By Trevor Koot
Is it naive to think that organized real estate’s current approach to the collection and interpretation of data will ensure its relevance, and that of the Realtor, as the industry and technology continue to evolve?
Quite simply, yes, it is.
The amount of data that is currently collected by third-party members related to real property, real estate trends, individual buyers and sellers, prospective buyers and sellers, the real estate environment and general market is growing and substantial.
What is the MLS but a searchable database of property characteristics? Big Data, defined as: “extremely large data sets that may be analyzed computationally to reveal patterns, trends and associations, especially relating to human behaviour and interactions”, is being leveraged on many platforms, in many industries. It is reasonable to think that this data collection on such a large scale could create a platform that mirrors the MLS, without our data.
Not too long ago, the taxi industry was disrupted by Uber, an innovation that provided the same service by new drivers. The hotel industry was disrupted by AirBnB, the same service provided by your neighbour. Why did this work? Putting the opportunity to offer the same service as regulated industries into the hands of average (unregulated) people provided more options for the consumer, with friendly, customer-centric utilities. It’s what the consumer wanted.
As Uber’s impact on the taxi industry became evident, established players that had been providing passengers with a means of transportation for generations realized action was required to protect their industry. Rather than look to innovation to compete with the realities of a new offering, their reaction was to complain, hanging the proverbial hat on regulation and resorting to blockading traffic, further enraging the consumer.
We need to learn from this. The real estate industry’s response to current and future disruption must be more intentional, innovative and effective. Those who find themselves in a leadership position representing the real estate profession must refuse to subscribe to this type of reaction. Competing and innovating, rather than complaining, must be the collective reaction if we wish to remain relevant and respected.
Unregulated models that provide consumers with choice and immediate gratification are already entering our space; look no further than iBuyers, gaining traction in the U.S. market and recently entering the Canadian landscape. These changes are beginning to see buyers and sellers connecting and navigating all aspects of a transaction, without the need for a third party.
That said, the challenge for the near future is not that real estate will be transacted without the involvement of an individual to facilitate the sale. The question is, will that individual be a Realtor? If that is the challenge, and if all those involved in organized real estate, at all levels, wish for the Realtor to remain central to the majority of real estate transactions, it is time to give the consumer new reasons to choose a Realtor.
What will keep the consumer engaged with Realtors? What will elevate the Realtor brand? What is the role of organized real estate to ensure the future still holds value for Realtors?
Traditionally, real estate boards and associations have served the same functions and considered themselves as “member services organizations”. In order to compete moving forward and change the overall perception of the industry, internally and externally, boards, directors and staff need to change this thinking. No longer simply an administrator for the membership, the boards, individually and collectively, must create an environment for Realtor success. In a competitive and innovative environment, Realtors need strategies to remain relevant to the consumer.
If we rely on research conducted for the industry over the years, coupled with recent experience in the U.S. where competition is more varied, there are two obvious areas where we could focus. The first is the Realtor brand: especially its emphasis on ethics and integrity, as this is the key to developing trust. Any true profession is characterized by standards and ethics that are enforced; unique expertise and a commitment to service.
The second is information, and while efforts are being made to replicate what we have, no single entity yet has the same accurate, up-to-date and credible data that we have in the MLS. How can we leverage the data we already have? Should our data collection efforts be more robust?
It has been proven time and again that the average consumer is becoming more savvy. They have greater access to information and leverage that access by becoming informed prior to any transaction. Is there a solution that allows the consumer to have access to more information currently retained by the industry, while elevating the value the Realtor contributes to the overall experience?
Innovation and creativity must remain the focus of anyone in a leadership position who can influence the mandate of organized real estate across the country. The industry must remain nimble, be willing to take risks and accept that there will be some failures along the way. It begins with a frame of mind.
As an industry, what is our next move?