The changing role of…estate agents
Tech is changing how estate agents are selling and letting properties. Whether that’s automating processes to provide agents with more time to add a human touch to transactions, or embracing social media to sell homes to the younger generations who are adverse to talking on the phone.
PlaceTech spoke to:
- Vik Tara, chief technology officer of Technology Blueprint property software house, and PropCo, for lettings management
- Kristjan Byfield, director of Base Property Specialists and co-founder of The Despositary, online tenancy compliance
- Andrew Groocock, regional partner for the City and East London region, Knight Frank, international agents
- Heather Staff, co-founder of Spectre, automated marketing services
What are the new skills that estate agents are having to learn?
Knight Frank: Historically, we used to take pages of adverts in magazines, now a lot of those either no longer exist or are purely based online. We’ve had to move with the times and make sure we are engaging with people across the mediums they want, social media being the most obvious. Instagram, LinkedIn, Twitter are all absolutely essential to us. We have Instagram specialists throughout our business. Danny Daggers, who works in our super prime team, has over 25,000 followers. We recently sold a flat where someone saw it on Instagram and put an offer in within 24 hours. This is a key way of finding buyers for us, the high-quality photos that go up appeal to our younger clients and make them want to engage with us. It’s not to everyone’s taste, some of the older agents may not like it, but it works. One of the biggest changes that we have is dealing with millennials and the younger generations now in terms of how they want to be engaged with. They don’t want to speak of the phone for that initial contact, they want everything done over WhatsApp and email.
Base Property: Agents have to be tech savvy. Thankfully, new tech is far more user-friendly than in days of old, the ability to use a platform is less of a concern and more about how a company adopts a new solution. More technical and administrative work will be completed by software with agents delivering the human touch that machines simply cannot. It will be about delivering excellent customer service, personal insights, advice and above all making the consumer feel valued at all times in the process.
Spectre: How to discern between technology that’s going to help them and their business, and technology that is offering a solution to a problem that doesn’t exist. There are so many proptech offerings out there, and agents don’t have the time and/or resource to look at each one. However, they can’t bury their heads in the sand either; if they do, they risk becoming uncompetitive against competitors that have been utilising technology.
Technology Blueprint: Apart from using software to make life easier, there is the vital importance of understanding how brand, image and marketing work in the digital age. Changing market expectations for increased speed, transparency and customer service are putting pressure on agents to re-evaluate how they work, and how they can best present themselves. In a post-Purplebricks world, agents have come to realise that the customer service factor is more important than just tried and tested straightforward sales skills. Then there are the new requirements of increasing regulation, particularly around anti-money laundering. Property is the world’s biggest asset class, and sadly, it has been a way for people to hide and ‘wash’ ill-gotten gains. Agents are now obliged to ‘know their customers’, since agents are at the frontline of ensuring deals are above board.
What will an estate agent’s daily routine look like in 2040?
Spectre: I firmly believe that estate agents will still be playing an important role in 2040. When it comes to buying or selling what is typically someone’s largest asset, in the vast majority of cases, you will be better off engaging a professional to manage that process who knows the local area. I think a lot of the innovation and developments in recent years have tried to downplay the importance of that role, for example Purplebricks, whereas going forward, I foresee the introduction of tech that will help the agents do their job in a more streamlined and customer-focused way. Their daily routine will be much more relationship-focused, with technology taking care of every other aspect of the job.
Technology Blueprint: For agents, it is not unlikely that 2040 will see central administrative functions such as scheduling and planning being fulfilled by bespoke automated systems. A daily routine of face-to-face meetings and actual site inspections and tours, either virtually or in-person for final phase acceptance and high-value deals, will be broken up by sessions in autonomous transport ‘moving offices’, where agents will court clients, review schedules, check dashboards, and digitally confirm contracts, communications and deals.
Knight Frank: I firmly believe we will still be very much engaged in conducting viewings. Now the question is, will we be viewing with the person in the same room? For instance, you could have a machine with a super-steady camera that basically walks around with you, and you’re in real time in conversation with the headset on with a client joining from anywhere in the world. That’s already happening. A lot of the everyday processes, like booking a viewing, are already being taken away from us, but I still think there will be a need for human engagement – being able to actually speak to someone and impart more genuine knowledge.
Base Property: Agents will do far fewer viewings, due to the huge property data on offer, but their job will be to ensure users are engaging with the data, ensuring that experience converts where needed and, as mentioned before, delivering that exemplary human touch that makes a client feel special and valued. Their role will be far more office based than now and I think at least half of the time out of the office will be delivering an experience, for example meeting clients for a chat over a coffee, lunch or dinner.
Are there examples of tech already impacting the role?
Technology Blueprint: Secure digital signatures, mobile communications, online diaries, automated systems for background checks, digital identity and automated process management systems – these are key elements in transforming agency work from something that is office-based, to one which is customer-focused. AR and VR technologies are being used for search and viewings. Also, the use of video conferencing and social media are already changing the customer experience.
Knight Frank: I recently ran a trial to do with Artificial Intelligence and handling queries outside office hours. When we receive a lead outside office hours, the client immediately got a response from the system, answering questions about the specific property they’ve enquired about. It allows you to quantify and engage with people immediately. I met with someone yesterday who I think has a revolutionary product for targeting and picking up vendors, and one of the biggest things that we discussed was what he called ‘proptech fatigue’, which is something we as agents get because we get approached all the time. Where do we put our money? What’s the thing that’s going to genuinely affect our business and improve things? We’re engaging with so many tech companies at the moment, and there’s a lot of things being trialled over 3-6 month periods, but because we’re quite a big organisation it’s not just a case of saying ‘right we’ll take that’.
