Technological evolution continues to hurtle forward at breakneck speed across all sectors, driven by consumers’ need for stress-free and intuitive technology that enhances our day-to-day and professional lives. And naturally, it is property, the national obsession, that is the latest industry to take part in this evolution.
In recent years, the work of the estate agent has changed a huge amount. The traditional estate agent’s shop window now extends into the digital world as most property purchases now begin with an internet enquiry, rather than doing the rounds at the high-street estate agencies to see what’s on their books. This is the beginning of a long process, and these days technology is helping the estate agent, and consumers, on every step of the journey.
The rise of Proptech
Just as FinTech, RetailTech, and MarTech have radically altered their respective industries, PropTech is transforming the way the property market operates, offering data points and analytics to help businesses understand their respective markets, drive efficiency, and most importantly, increase sales. It does this in two ways – digital innovation and data.
Digital innovation means that processes which were previously disorderly and cumbersome are now smooth, intuitive, and efficient. This is largely thanks to cloud technology, which makes information accessible everywhere. Some platforms are able to integrate information from various different sources to provide a complete workflow filled with all the information an agent might need. No longer do agents have to switch between applications to find the information they need, wasting time and effort – now, Proptech enables them to have everything at their fingertips.
It means that registrations can be done morning, noon, and night, accelerating the house buying process. It means that agents can call up customer details during a call, enabling them to provide a better service. And it means that across the whole house buying journey, the customer and the agent both have the simplest, easiest experience possible.
But beyond mere functionality, Proptech brings understanding, and it does this through data. Smart platforms which store and analyse data can generate market insights previously inaccessible to those either unwilling or incapable of investing significant hours and manpower.
For example, at Reapit we recently launched a report with property market intelligence company Dataloft which analysed data from over 100,000 properties listed for sale in the UK and found that the volume of properties withdrawn before sale varies quite substantially across the country. We were able to use this data to look more closely at regions, price bands, and even the length of time the property was on the market. This gave agents invaluable insight into regional trends in the property market, helping them adjust their strategies and giving them a platform to improve performance.
Furthermore, as estate agents usually only get paid on completion, and it is accepted that they spend resources on listing properties that they do not sell, data shows us that up to £4 billion is lost annually in missed commission. This data has allowed us to work out the Withdrawal Ratio, a new metric produced by Reapit for the industry which will enable agents to benchmark their performance against the wider market and to test the strength of confidence of buyers and sellers.
Data is generating previously inaccessible insights and is transforming the ways in which estate agents understand the property market.
But digital transformation isn’t always voluntary. As with all technological development, those who act most quickly tend to reap the rewards.
Digital innovation and data are truly transforming both the customer and agent experience. Cloud technology makes information instantly accessible no matter where you are, and increasing the number of online functionalities removes the time constraints and logistical issues faced by consumers and industry alike in the past. And new data capabilities unlock unparalleled and previously unseen insights into the property market, uncovering opportunities to drive additional revenue.
Indeed, it is the new digital estate agent start-ups embracing the bricks to clicks migration that technology brings, that are putting pressure on traditional estate agency models. These new players can provide a similar service but without the need for physical infrastructure or overhead costs, which not only delivers high potential for profit, but also directly challenges traditional agents thanks to quicker, and more convenient services.
Traditional estate agents are forced to adapt in order to keep their place not just in the market, but at its zenith. We are therefore seeing many traditional agents incorporating Proptech into their every-day operations, helping them to improve and develop their offering for consumers. This means that they remain the go-to option for someone looking to either buy or sell a home, as they offer the digital and technological sophistication of the start-ups, but with the property chain management knowledge, experience, and expertise brought by being an established agency.
Continued evolution is even more important when market cycles take uncertain turns. Increasing withdrawals, sluggish house price growth, and declining rental stock can all be indicators of shaky consumer confidence. When coupled with current economic factors and changes in legislation such as the incoming ban on tenant letting fees, market conditions could depress estate agents’ revenues. Now more than ever, efficiencies brought about by Proptech progress is essential if estate agents are to thrive.
Technology is making businesses smarter, more efficient, and better. Those that can embrace technology while still delivering the white glove service that buying or selling a property should come with – and that customers expect – will triumph.
Gary Barker, CEO, Reapit
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