Trying to reinvent how real estate gets done
Continuing the conversation… talking about the battle raging between old-school, relationship-based real estate and new web-based platforms that are highly transactional by nature and busy trying to “reinvent how real estate gets done”.
The clash between the transactional and the relational is an old-story in real estate, reflected in the stereotypes about used-car salesmen that contrast mightily with other accounts about trusted advisors guiding people through the biggest decisions of their lives. Our culture is uncomfortable with being “sold” but it has no problem when it comes to “shopping” and the ongoing app-ification of real estate is bringing all of that to a head.
As we speak,there are 90+ software companies in the Bay Area working on digital tools designed to disrupt parts of the home buying process. Why so many? Because real estate is a huge target! Homes are big-ticket items and you don’t have to monetize much of the pie to earn a profitable IPO.
Amazon changed life by offering faster and simpler ways to shop from home and Jeff Bezos is now the richest man in the world leaving local bookstores and small town retailers as casualties. People can get anything they want faster these days, but that really doesn’t improve quality of life.
Now Zillow and Redfin are trying to become the Amazon of real estate even as Amazon has recently joined forces with Reology (Coldwell Banker, C21 & Sotheby Brands.) Buying a home isn’t an everyday thing, it’s more of a few-times-in-life experience. Is the world ready for one-stop home shopping?
There used to be an old saying: “Don’t fix it, if it ain’t broke”. But digital disruption is predicated on fixing everything, whether it is broken or not. That means starting with the false premise that the old method of buying or selling homes doesn’t work. It isn’t fast enough or efficient enough. There are too many difficult questions and unknowns.
Thus, real estate should be overhauled or “reinvented.” Which is code for being “re-engineered” by algorithms to translate everything into efficient digital increments that add up to easy transactions. Log on. See house. Point and click. No questions. No unknowns. The narrative for all this calculus is smoothly delivered in Zillow’s tech-speak describing it’s latest venture:
“Zillow allows customers to request an instant offer and sell directly to Zillow. They’re able to eliminate the time and resources required to prepare and list a home, including showings and minimizing in-person interaction. The service also provides certainty about price and the convenience of selecting a closing date.”
But before you point and click, don’t you just have to ask: What’s wrong with this picture? More next week.