PropTech roundup #5: We are not a real estate company anymore, says KW
We seem to have reached a tipping point in the real estate industry, when one of the world’s largest real estate companies declared:
We are a technology company. №1 that means we build the technology. №2 that means we hire the technologists …. We are not a real estate company anymore ~ Gary Keller, Keller Williams co-founder
Traditional real estate companies have woken up among a growing number of new (Wall Street backed) real estate models that is threatening the status quo. This declaration will certainly spur other large real estate organisations to follow suit: Make declarations on their technology vision and/or start buying up smaller tech companies to keep up with the status quo. Re/max already started and bought web design company Booj.
But it is quite a minefield out there. So many technologies, so many different models. How do the big real estate companies of the world like Re/max and KW position themselves and ensure that they are not left behind? Difficult to change direction for such big companies with deeply entrenched business models and processes. Industries are usually disrupted from people outside the industry..
After watching the videos from Gary Keller, it really is clear that they want to go it alone. They want to take back control of their data, and put more focus on building their own systems. He clearly says that they want to ditch bolt-on technology and in his speech basically gives the middle finger to all the vendors they currently work with, including Zillow…. bold move.
He goes on in saying to the agents:
“You have singlehandedly created the most valuable real estate company in the country called Zillow. They don’t create their own content,” Keller added. “It’s your data. [Real estate portals are] just using money and technology to enhance the experience so everyone wants to go there.”
Well let’s be honest — agents have helped to create every big portal out their with their data. We all know data is the new oil, but you have to ensure that the model supporting that data is perfected to attract eyeballs — and it seems all real estate companies miss the importance of the user interface and experience. (I also find it quite strange that agents would share new mandates on social media that links to portals instead of their own websites…no confidence? Why are they reluctant to promote their own website and brand?)
This is what most big portals get right — laser focused on a fast and user friendly interface, mobile apps etc. There is a strong investment in all the tech including the online user experience. It seems real estate companies have only now woken up to the the advantages of a client 1st focused approach when it comes to online. Rather have dead slow image rich websites that looks good but fails on the rest, think responsive website design is a fad and that writing quality content doesn’t work. Too late.
Will other big real estate franchises follow suit and declare war on the portals and other service providers like KW did? Not sure if anyone has the balls. But kudos to KW for taking an approach and making their agents believe that this is the right way forward.
AI is changing real estate investment
This is a very interesting read on how Artificial Intelligence is changing real estate investment. Companies like Ten-X and Opendoor is starting to transform real estate investment and traditional brokerage models much like passive investment funds revolutionized the stock market in the 1980s. Using AI will be a key for real estate companies going forward, and we are already seeing the impact on AVM with iBuyer models and tech first companies like Redfin.
Banks want to work more with PropTech companies
Unsurprisingly banks see the opportunity in jumping into the real estate transaction. In most cases, they are financing the whole deal, so why shouldn’t they?