “what can we do with that?”.

“We need to tell people when we go there, look, you’ve got a big piece of land here. The backyard might be suitable for townhouses.”

This experienced agent has also seen the impact of population growth, with areas that were once virtually impossible to encourage people to examine now constituting seriously desirable suburbs.

Finance, too, has changed beyond recognition for Trevor.

Not only has he seen deposits fall from 30% to current requirements of as little as 5 to 10% (they’re virtually shovelling it out the door!), he also remembers the occasional owner finance situation whereby buyers unable to secure finance from a professional lender (bank or building society) could come to an arrangement with the owner of the property, who thus becomes the financier.

“You really don’t see that today, but I did sell quite a few like that”, he says.

Even the little details have changed.

Gone are the days of an agent walking through a property with his trundle wheel – Kerry points out that now a laser is used for measuring, though Trevor’s not so sure.

“Everybody else uses a laser,” he says. “I still use a tape.”

The implementation of technology in an agent’s daily duties has been of huge benefit, according to Pozzi.

“(It’s) probably had the greatest impact on the role of a real estate agent,” he says.

“The role is much more efficient than it used to be. Many processes are now automated and accessing property market information is quicker and easier”.

He agrees with Trevor, however that there are many things about the job that haven’t changed, including the process of negotiation, the use of open homes and the settlement process.

Some of the system changes Pozzi cites for WA include the requirement by REIWA for members to have professional indemnity insurance in order to practice, and the fact that agents now have to perform an identification check on the seller of a property. 

“It’s also worth noting the introduction of foreign investment guidelines”, he says.

“The internet has increased access to foreign buyers, which has seen the requirement for guidelines around how foreign investors can participate in the local market.”

For Driscoll, technology could indeed be the undoing of the real estate agent.

“I believe that agents are definitely becoming more peripheral to the sales process and certainly don’t hold the cards the way they once did,” he says.

“I believe our over-reliance on the web portals has become tantamount to Dr Frankenstein creating his monster.”

Nevertheless, Driscoll also thinks there’s a solution.

“Estate agents now need to consider fusing the physical world with the digital world. Although there’s a plethora of emerging innovations, one technology that I see having a big impact is augmented reality.”

“Augmented reality blurs the lines between what’s real and what’s digitally generated. In layman’s terms, (it’s) a digital layer over the real world that you can’t see with the naked eye, but you can see with the camera on your smartphone or your tablet.”

“Augmented reality may seem like a futuristic concept, but it’s already starting to become an actuality of our digital lives and will start to become more prevalent in the marketing of property.”

Editor’s Note: This article has been republished for the benefit of our new readers. It was originally written by Angela Young and published in Australian Property Investor Magazine and has been republished with their permission.