Jointly written by: Jeff King (CEO, Real Estate Board of Greater Vancouver) and Trevor Koot (CEO, British Columbia Real Estate Association)
There have been many times throughout history when innovation has led the consumer. When Henry Ford envisioned an assembly line producing vast quantities of Model Ts, he did so on the premise that the consumer didn’t yet know what they wanted or needed. Before Apple put an iPhone in everyone’s pocket, nobody was missing smartphone technology.
However, in other instances – including innovation within the real estate technology space – the consumer has been and remains undefeated. And if the real estate industry doesn’t take notice, consumers may begin to turn elsewhere.
Since the first iteration of the internet, business has been maneuvering to satisfy the consumer’s desire to have more control and remove intermediaries. What started with businesses getting increased access to suppliers quickly turned into consumers receiving the same access.
No more intermediaries
This began when service-oriented businesses like airlines, car rentals, hotels, investments and entertainment started cutting out the servicing agent. Entire industries have been disrupted by this changing consumer interaction, including the travel sector, stockbrokers, cable companies, studios (music and audio-visual), banks and insurance brokers.
The next transition was from service to product. With Shopify, Amazon and even Facebook Marketplace, consumers access products without retail agents.
To be clear, this is not a doomsday “the sky is falling, and disruption in the real estate industry is going to cause catastrophic change” kind of article (though it’s probably widely agreed that change is inevitable). Instead, this is intended to inspire leadership in the industry (and all stakeholders) to consider the consumer when making decisions.
Consider the consumer
Two things drive today’s consumers: data and transparency. As much as we all continue to want our privacy protected, this is a balancing act for business leaders, legislators and the consumer because we also want technology to make things easier and more accessible.
In the music industry in the early 2000s, this change was sudden and profound. Consumers wanted digital access and the portability to take their music anywhere. Until this point, these ideas were unheard of. Even if the technology could accommodate these wants, the licensing and business models were not there yet.
So, platforms like Napster, Limewire, Kazaa and BitTorrent stepped in and gave consumers access to music (and, once broadband became more common, TV shows and movies) on demand. Instead of waiting to catch a rerun of The Office, you could just watch it whenever you pleased. Binge-watching was a new phenomenon that the consumer didn’t know they wanted.
Resisting this push from the consumer, intermediaries such as some record labels and publishers continued to fight access to downloads. Instead, they steered consumers to buying entire albums when they only wanted one or two songs. New direct-to-consumer models led by progressive licensing bodies and sizeable tech firms such as Spotify, Apple and Google started driving music consumption based on consumer desire. Record stores, movie rental shops, radio stations and traditional TV were slow to react. As a result, they have had to play catch-up in an industry they previously led.
Open, exploratory response to consumer demands
The similarity in real estate is not difficult to see. Consumers are armed with far more data than ever before, and they are demanding more and more transparency. The response by the real estate industry must be one of openness and exploration, not protectionism and defensiveness, as was the unsuccessful mandate of the record labels and publishers. This starts with understanding the consumer experience and appreciating what they will continue to want as technology evolves, with or without the industry buy-in.
The folks at Realtor.ca take this responsibility seriously. They are always looking to improve the consumer experience. Outside of the many millions of interactions consumers have with Realtor.ca, they are interacting with the industry through showing services, CMAs, MLS email, direct message updates and other services commonly offered through real estate boards, brokerages, franchises and the like. When vetted for implementation, most of these services go through a rigorous testing and approval process led by realtors.
Case in point: Consumers to lead change
One of the authors of this article recently purchased a home and used the services of a local realtor. Set up on the email update service that the MLS platform offers, every time there was a listing of interest, they would copy the MLS number and paste it into the Realtor.ca app because the thumbnail photos didn’t expand otherwise.
The experience was antiquated and less than pleasant. It would not take much for the consumer to be enthralled with a better experience elsewhere. But, if there was a suggestion to change systems, to go with something more consumer-centric, to disrupt the current “what we know,” leadership would be met with harsh resistance by the membership.
Change in the real estate industry has often been led by what is best for the realtor, which is okay in some circumstances. But if the change is detrimental to the consumer experience, the real estate industry must do better.
Realtors must look at all services provided through you (your brokerage, board, franchise, etc.) as if you are looking at it from your customer’s perspective. When considering changes in service providers or offering new services for members (such as a new showing system), real estate boards are encouraged to prioritize the consumer experience when making these pitches to the membership.
Everyone in the industry is equally responsible for the future of the industry. That future is bright for realtors and the value they bring, but only if we continue to adapt to the ultimate end-user’s expectations. Because, as history has taught us, the consumer is undefeated.
Thank you Jeff and Trevor for this thought provoking article. I am the founder of DIYoffer and we have launched the next disruptive platform to allow autonomy and transparency in real estate. The tools are here for the buyer and the seller to work out the terms of a deal without any Realtor required. Realtor’s have a practice of blacklisting any seller doing an alternative DIY sale. This is a wake-up call because Realtor’s can bring value to the table or if they don’t they will be bygones.
Done, tried, failed. As early as 1979. Address commissions.
The issues I find with most initiatives and changes are proper communication and roll out. We have a diverse group of membership with different preferences of how they receive communication, and different levels of the ins and outs of the industry as a whole.
Leadership has to ensure they have a strong and diverse communication plan, open dialogue, and the right people to champion the change, if not they may be met with resistance. This are important pillars of any change management.
The issues I find with most initiatives and changes are proper communication and roll out. We have a diverse group of membership with different preferences of how they receive communication, and different levels of knowledge of the ins and outs of the industry as a whole.
Leadership has to ensure they have a strong and diverse communication plan, open dialogue, and the right people to champion the change, if not they may be met with resistance. These are important pillars of any change management.
INDEED and thanks for the good ideas conveyed within your virtue-signalling rant but please realize that every service Provider is (very likely) also a service Consumer.
Consider, if/when the realty association services that WE realty service consumers rely upon no longer meet OUR needs, we too look for alternatives.
The 96,000 S.B.F. (Sales reps, Brokers and Firms – no-matter that REBBA changed the terminology a while ago) consumers of Organized Real Estate ‘association services’ in Ontario are open to exactly the type of DISRUPTION you two BC’ers write-in-circles about in your article.
We 96,000 SBF Ontario members look forward to the New &/or Stand-Pat Decisions taken by our local Boards/Associations based on input from the results of their Board-by-Board Surveys of their local memberships and look forward to those New &/or Stand-Pat Decisions being expressed at the “let’s take a breath and mebbe re-think the whole thing” Special General Meeting called for Nov 29th 2023 under the provisions of OREA’s bylaws.
The expansion of ‘association services’ mandates by the association proponents was (let’s be charitable) eye-opening.
The lack of pre-consultation with the 96,000 was (charitable, again) disappointing.
The repetitiveness and intransigence of the answers from the ‘Ask Us Anything’ panels (never mind the attitudes of moderators) was the final straw.
The Three-Way agreement must be re-opened.
No more associations of boards and associations – THE MEMBERS WANT IN – or else.
No more Permanent Staff Director/Executives without a up-to-date “feel for the market”. May I suggest that the 96,000 association services consumers of Ontario would approve a policy dictating that all Directors/Executives should maintain their provincial registrations and be required to go back to sales for a year once every 5 or 7 years.
SHAKE it up all you want, but remember it’s NOT going to fit back in the bottle again.
Physician Heal Thyself.
An excellent article. At Openn we would rather enable the agents than disrupt them. No one knows how to transact better than an agent, and buyers and sellers trying to do this directly never results in an optimum solution. Better to give them the tools to manage the sales process more efficiently.