REAL ESTATE MATCHMAKING SERVICES THE NEXT STEP IN DIGITAL REVOLUTION
Competition will be about service, as much as superior technoloy, Murtaza Haider and Stephen Moranis explain.
Matches are made in heaven, or so we are told. But in today’s hyper-connected world, matches are increasingly made in cyberspace, and real estate is increasingly no exception.
Before buyers and sellers are matched for sale, they need to be matched to real estate agents. Those interested in selling a property need an agent to list the property on the Multiple Listing Service. In the past, it was either word of mouth, a chance flyer from a realtor in your mailbox, or a billboard that would bring an agent and a prospective client together.
In the future, real estate, as it embraces technology, will empower consumers through more efficient and transparent marketplaces. Already, the industry is seeking to update the legal framework that governs it in order to promote transparency, especially as it applies to situations such as bidding wars, when buyers are left in the dark as to the bids of others.
As for technology, instead of buyers and sellers searching for an agent, the agents will be competing for their business. Canadian entrepreneurs have already started to implement technology-based solutions. Some of these platforms are nascent yet present a picture of marketplaces that will soon become the norm.
Nobul.com is one example of a digital marketplace that helps agents, buyers, and sellers find products and services efficiently. The digital marketplace is designed for agents to compete for business thus providing buyers and sellers with the opportunity to compare services and choose an agent whose offerings they like the most.
We explain Nobul.com’s model with an example. Let’s say you are interested in selling your home. You would like to know what services agents offer and how much commission they will charge in return. You create an account on Nobul.com at no cost and provide details of your property. Soon, you will start receiving proposals from agents who would list the services they offer and the commission they charge.
Now, imagine such a platform to have been running for years and has thousands of real estate agents actively assisting the customers who in turn rate the agents for the quality of their service.
Agents with higher ratings for quality and competitiveness will have an edge in the digital marketplace. A seller who is approached by numerous agents could choose one with a competitive bid and higher rating.
Digital matchmaking is certainly not a new idea. Computerassisted matchmaking services were first introduced in the late 1950s. However, for such services to have a mass appeal required a massive networking platform — the Internet. But that took some time and innovation. Internetbased dating services, such as Match.com, were finally up and running by the mid-nineties. Numerous others followed. Tinder, a popular location-aware social media app, was launched in 2012, bringing the practice of swiping left or right to prominence.
The adoption of technology has never been uniform across all cohorts.
A Pew Research Centre Survey revealed that in 2015, almost 15 per cent of the American adults have tried online dating. A 2017 survey of the newly married revealed that 19 per cent of the brides had met their spouses online. The adoption of digital platforms, however, is more pervasive among younger cohorts.
The Pew survey found that young adults, between the ages of 18 and 24, were more likely to use online dating services with more than one in four reported to have tried the online platforms. With the millennials and Generation Z growing in numbers and economic clout over time, digital solutions and marketplaces will likely see greater acceptance and use.
The millennials are also going to be the largest cohort of firsttime homebuyers. They would have no previous relationship with real estate agents and hence would need referrals. Parents and friends could be the ones referring agents to them. However, given their proclivity for all things digital, millennials and even younger cohorts are likely to search for solutions online.
Already, digital matchmaking services have disrupted or interrupted several industries. Uber and other online ridesharing apps have disrupted the taxi service business model by matching riders with drivers. Airbnb and other online hospitality services have interrupted (i.e., not yet disrupted) the hospitality and tourism business by matching short-term guests with those offering lodging. In both instances, the younger cohorts have rushed to adopt the new digital platforms.
Given the favourable demographics, digital matchmaking in the real estate vertical is likely to grow.
The key to success is not just technology but also service. These platforms will have to be more than a matchmaker. Quality control and responsiveness to customer needs will be the key as the business grows from being a niche to becoming mainstream.