Why Verbal Communication May Not Be Necessary in the Real Estate Transaction of the Future

The world is predominantly moving towards technology as our main form of communication. We witness this daily through people glued to their phones in restaurants, parks and other public places. And this movement shows little sign of stopping. With the rise of instant messaging, even making a phone call to talk can be considered too much of a hassle. Currently, there are over seven billion worldwide instant messaging accounts (not including mobile messaging), and that number is expected to grow at an average annual rate of six percent over the next four years and reach 8.9 billion by the end of 2023 (The Radicati Group, Inc., 2019). At the end of 2018, Apple released its top 20 downloaded free apps for the year, and of the top 20, seven would be considered messaging or communications apps, including Instagram, Snapchat, and Facebook Messenger.

Instant messaging has not only affected how we communicate with friends, it’s even changed how we conduct business. Almost all major tech organizations offer customers instant messaging capabilities. We all know the familiar frustration of endlessly repeating “speak to a representative,” and it’s clear that service-based communication preferences are trending towards quick instant message or chatbot-style features.

Consumers obviously prefer such technological advances, but the real estate industry has been extremely slow to adapt. In a typical real estate transaction, the agent representing the buyer discusses transaction terms with their client. The agent then writes up an offer and sends for signature through e-signing software. Once this process is complete, the majority of the communication with all parties is via e-mail, including the submission of the offer and contract documents. With consumers clearly showing a preference for faster communication methods, could agents or the “this-is-how-we-do-things” mindset be what’s holding us back?

In seven years as chief operating officer of Concierge Auctions, a luxury real estate marketplace that has generated over $2 billion in sales, I witnessed a dramatic change in how real estate buyers wanted to communicate when purchasing a luxury property. Less than 10 years ago, the average buyer wanted to participate verbally in the real estate auction, either in person or over the phone. I experimented with many early online bidding systems, but consumers just weren’t ready for this type of experience. However, I did begin to experience the desire for the phone bidder to listen to the auction and communicate to their bid assistant via SMS. In 2016, Concierge started to make a dramatic shift to online bidding only. High net worth clients who originally told me they would never bid online were now saying they would not want it any other way. The technology, user experience and more importantly the client perception have all changed in a short five-six year period.

Will these business-to-consumer communication preferences shake up the real estate industry for the better? Over the years, there has been speculation on the diminishing role of the real estate agent in the transactions of the future. Simultaneously, consumer frustrations with the slowness and confusion that exists in the buying and selling process manifested new products from companies like Opendoor, Knock.com and Zillow Offers. These iBuyer companies are receiving billions of dollars in funding with the hope that these PropTech businesses can move mountains with the click of a button. However, these companies and products are also a direct threat to the traditional real estate agent.

I believe that the real estate agent is first and foremost a wanted and needed advisor in the process, and with technological advances increasing industry efficiency, there is opportunity for agents to focus on consulting and improving the transaction. Tech advances also provide tools that reduce administration time, which will increase the amount of time available to search for new leads and consult existing clients. Centralized instant messaging allows for instantaneous responses to questions about offers, counter-offers, best and finals, and which offers will be accepted. The possibility of being able to communicate property updates via automated text and email alerts will in turn alleviate an agent’s pressure of scheduling phone calls and waiting for a call back response to make their next move on a deal. More time means agents will be able to take on more listings and have the potential to earn even more money than they would in the current transactional landscape.

With this realization, I developed SparkOffer, which provides agents a competitive advantage by digitizing the traditional sale process and incorporates auction-style offers that provide sellers with competing offers. SparkOffer’s software creates a streamlined process for agents, buyers and sellers that allows for interaction on an internal messaging dashboard via SMS or email, eliminating the need to verbally communicate offers and counter-offers. Buyers or agents begin the process by submitting an offer from desktop, mobile or tablet devices and sellers receive both SMS and email alerts in real time. 

While other PropTech entities focus on allowing buyers to simply view online listings, SparkOffer users can interact and make binding offers with or without the assistance of a buyer’s agent. Buyers can quickly walk through a simple offer process, and sign offer agreements from any device, while sellers receive immediate text and email notifications of their offers and can provide real-time feedback to interested buyers.

Homeowner Michael Levine listed his Mahopac, New York home with SparkOffer specifically to utilize the real-time capabilities enhanced by the availability of the internal messaging system. “SparkOffer is making it possible for interested buyers to place an offer on 464 North Lake Boulevard at their own convenience, eliminating the back-and-forth from the traditional process and appealing to digital-age expectations,” said Mr. Levine. 

It is these digital-age expectations that are going to drive the real estate industry forward, but true industry gain can only be made if agents remain an integral part of the transaction process. Having tools that will increase agent efficiency will be beneficial to all parties involved in the sale, as less time is needed for verbally communicating transaction updates, counter offers, etc., and more time can be dedicated to consulting: a main, and extremely important offering agents provide their clients. The future of the real estate transaction process sounds silent but reaps big rewards for buyers and sellers.

Read more here.

Join us November 12-15 for the Property Portal Watch Conference Madrid 2019.