- 23 May, 2008 22:00
Real estate agents have embraced technology in all but perhaps the most important area - the business model. Agents were among the first in business to realise the power of mobile phones and were enthusiastic adopters.
And the internet has had a big impact on the way agents market real estate. Forty per cent of sales inquiries come from the internet, 27 per cent come from print media and referrals account for 13 per cent, a 2007 report by Macquarie Relationship Banking on agencies found. Walk-by inquiries - people passing a shopfront - were responsible for only 9 per cent of sales inquiries.
Smaller agencies were more likely to rely on the internet to bring in inquiries, the survey also found. "There is an increasing opportunity here for real estate businesses to embrace e-commerce technologies throughout their business, not just as a sales tool but also to minimise cost," it says.
However, there is anecdotal evidence that, when it comes to applying technology to business models, agents are Luddites. And it is not for a want of technology - the systems are already available to allow real estate agents to operate without an office.
Instead, the humans in the process are slowing things down - agents are inclined to cling to a desk in an office with a shopfront on a retail strip.
Mobile broadband and web-delivered back-office systems make it possible for real estate agents to call coffee shops and clients' houses their office as they upload new listings to popular property marketing websites, change databases and finalise contracts - all from the road.
Simon Baker, chief executive of the REA Group - owner of the realestate.com.au website - believes agents' uptake of mobile technology, allowing them to work without an office, will be slow.
"Will web-based office management systems mean agents can be more efficient? Yes," Baker says. "Will [agents] access that technology on the road? My guess is some will, but the majority won't. Why? Real estate agents are great at sales but some aren't technology literate.
"The theory is great. It will be a while before it is taken up. Over time they may progress but that is more generational change. It won't happen overnight. Can it affect the models for agency? In theory, I think it could."
Baker's views are echoed by the deputy chairman of the Ray White Group, Sam White. "One of the biggest challenges we have in this industry is getting our people to [interact] with emails," he says. "There's still a culture where [email] is not treated as seriously as a phone call."
Baker estimates only a small number of real estate agents use REA's internet-based management tools remotely, although he says this is probably due to wireless broadband having slower speeds than landlines.
Agents are not the only ones who are slow to embrace wireless technology. Buyers, too, have shunned remote access. REA offers a wireless version of its realestate.com.au website, but it attracts only about 2000 unique visitors a month compared with 4 million visitors on landline internet. "The point is, it's there - but it's not in major demand," Baker says.
However, there is a push by agency franchisors and others in the industry to enable real estate agents to operate remotely when they're good and ready.
Colliers International, through its PRDnationwide business, retained consultants two years ago to begin moving its franchisee systems online. It began rolling out its Agency One platform seven months ago and it is now in 40 per cent of PRD franchise offices. Agency One integrates websites and other sources of data and uses real-time data to give clients a picture of an area's demographics and property sales history.
Fairfax Media - owner of BRW and real estate listings site domain.com.au - is offering real estate agents web-based tools. It has taken a stake in Commerce Australia, a West Australian company that offers the MyDesktop client-relationship management system as well as online research services through the Australian Property Monitors business.
REA has a web-based management system, Hub On-line, which tracks sales and helps control information including property listings. "The future is going to be web-based," Baker says.
Colliers Residential managing director Grant Dearlove agrees. "Any source of information or knowledge on a transaction is now virtual and online," he says. "The speed of the knowledge, the amount of the knowledge, is all [accelerating] because of technology. Any franchisor who is not focused on an IT strategy for their franchisees is living in the dark ages."
Dearlove says his biggest fear in introducing web-enabled systems is that the older generation of agents will be overtaken by younger agents.
White agrees: "Technology is not going to replace agents, but real estate agents with technology will replace real estate agents who don't have it."
Dearlove stops short of saying that technology will force change in the business model for real estate agencies and that the days of conventional shopfront agencies are numbered. "It [technology] is an instrument to augment the existing business model," he says.
"A good agent these days will not be half as successful unless they have the technology. We'll go to an age where all agents will have either a BlackBerry or a laptop and do all of their presentations on that," he says.
A spokesman for domain.com.au, Michael McNamara, is more direct about the days of the shop-front real estate agents' office being numbered. "The requirement for real estate agents to be on the main street with a big shop window will become less and less," McNamara says. "The natural progression there is if a real estate agent doesn't need a shopfront, as they once did, perhaps they don't need an office, as they once did.
"While we're not seeing any wide movement in these markets, it's entirely possible. More and more real estate agents are working from home."
The franchisor of the "virtual" agency business Only One Realty, Don Edwards, is more aggressive in his outlook for remote agency operations. He believes 75 per cent of real estate agents will be working remotely, without an office, within five years.
Fairfax Business Media