Posted on Jan 29, 2017
The last decade has seen major disruption across many industries. Industries that in the main carried on doing what they had been doing for years, but new technology, or new thinking, forced change.
Taxis and bookselling are just two examples. Uber, Lyft and others have caused major disruption to the way the taxi industry works worldwide. And many would say it is about time. Kindle and Kobo have accelerated a trend away from physical books, and when combined with Amazon and Book Depository have decimated the bookselling industry.
We can see the beginnings of similar disruption in the banking industry, with electronic funds transfer the figurative tip of the iceberg which will ultimately seriously trouble the legacy banks. And interestingly many of the most useful initiatives are occurring first in third world countries. There are changes afoot also in education with the likes of Khan Academy and University of Phoenix demonstrating alternative paths. Although these may not ultimately be reflective of the future of education, they are indicative of the fact that there can be alternatives to the centuries old model of teacher in a classroom in front of students.
Medicine also has major changes underway. The high cost traditional drug based model marginalizes health care for many worldwide. How medicine of the future looks is still being shaped. But what is certain is that the high costs of delivery currently, and the opportunity presented by the myriad of new technologies, will shape the way healthcare is delivered in the future.
So where does that leave the future of the way that real estate is traded? Real estate (in New Zealand at least) has traded much the same way for some time. Agents place themselves between vendors and purchasers and (sometimes) add value by introductions, knowledge and negotiation skills. But could this be due for disruption? Is there an opportunity for a thinker with imagination to propose a revolution for this process?
There have been many who have touted new models – mainly in residential. But those new models are primarily just variations on the old. Owners hammering in their own signs, or agents selling with a lower commission don’t really count as disruptions. They are merely tinkering with the current model.
There is an old adage in advertising that 50% of everything we spend on advertising is wasted. But which 50%?
There must be some parallel percentages with regard to agent’s time. Say 50% is wasted by tire kickers, owners wanting free valuations, dreamers and others. But how do you identify which 50%?
If agents had a tool which could quickly eliminate the time wasters so they could focus on the true opportunities, would that mean they could be more efficient?
Currently the best tool available is qualification, which of course is dramatically under-used.
Similarly, could a tool which effectively targeted actual potential buyers or tenants more effectively use agents time than the scattergun approach?
Perhaps eliminating agents by creating effective tools for vendors to deal direct with purchasers is the answer? It’s unlikely in the current environment.
But I am certain that change will come. The current model is inefficient and immensely frustrating for many vendors and purchasers.
What is uncertain is the shape and nature of the changes.
But we will certainly welcome the opportunity to introduce increased efficiency to the industry – however that may come