It was inevitable that the estate agent versus property technology disruption debate would come to the fore as a result of the Covid-19 lockdown. The topic was recently explored during a “Let’s Talk Property” webinar hosted by Real Estate Investor and eLan Property Group.
Panellists included Samuel Seeff, chairman, Seeff Property Group, along with other executive heads of traditional and online estate agencies and a property portal. The panel largely agreed that, while proptech advancement has accelerated during the lockdown, there have been no dramatic changes in the industry nor is there much disruption on the immediate horizon.
If ever there was a time for proptech to take centre stage, it was during the lockdown. Yet, says Seeff, despite the significant use of technology and advances, it was only really when agents were permitted to assist purchasers with physical viewing and negotiation to conclude deals that the market started moving again.
It’s not just in SA, but across major markets including the USA, where it’s now clear that, while technology is enabling estate agents to provide a more professional service, it will not replace agents any time soon.
Buyers still wary
Despite expectations that estate agents, in particular, would be disrupted, Seeff says that it’s interesting that of all industries, property has been particularly resilient in terms of disruption. The reality seems to be that people are just not comfortable with their biggest asset being traded purely online.
“Selling and buying a home is the single most significant financial transaction that most people will ever make. It’s not like buying a pair of shoes or even a couch online. The costs and consequences are significant. Given the financial and legal complexity, sellers and buyers need the assistance of a professional intermediary, preferably a trusted local operator with a track record in the area,” he says.
“The disruption that we’ve seen has been in terms of the professionalisation of the industry through the new qualifications framework together with proptech, which enables agents to offer a faster and more professional service to sellers and buyers.”
Good agents still needed
Important aspects of the transaction between seller and buyer, however, still require a trusted agent who can guide the seller and buyer through the process and provide guidance on financing options, pricing, and the market.
“The critical outcome and objective of any real estate transaction is negotiating and facilitating an equitable win-win outcome for both seller and purchaser and this is the critical role that an estate agent plays,” Seeff says.
Sellers and buyers also still largely make use of recommendations. As one panellist mentioned, in the USA, statistics show that 90% of real estate business comes from referrals and repeat business. This, says Seeff, is largely due to the human interaction and experience.
Agents who have not yet adapted to new technology may be finding it disruptive, but Seeff says that most are embracing and adopting technology.
Generally, what has been punted as disruption by newcomers has added nothing new to the industry in terms of technology or systems, but was already being offered by traditional agents with great success. Property portals for example, disrupted the print advertising industry, not estate agents.
Real disruption will only come once the entire real estate chain is automated, from the banks to the municipalities, signing of documentation and the deeds offices. It was cited that, in the USA, for example, the transfer of a property can now be registered within seven days.
“Big data” may also mix things up in future. Real time data, analytics, and trends to enable agents to better advise clients and predict how the market may move, can only flow from full digitalisation of real estate transactions.
Currently, data is about six months old, and possibly older now with the deeds’ office delays. Seeff says that making informed predictions requires more accurate information.