Everyone has an opinion about ‘the problem with real estate’; and while everyone is entitled to an opinion, it’s probably more important to have facts. Fact. So that is what this is about. We want to simply playback 6 quick snippets of data that can help everyone understand ‘the problem’: which is the problem we are seeking to address for the industry primarily through our digital platform, RITA.
So here we go, in no particular order:
68% of buyers said that agents had ‘little or no interest in helping them’
CoreLogic, ‘Buyer Perception of Real Estate Agents’, November 2016
48% of buyer enquiry was not answered
REA Group Pty Ltd & S. Carroll, ‘Dominating Real Estate in a Digital World’, [web blog], 7 June 2018
80% of property owners in real estate CRMs have not had a human engagement for more than 150 days
AIRE Internal data, 2018-2019.
99. The number of properties under management per full time employee (2012). The number was 101 in 2017.
Macquarie Relationship Banking: Residential Real Estate Benchmarking Reports 2012, 2017.
$1,150 is the median weekly pay of a real estate agent with an average work week of 43.6 hours
Australian Government, ‘Real Estate Sales Agents ANZSCO ID 6121’, 2019
35% of agents had sought medical advice once or more for work-related stress
Revive 2017 White Paper: Wellness and Wellbeing in the Real Estate Industry, 2017.
WHAT DOES IT ALL MEAN?
If I had to summarise what this all means, it comes down to four main things:
- We have more ‘technology’ at more expense than ever;
- Productivity has remained static;
- Customers are not enjoying their experience; and
- Agent’s are breaking.
These issues exist in both large and small business that we work with and analyse. The issues exist in businesses, regardless of their technology stack. They exist in regional and metro areas and across all brands. The strain is palpable and something has to give.
In the way that humans do, we look at this landscape and crave simplicity and the easy option has been to put blame on the agents, and tell them it’s a motivational issue. We blame agents when we tell them that these bleak and complex factors are the result of their lack of motivation: yet most agents are working to capacity.
All of this led us to conclude that the real estate industry has a resourcing problem: Real estate agents are the providers of the service so their TIME is the product…and there is not enough TIME to do all of the things that agents need to do in a day – admin, marketing, prospecting, vendor management, buyer servicing.
So agents do what any human would do when they don’t have enough time – they prioritise. No agent would EVER prioritise an unqualified prospecting call over their presence at an auction, for example. Likewise, you would never miss an appraisal appointment for an unqualified buyer appointment. Prioritisation takes a lot of mental labour to do, so that is another strain on agents, but the ultimate upshot of prioritisation is that some work, and sometimes a lot of work, doesn’t get done.
Here is the extra piece of complexity – this problem is occurring in the real world where bills need to be paid and in an economy where the costs of doing business are escalating, and the revenue from transactions is diminishing. Great.
WHAT DO WE DO?
The answer is a low-cost, scalable workforce, capable of completing work outcomes for the de-prioritised work of agents and agencies. Where do we get one of those?
It was 762 BCE and Ancient Greece where Homer wrote ‘The Iliad’ and the world had its first ever conception of ‘Robots’. See in Homer’s time, the human resources were prioritised for both farming and war. Before a battle, the soldiers were taken away from farming to use their labour for the production of weapons to use in the battle, which is pretty hard work without modern tools. So soldiers turned up to war a bit undernourished (not enough food no farming,) and exhausted from the labour-intensive weapon manufacturing process. Homer imagined a legion of metal statues that could make the weapons so soldiers could focus on their most important work – winning the war and getting back to the farms.
Fast forward to the 21st century: Data, automation and artificial intelligence has the ability to do that for knowledge workers, like real estate agents. The ability to a lot of the digital paper shuffling, information processing and button clicking that takes up a real estate agent’s time. Agent’s are then free to be available more at the customer interface – which is where customers want them to be and is the most productive use of their time.
The change we need is to put agents up front and to put service first. I can’t think of HOW we can actually achieve that without cleaning up and integrating the information and technology in a real estate business to the end of doing work FOR agents.