Have you ever wondered how industry-specific software and property portals have influenced the typical estate agency of today?
A new book, which aims to help agency owners reinvent their businesses, charts the impact of software, portals and big data on the UK property industry.
'The Estate Agency Revolution', written by best-selling author and CEO of Iceberg Digital, Mark Burgess, provides innovative agents with guidance on how to become a digital and data-driven business.
Readers will learn about the importance of building meaningful and critical data inside a business, what that data looks like and what agents can do to ensure they are not superseded by technology.
The book, which looks at how other sectors have adapted over the last two decades, has been written as a roadmap for an industry which Burgess believes is about to change beyond recognition.
Below, is an excerpt from The Estate Agency Revolution, which focuses on how the introduction of mass information storage destroyed the personal touch of estate agency.
It also sheds light on how the emergence of major property portals gave rise to commoditisation, the concept that all estate agents now seemed the same......
"Around the late 90s to early 2000s, the future arrived into mainstream Estate Agency. Specific software for Estate Agents!
Bill Gates future of a computer on every desk had made its way into the Real Estate sector, generally accepted as one of the laggards of technological adoption. The dreams being created on these systems were what now seem like simple access databases, not dissimilar to excel, where you could store all of your information without the need for paper or cardboard boxes.
Now you could add buyers, sellers and properties to the computer. But what impact would this have?
Initially, the impact was great. As an agent, you would no longer have to ‘cleanse’ your list of buyers as you could just automatically match your potential buyers with all of the properties you had loaded onto the software. Press another button and the software would email all of those buyers with the details of the matching property, albeit a very basic match based on a very general location, number of bedrooms and possibly a price. Easy.
Or so we thought at the time. As it turns out, a person’s search for their ideal property involves many things that were beyond the limitations of software in the year 2000. After all the world had only just been introduced to the BlackBerry phone and the first iPhone was still some 7 years away.
The property matching at the time was based around 3 things:
1.Is the property in the buyer’s price range?
2.Does it have enough bedrooms?
3.Is it in the correct general location?
Whilst this is a logical way of working for a software developer, the actual factors that decide if a buyer likes a specific property boil more down to the look of the property, the condition of the property and the very specific location of the property, as two neighbouring roads can be extremely different.
This was all possible when we, as agents, were working from the memory of conversations that we had had with the buyers, but the introduction of this mass storage of information destroyed something that made Estate Agency fundamental to not only finding the right property, but to selling the property to the right person for the best price too. The personal touch of Estate Agency.
When I had my box of buyers, I knew them inside out. I never sent them random properties just because those properties were in the right general postcode. I knew they were looking for a specific estate.
I knew, when I valued a property, exactly who we had registered that was going to buy that property too and how much they could afford to pay for it.
The next stage of this depersonalisation came from the property portals. There were many over the years but currently the two main ones that remain are Rightmove and Zoopla. There are others but none currently worth mentioning for this purpose.
Whilst Zoopla did not exist back then, they did buy up most of the successful original portals, so for the ease of this explanation we will use them.
These portals again showed much initial promise to Estate and Letting Agencies. They arrived like a white knight to save the industry from the huge expense and short shelf life of the local newspapers and to be fair, they did do just that.
Unfortunately, they also created an extra layer of de-personalisation. They did this because Buyers could now sit at home and happily keep themselves informed of what was on the market and where. The property matching on the portals was not only more sophisticated than that of the Estate Agent’s, but it covered all of the properties for sale, not just those on with that one agent.
This led to my buyer no longer needing to hear from me about properties, and instead of me, they would contact the agent if they saw something of interest. The agents used these portals to tell sellers what a ‘great reach’ they could have and as such, could now not reverse out of using them.
Personalisation in Estate Agency was dead. This gave rise to commoditisation, in that all Estate Agents now seemed the same. They all had a ‘Big Database of buyers’, they all could ‘List my property on the portals’ and, as a result, any useful knowledge that could have been gained from our history and memories was no longer being retained in the process. It just became about who would charge the least.
This process was not instant but took place over the first decade of the 2000s - from 2000 to 2010 roughly, but as I mentioned earlier, Estate Agency is a laggard when it comes to technology. This process had taken place in certain other industries as much as a decade earlier. In fact, outside of Estate Agency, the world had moved on dramatically from this concept, seen the problems it created and, by the end of the 2000s, had started to try and find the solutions using Big Data.
Since then, the shift in the way these types of companies work has been so significant over the past decade to 2020 that, according to the Harvard Business Review, people who have been in business for at least a decade should define their businesses as BBD and ABD, or Before Big Data and After Big Data."
The Estate Agency Revolution is due to be released and available on Amazon this month. Please register here for updates on its release.