Disruptions ahead
The chair of the Houston Association of Realtors calls for embracing change.
The process of buying or selling a home in Houston hasn’t changed much over the years. But new business models using data and analytics to streamline real estate transactions are poised to challenge the status quo. Kenya Burrell-VanWormer, 2018 chair of the 37,000-member Houston Association of Realtors, recently attended a leading industry conference in San Francisco where one of the key themes was disruption in the real estate sector.
She returned with an important takeaway for those who work in the business: The future is uncertain, but change is here. Embrace it.
Burrell-VanWormer spoke with Chronicle real estate reporter Nancy Sarnoff about what she learned at the conference and how it stands to influence the Houston market.
Q: You’re just back from Inman Connect. What was your biggest take away from the conference? What are you still thinking about now?
A: The most important aspect of Inman to me is really being able to see industry leaders, friends and meet new people that are going to have an effect on the industry. But from an educational standpoint, it was a better understanding of the disruptors that are out there. (Founder Brad Inman) had a very candid conversation with Robert Reffkin, the CEO of Compass, about their plans for the future. One thing they unveiled was a new sign. It doesn’t sound like much, but it’s a new way of using technology to help promote a property. Gary Keller was interviewed about the impact technology is having with Keller Williams, which now is now considering themselves more of a technology company than a real estate company.
Q: San Francisco is pretty much the tech center of the universe. So of course you’re going to hear all about these “disruptors” who are using data and artificial intelligence to change real estate business models. But where does Houston fall in that spectrum? Are we on the leading edge, have we fallen behind or are we somewhere in the middle?
A: I think we’re embracing the change. A good example is we have new members of the Houston Association of Realtors, including Opendoor and Compass. These new business models that have a national presence will be local soon and are going to have an impact on our real estate market. It’s uncertain right now exactly what type of impact they will have, but they are starting to gain traction.
Q: Can you sum up what these new companies do?
A: Compass has positioned themselves as being a technology company that works within the real estate industry. They’re really refining the way data is used to help empower agents to be more successful, and refining their business model to be technology driven and to use AI to help drive their business. And they’re really attracting top talent in most major markets with financial incentives and their technology.
Q: I was recently at the National Association of Real Estate Editors conference, and I learned about a real estate company that allows you to download a picture of a house you like and it will give you a bunch of houses for sale in your market with those same features. Are these types of companies here to stay?
A: He who has the data has the gold. I think that’s really going to differentiate practitioners going forward. Yes, you still you still need to perform the regular functions of a practitioner, but it’s all about data right now, and what you do with that data, and who owns the data. Now Opendoor has a different business model. They want to help streamline the home selling process. In a traditional transaction you have listing agreement, a sign out in front, open houses that help drive traffic to your home. Opendoor will buy your home in three days. From start to finish it’s a three-day transaction. They have different algorithms to identify what home would be compatible for an Opendoor purchase.
Q: How are agents in Houston reacting to these new companies entering the market?
A: I think with anything different or new there is an innate fear that people have. The unknown. It’s just human nature. But if you meet with them and understand what their business model is there is cooperation with other agents. It’s not keeping an agent out of a transaction. They actually are very agent friendly. I think it’s a matter of understanding who you’re working with. It’s like with anything else: if you don’t know, then find out about it. I think where we create issues for ourselves is wanting to keep people out. With innovation you’ve got to embrace it. Embrace change, embrace the technology. That’s our approach.