The real estate industry has been re-defined by innovative technologies which have completely changed the face of the industry. Many real estate professionals fear the threat of being replaced by emerging technologies like Proptech and artificial intelligence, which have the potential to evolve and develop even more. However, this technology-driven disruption is not as dramatic as many thought it would be. Business frameworks may be altered, or the goals of various real estate companies may be modified, but Technology will not replace real estate advisors. Rather Technology is a profound addition to the real estate industry as it has made it tech-oriented. At present, every domain of the real estate sector is dependent on Technology. Whether it is marketing, development of projects, management or buying and selling, the human element remains irreplaceable.
Nevertheless, Technology is increasing the competition in the market. Therefore, real estate advisors adapting to emerging technologies are more likely to replace advisors in this competitive industry and not otherwise. This industry cannot function without the human essence, and Technology can never replace the job of a real estate advisor. Hence, finding a proper balance between Technology and personalised service in this industry is the key to keeping up with the ever-changing technological trends and demands.
Reasons Why Technology Cannot Replace Real estate advisors
An industry based on Relationships
The real estate industry functions based on relationships. Connections between buyers, sellers, vendors, and real estate advisors are crucial for running the business. Thus, a real estate advisor develops relationships with prospective clients to grow and attract new businesses. They also require large referrals based on effective communication, healthy relationships and trust with the clients, as well as with the community as a whole. Moreover, properties sold by builders and developers are not possible without a personal connection, communication and interaction with people within the real estate network. Also, clients prefer human interaction, mostly in real estate dealings, instead of depending solely on Technology. So, while Technology may aid the real estate processes by making them hassle-free and quick, it can never build or maintain relationships the same way a real estate advisor can.
Knowledge about the Locality and the Market
Technology has made looking up information regarding property value, cost, and benefits easier. While technological tools can assist a prospective client in research, they are never quite as good as the knowledge and perspective provided by a local real estate advisor about a locality and the real estate market. A real estate advisor better understands the local area in which business is conducted. Things like characteristics of various neighbourhoods, types of infrastructures, local regulations and facilities, public transport, and local amenities can become useful resources for prospective investors. Moreover, immense knowledge about the industry and locality also shows the level of professionalism of the real estate advisor, which Technology fails to deliver. For example, a real estate advisor can physically look at the property, taking into account its condition and surroundings, to gain the confidence and trust of investors. On the other hand, data stored on technological platforms can be months old. Thus, it cannot replace real-life conversations between an advisor and the client.
Technology lacks the factors of sentiments and personal touch which real estate advisors provide. Investing in a property is a huge deal for a client as it comes with many apprehensions, doubts, emotions, and fears. Clients might use Technology initially for research and to know about the market trends, but when it is time to decide, most of them will prefer to do it in person. A real estate advisor’s job is to help with the client’s concerns by clearing all doubts and fears and convincing the client to purchase. Moreover, the advisor also assists the vendor’s needs given their situation, thus fulfilling the job of a middleman, thus, balancing both sides of the equation. This bespoke aspect of a real estate advisor cannot be replaced by Technology, no matter how advanced.
Multiple innovative technological platforms have emerged to assist with the buying and selling properties. For example, iBuyers are technological-based companies that buy homes straight from the owners, offering a non-interactive experience for homeowners (iBuyer.com, 2022). While such innovations are acquired for various purposes, a large number of clients still prefer traditional buying and selling processes due to the flexible negotiations it offers. Conventional real estate negotiations are personal, as a real estate advisor can cater to the requirements and needs of prospective clients. Technology cannot comprehend the client’s motivation and needs and interpret what the client might be prepared to pay. On the other hand, real estate advisors are dexterous negotiators and have people skills to make deals and offers with the client. Technology cannot replicate such skills and negotiations.
The technological revolution has led to the accessibility of huge amounts of data at the fingertips of buyers and sellers. However, this data is useless without a real estate advisor who can translate it and acquire it to reason with prospective clients. The reasoning is crucial as it aids the client by mentally navigating all the ins and outs before the offer is presented, after which negotiation starts. For example, an advisor can evaluate a property by showing a client the full picture and also figure out the prospects and challenges if the offer is accepted or turned down by the client. Conversely, Technology can show the client a list of prices or days on the market and only function effectively when the outcome is always similar or can be predicted. It lacks reasoning and judgment, which is important in the decision-making process.
Emotions and Empathy
Investing in real estate is one of the important decisions for a client. Therefore, they look up to an expert opinion or someone with experience or skill in the industry. In today’s competitive market, various real estate products and services have multiple bids so that a client can lose out on an offer. Moreover, some clients invest based on emotions. In such cases, a real estate advisor knows how to respond, keep a client satisfied, give motivation when required, and develop an emotional bond, making the complex real estate process convenient and hassle-free. Technology cannot detect changes in body language or encourage clients during difficult situations. This type of skill is limited to a professional and experienced real estate advisor.
Technology will not replace a real estate advisor from the industry anytime soon. It is a beneficial tool, not a threat, at the advisor’s disposal. However, advisors who do not avail the advantages of technological advancements are probably in danger of extinction. As this industry is growing highly competitive, real estate advisors must adapt to innovative technologies to stand out in the market and thrive. It will help increase the productivity and efficiency of the real estate business and benefit the economy in the long run.
This article is written by Haneen Gul. Haneen is a Research Analyst at the Iqbal Institute of Policy Studies (IIPS).