The Digital Disruption of Real Estate

Digital disruption. It’s all the rage at the moment, profoundly affecting the way industries from accommodation to public transport function. The ‘sharing economy’ has opened up possibilities for the community to use and make money from their unleveraged assets – think cars in the case of Uber, or spare rooms in the case of Airbnb. As a public, we’re increasingly happy to exchange the safety of tried and true regulation for the convenience and additional income of the ‘share economy’ – where trust is built on user reviews rather than governmental legislation. 

There are some rumblings that a digital disruption is on the cards for the real estate industry, too. I have some doubts about that – as today’s real estate ‘disruptors’ are in truth just new-fangled versions of ‘for sale by vendor’ organisations – which have never grown enough in popularity to influence the wider Australian real estate industry. These new ‘disruptors’ come in the form of brands like Purple Bricks and Agent in Box, which are effectively fixed-price, vendor-DIY jobbies. Let me speak frankly: these organisations appeal to individuals who believe there is no skill in an estate agent’s marketing approach, market knowledge and negotiating capacity, and that their property will garner the same result no matter who transacts it.

This is – of course – incorrect. As vendor advocates, Infolio scour the market to source the most suitable sales agents to act on our client’s behalf. No two agents are ever the same in skill, influence, knowledge or negotiating capacity. A talented, focused agent works with a vendor to guide them through the often fraught emotional process of selling – developing a strategy that attracts the right buyers in the right way. Often counter-intuitive, the skills of an outstanding estate agent can simply never be replaced by a ‘DIY’ sell-your-own real estate service. Long days on market and poor sales results await vendors who believe that agent talent has no impact on their final sales price – which is a high price to pay for vanity and the perceived saving of a few thousand dollars.

Another ‘disruptor’ which has begun to take up more time on daytime television are agent referral websites like Local Agent Finder, which allow you to ‘compare agents in your area, including their fees’. Sounds like a good deal, right? Wrong. Although they present themselves as a free service, they’re actually data-farming for the purpose of speculative invoicing. Local Agent Finder presents consumers with an array of agents local to the area of their enquiry. Should you contact these agents through Local Agent Finder, the agent pays a portion of their eventual fee to the website – making the service far from free. And when you consider that agents who agree to participate in the Local Agent Finder project are generally chosen for being the cheapest on fee, you’d have to wonder about the quality of their skills and just how focused they’d be on developing an exceptional marketing and negotiation strategy for their clients. Additionally, sites like Local Agent Finder offer no review or ratings system – so you may be offered a choice of agents, but not the means to choose one with clarity based on their skills and achievements.

Today’s so-called real estate digital disruptors aren’t truly breaking the mold. There has always been a limited market for DIY real estate transactions. Agent referral websites aren’t offering consumers the knowledge to make an educated decision on the selection of an agent – they’re merely hoping you’ll choose an agent they’re associated with, allowing them to invoice for a percentage of your eventual sales fee. No ‘disruptor’ can replicate the expertise and hard-won strategy of an exceptional estate agent – nor the value of a vendor advocate with the smarts to appoint an agent based on their ability and local expertise (not merely the cheapness of their fee).