Venture funding has poured into the development of real estate technology in recent years, as startups take a greater focus on building tools for the industry. However, this surge has also brewed fears over the growth of alternate forms of brokerages and technology replacing agents.
Matt Murphy, chief marketing officer at Chime Technologies, which bills itself as an “operating system for the real estate industry,” says brokers shouldn’t fear the tech revolution that’s happening, but instead find ways to leverage it to empower agents.
Here are three tech-powered areas that many brokerages are prioritizing in 2018:
The threat of cyberscams continues to grow as hackers increasingly targeted real estate transactions in 2017. One of the biggest threats: wire fraud. Cybercriminals break into the emails of real estate and mortgage professionals, learn the details of a transaction, and then send a spoof email to the customer near closing day that contains new downpayment wiring instructions. Although the email appears authentic, once the customer transfers funds to the fraudulent account, the funds are virtually unrecoverable.
More technology is debuting that offers greater protection for real estate transactions. But the question remains on how to implement it on a wider scale to make correspondence more secure. After all, more than a quarter—26 percent—of real estate professionals say they have no policy for storing and disposing of confidential information on electronic devices, according to the 2017 Shred-It Information Security Tracker Survey.
“Whether it be on lingering paper documents or electronic devices, properly disposing of or securing sensitive information is the best way for a business to protect their customers, their reputation, and their people,” says Kevin Pollack, senior vice president of Shred-It, an information security firm.
That means real estate companies of all sizes need to start taking proactive measures to ensure their agents and employees are trained on destruction procedures, Pollack says. Brokers should also make sure sensitive information is stored securely, and that they have a system mitigating security threats.
What your brokerage can do: First step, educate your agents about growing cyberthreats so that they can warn their buyers and sellers about these scams. Hector Pimentel, broker-owner of RE/MAX Advantage in Albuquerque, says that his agents ask their clients to call them or the title company on the phone before wiring any funds to make sure the messages they’ve receive are legitimate.
Revisit your brokerage’s transaction security. Conduct an internal audit of your current procedures and implement a policy for storing or disposing of confidential information, security experts recommend.
Some brokerages are adding more technology layers as a defense, such as encrypting emails to make communications more secure. Biometrics is also being used to keep messages between agents and clients safer from hackers. For example, Trusted Mail—a member of the National Association of REALTORS® Second Century Ventures REach Accelerator Class of 2017—is a company that offers a facial biometric sign-in to create and send a secure email.
The internet allows you to cast a wide net in the hunt for prospects, but you can also use it to drill down in a much more targeted approach. According to the Hyperlocal Real Estate Survey commissioned by zavvie, an online marketing startup, 95 percent of the 350 real estate agents, team members, and broker-owners who responded said that local market knowledge is “very important” or “extremely important” to their clients. However, only 12 percent admit that their marketing specializes in neighborhoods. Instead, the vast majority said they “specialize” in a large regional or metro area, according to the survey.
“Agents, teams, broker-owners, and execs are saying one thing and are doing another,” says Lane Hornung, CEO and co-founder of zavvie, who defines a hyperlocal marketing area as a neighborhood or group of neighborhoods consisting of about 3,000 homes or 10,000 people.
What your brokerage can do: Revisit your marketing approach, which might mean a return to traditional methods. Look at which neighborhoods your agents are targeting, and how deeply are they targeting them. “It’s returning to the old way of doing business, like farming with neighborhood postcards and getting to know the neighborhood people by knocking on doors, organizing picnics, and [offering] giveaways,” Pimentel says.
Use technology to foster deeper connections with that target population. For example, do your agents have a neighborhood website, blog, or social media page focusing on that specific area? Urge them to get on Nextdoor.com, which offers social networks for neighborhoods, where they can start connecting with people who live there. Join or start neighborhood or community pages on Facebook where you can engage with neighbors and share your content and events, too.
Some brokerages also use community contests to encourage engagement, such as holiday light contests where your company awards a cash prize or gift card to the winner.
Find ways to get face-to-face with neighbors. David Serpa, leader of The Homes Team with Signature Real Estate Group in Murrieta, Calif., hosts several events throughout the year, such as sponsored Easter egg hunts and holiday-themed festivals with petting zoos and inflatables for families.
Big data has been a buzzword in the real estate industry in recent years, but now it’s evolving into talks of artificial intelligence and how this technology can leverage for predictive analytics and new ways to reach out to clients.
“I believe AI will have a defining year in real estate in 2018,” Murphy says. “AI will take the massive data that’s available and help your brokerage make more sense of it with actionable insights.”
For example, AI could be used to identify transaction patterns and make predictions from it, like who might be gearing up to sell their home based on indicators such as children’s ages or a recent divorce. It could be used to automate repetitive tasks.
What brokerages can do: More CRM programs are incorporating AI technologies to help users learn the best time to connect with a client. For example, Chime Technologies debuted an AI-enabled smart dialer in November called Belle. The system compiles information on how consumers interact with your brokerage—whether that be how they browsed your website, the property alerts they set up, what they said in a text to an agent, or even if there’s been no interaction at all. Leads are assigned a score based on the actions they take. The system then generates a customized action plan based on those actions. The score constantly changes depending on how the prospect is interacting with your brokerage and adapts scripts and follow-ups for agents in real time.
“We view AI as an enabling technology. We believe it will help agents, and they do not need to fear being replaced by it,” Murphy says. “Consumers will still want a person to lean on who understands the dynamics of the market and can help guide them through such a large transaction. But AI can help brokerages better plan their approach.