The views expressed in this column are solely those of the author.

 

Creeping close to two decades in this business, I’ve seen one thing remain constant: real estate has become a testing ground for shiny things. Most of those shiny things are unwanted and, even when they aren’t, they’re often forgotten because they didn’t deliver on the elusive promise to make your business pop.

To uncover which technologies actually deliver on the promise of putting dollars back in the pockets of brokers and agents, I reached out to Evan Shandler, COO of Sotheby’s International Realty Canada. Shandler joined the company in 2009 and has worked across its operations as the industry moved from fax machines and scattered email attachments to platforms that let managers and support teams see a transaction evolve in real time.

Our conversation confirmed something brokerage operators know but technology vendors sometimes forget. The most valuable technology is rarely the shiny thing. Rather, it is technology that removes a task, ensures regulatory compliance, catches a problem earlier or gives an agent more time with a client. The rest is a shiny distraction.

 

The conversation

 

NF: Having watched brokerage systems evolve since 2009, what have you seen agents say they want from a platform versus what actually changes their productivity, loyalty or client experience?

ES: We live in the age of shiny things. Real estate as a whole is a market for technology where, seemingly, we are the testing ground for any number of new technologies. I have seen so many different apps and platforms over the years that purport to handle everything, while others are super niche. Agents may see something that really piques their interest.

At the end of the day, it comes down to the relationship business that we are in. Technology can help with the day-to-day minutiae, paperwork and document management. But the things that really matter are technologies that free up the agent to spend more time on their relationships, whether with clients or with people in the back office.

NF: What did those transaction platforms change in practical terms?

ES: The versioning available in a platform such as SkySlope is really valuable because you can see the life cycle of a transaction. If it started as a listing, you can see the price reductions and the documentation in one place. Before that, even after fax machines were being outmoded, there were many emails with different attachments floating around. The evolution of a deal could get complicated because of the amount of one-to-one contact. Putting the information in one place simplified the communication.

The collaboration on the platform is also valuable. Managers can look at the paperwork in real time, highlight part of a contract and say, “We need to get this item or this clause signed off.” The conveyance team can comment on the documents or flag an amendment for a manager because it needs more information. That level of collaboration was difficult when we were sending emails or faxes.

For a broker of record running a large operation, touching every transaction is probably not reasonable. Experienced, detail-oriented conveyancers and deal secretaries can highlight issues before they occur. The liability for managers is high. If the technology does not let us handle the information, we probably would not be able to operate.

NF: What operational supports are less visible or less flashy, but genuinely move the needle inside a national brokerage?

ES: It is the people behind the brand who probably do not get the accolades you would expect. At Sotheby’s International Realty Canada, we have put a lot of time and effort into the deals department, the listings department and compliance as it relates to FINTRAC. Those things do not often get headlines. 

Everything starts with great managers. If you have a great team of managers, you can conquer everything. Agents also need to understand the value they can glean from those managers as they level up in their careers. There can be friction. If we are tough on FINTRAC, or a deposit arrives and someone from finance starts asking where it came from and who it belongs to, that can be jarring. In the larger scheme of things, it makes everything work much more smoothly.

The financial strength and expertise of an organization matter much more than many people estimate. When the accounting goes awry, things go belly up very quickly.

NF: When a brokerage introduces a new tool, process or system, how do you assess whether it helps agents instead of adding more noise and administrative burden?

ES: When we look at anything new, it has to do three things. It has to save time. That is non-negotiable. It has to return value for the investment. And above all, it has to reduce friction in the agent’s day-to-day life. Agents are the target for all of these technologies, and some come with a huge premium.

Integration with the larger workflow and other essential technology is really important. We have all seen things that promise the world and make you think, “That could be so great.” But if the technology injects roadblocks into the current workflow, no matter how great it is, it might slow you down. When we introduce something, it is important to follow up, look at adoption rates and understand the actual day-to-day use case.

NF: CRMs are probably the classic example. Brokerages are approached constantly by companies promising automation. Why is adoption so difficult?

ES: AI-driven CRM platforms will revolutionize business, including the real estate industry. We’re excited about that. However, CRMs are personal to the agent. Anyone who has been in the business for a while has either selected one, or has personal preferences as to how they manage client relationships. Our goal is to introduce world-class technology, but also honour an agent’s personal choice. Having a single CRM for a larger group is difficult because we do not want to tell somebody how to run their business. There are a million different working methods.

We have agents who may do three deals a year and hit absolute home runs, but those deals take months to put together. That is wildly different from someone doing higher volumes in the condo market or subdivisions. The agents themselves are so different that it is not one-size-fits-all.

NF: As brokerage margins tighten and agent expectations rise, where should franchisees and brokerage operators focus their time and capital over the next three to five years?

ES: We look at a few different levers. One is agent productivity. If an agent is doing six deals a year and has the ability to improve, we want to help get that from six to 12. Another is average sale price. An agent joining Sotheby’s may want to move into a higher price bracket and increase total sales volume that way. Commission rates are also under pressure, but if the client is buying a superior experience and product, there is no reason it should not command a somewhat premium price.

Curating our rosters as brokerage operators is really important. We need the right people addressing the right markets and charging the right prices. As agents retire or exit the business under competitive conditions, the agents who are dedicated to the profession, who offer greater value through their brand, marketing and networks, will be more successful.

Agent productivity matters, and agents have to leverage whatever the brokerage does well. A brokerage is only successful if its agents are successful. That shared goal is what makes the model work.

NF: Where do you see the industry five years from now? You can take that anywhere, including agents, brands, technology or the market.

ES: Technology and AI will transform our industry, but the personal relationship between agents, brokers and the clients will remain the foundation of our business. The amount of data available in the United States is shocking, while in Canada it is much more locked down. That means data transparency for the industry may be a longer-term goal.

The larger question is whether consolidation will continue. As agents are absorbed into larger entities, there is a concern about whether they are allowed to be who they are within a brand. We may see fragmentation at some level and smaller boutique brokerages emerge. In some ways, younger generations are more brand agnostic, and bring a more personal and personable sensibility to the profession.

 

What brokers should take from this

 

Technology that works centres around the technical, compliance-related matters of a brokerage, such as reviewing agreements of purchase and sale, managing a deposit and giving a manager visibility to keep the brokerage’s financial records clean. While this doesn’t sound like a great pitch to attract agents, agents who do join will feel the difference when the systems work, and they will certainly feel it when they do not.

As I evaluate technologies that will win in this space, I focus on the following questions: Does the tool save time? Does it lower cost? Does it reduce risk or friction? Will agents use it after the launch presentation is over? If the answer is unclear, then I’d think long and hard on whether I’m buying a feature or solving a problem.

While my crystal ball remains a bit foggy, I do believe, and so does Shandler, that there is no agentless future. Rather, the future he describes likely has fewer casual participants, stronger professionals, more accessible data and agents whose personal brands travel across platforms.

Finally, brokerage brands will still matter, but they will have to earn loyalty through competent management, useful infrastructure and a clear way for agents to become more productive. In essence, despite the AI and market distractions, nothing has really changed about the real estate brokerage business.