Base Property: An array of automation tools are removing as much as 75-80% of an agent’s current workload making teams more efficient and freeing them up to focus on revenue producing services and customer experience. Examples of this currently are: Fixflo, Rentprofile, LeadPro, ValPal, mio, GoodLord, DocuSign, PropertyFile, PayProp and The Depositary (my company). You also have EyeSpy360, Giraffe 360 and Matterport being widely adopted by agents to enhance marketing efforts and also report/data capture, we use visual tech very successfully in our interim tenancy inspections.
Spectre: There is some excellent tech out there helping agents to market themselves more effectively (Spectre, Dataloft, CCT, Hello Again) – all of which is moving agents away from ‘blanket canvassing’ to a much more sophisticated and cost-effective approach. Then there is tech that is enabling them to achieve a higher completion rate, such as Gazeal, which aims to drastically reduce the number of fall-throughs. Adoption of this sort of technology is giving agents more time and resource to focus on the ‘value-add’ aspects of their service.
What will be the benefits of going digital?
Base Property: All of these products help agents, if adopted and used correctly, to remove virtually all zero value and repetitive tasks. This means agencies can do more with less, which has got to drive up profitability in the long run. Many of these products come with low monthly licenses of £50-£150 a month, but automate workloads that would costs thousands in salaries. For larger operations, this undoubtedly means reallocating staff elsewhere within the company or removing the role to save money. The only evidence I can give for this is my own agency where tech is the backbone. We look after a portfolio of over 200 properties, of which we manage around 150, with a turnover of £600,000 a year and all with a team of just five staff. We operate around the 25-30% profit margin in an industry that averages around 16%.
Technology Blueprint: Technology, when deployed well, is excellent for introducing standards of service that can be maintained. Achieving a consistency of experience through scalable technology allows businesses to grow and enables people to focus on what they do best. Time or cost savings in one area leads to increases in productivity in other areas. For example, digital signature integration can significantly reduce stationery and postage costs, while at the same time, cutting the turnaround time on deals to hours or minutes, as opposed to weeks or days. Efficient multi-channel communications enables one to reach clients wherever they are, in real-time, whether that is to market a new listing, or to confirm a new deal, to arrange an inspection, or to provide real-time updates for an ongoing transaction, therefore increasing the quality of customer experiences.
Spectre: Tech will increase the level of service estate agents can offer. The millennial generation, accustomed to high levels of service and instant gratification, is taking a stake in the housing market. Currently, when booking a viewing, if a potential purchaser enquires on a Sunday, they will need to wait days before the viewing is confirmed. Online booking tools will allow for vastly improved communication. This is vital in what is fundamentally a service-profession. There will also be significant benefits for agents as they will save both time and money.
Knight Frank: The idea is hopefully we can become more targeted, more cost effective, and we’re engaging with the right dynamic on the right profile of person for our brand. It will provide us with a better understanding of our customer base, and probably the most important thing for a business is to build trust. It’s going to make us a lot more streamlined and remove wasted time for negotiators to keeps us efficient.
When do you expect to see the tipping point for adoption?
Knight Frank: The tipping point is starting to happen now. If you stand still as an agency your business is really under threat, you have got to move with the times. We’ve been through a tough couple of years really with Brexit, and that’s enhanced the need to digitise. We’ve got agents here who have been working in the industry for 40 years, for them it’s mind-blowingly different to where it was when they started out, but they are engaging with it because we have to. It’s absolutely essential.
Spectre: The tipping point will be the arrival of technology that enhances the experience and transparency of the process for vendor and buyer whilst also optimising and streamlining the agent’s business. I think that will happen within the next five years.
Technology Blueprint: Firstly, digital transformation in our personal lives has encouraged people to apply these developments into their professional lives. Property is a people business, and people want to move with the times. Secondly, disruptive business models and regulatory pressures have combined to make agents rethink their commercial fundamentals. Is it really best to try and ‘win big’ with a huge fee, or are incremental gains more important? Would you rather sell a cinema ticket for £10 once or twice a year, or take £5 per month as a subscription?
Base Property: We are in it now. With the increasing amount of legislation and licensing coming into effect, agents that want to conduct even a reasonable volume of business and remain compliant need to adopt tech to facilitate that. Staff, and training, is too costly and onerous to be a valid long-term approach for lower value, admin-based roles. Added pressure from the likes of the Tenant Fee Act and a dipping sales market only accentuates this need to be as efficient as possible.
Who will be the winners + losers?
Base Property: Those that fail to adopt tech will either be unable to achieve profitability or will get heavily fined for breaching multiple compliance matters. Tech-friendly agents, who effectively adopt solutions, will continue to evolve and adapt to a changing market and do well. The marketplace will shrink from its current volume by around 20-25% over the next 5-10 years, largely to the benefit of corporate and larger operations as they acquire a lot of these businesses. However, I believe it is the better independent operations that will lead the way in terms of innovation and evolution, as is seen in many other sectors.
Technology Blueprint: The winners will be those who make smart choices in their technology partnerships and take advantage of the opportunity space presented by technology for speed, standardisation, flexibility, and quality of service. The losers will be those who cannot change and adapt in an increasingly fast-paced and agile sector. Undoubtedly, build-to-rent is generally going to have a big impact, and as inefficient companies fail, there will be consolidation by mid and large players who are currently thinking about future-proofing their organisations. The physical asset mix is going to continue to evolve, and home ownership will also change. Good quality, professional, and above all else, passionate experts, will almost certainly come to dominate the agency space, both individually and as corporations.
Spectre: The winners will be those that embrace technology and don’t succumb to pressure on fees. Transaction volumes are down, properties are taking longer to sell, portal costs are rising, meaning that if the cost base is too high and fees too low, they will inevitably fail. I expect the implication of this will be some industry consolidation over the next few years, which the better prepared agents should see as an opportunity.