According to a recent Forbes article, brokerages have been avoiding big changes in their business models to meet the needs of their customers and employees. Residential real estate continues to be sold via real estate offices, brokers and exclusive property listings, but that seems to be changing quickly. In the past, brokers closely held real estate listing data. Multiple listing services have helped centralize data and websites have made it easy to publish. In other words, technology changes are causing brokers to lose their role as keeper of the information.
Potential problems facing brokerages include:
- Technology (e.g., artificial intelligence & blockchain)
- Real estate agents are increasingly organizing themselves into powerful teams and putting increased demands on brokerages for more services and facilities.
- Startups with innovative business models (e.g., Amazon & Expedia) that can potentially challenge legacy brokerages.
Forbes describes brokerages of the future will be a company that:
- Spend more on technology and research than marketing and payroll combined.
- Deploys AI and sophisticated technology to anticipate and meet the demands of its customers.
- Creates a custom experience for each website or app visitor (via AI and technology)
- Provides its customers with sophisticated tools that help them identify, locate, assess and purchase properties, aided—but not controlled or managed – by a real estate agent.
- Leverages the blockchain to optimize and secure all interactions and transactions with its clients, employees, and partners.
- Understands the mobile nature of our society, and creates innovative and creative ways to market to and engage with mobile client base.
- Offer different ways to hold real estate listings, such as keeping some as exclusives, sharing others as multiple brokerages listing and offering certain types of listing via an online shopping car model of listings.
- Becomes less reliant on physical offices for customers visits, while expanding offices as workplaces for its agents and teams.
- Supports and brands its various agent team structures, handling them as “companies within the company,” where the teams are co-branded with the company, rather than sitting under the brand.
The human service aspect of real estate won’t go away when real estate remains a high-value transaction. But clients will demand more control and brokerages will likely spend more time studying, predicting, and pursuing their clients. The business model of how brokerages operate in the future will likely shift.