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Proptech will not replace practitioners

MAIN IMAGE: Schalk van der Merwe of WeconnectU; Wayne Berger of iShack; Co-CEOs and Co-Founders of Flow Living, Daniel Levy and Gil Sperling

Danie Keet

Technology is here to stay with the real estate industry no exception. As people tackle the fourth industrial revolution, technical assistance in most spheres of life has become a reality and everyday activity. Activities such as automation and digital processes, powered by blockchain, artificial intelligence and augmented reality, is the real deal.

It is therefore evident that the real estate industry follows this trend and that it will influence the way property is leased, rented, bought, and occupied.

However, amid this is the question of the influence of proptech applications on the real estate industry and the income of property practitioners?

The services of an estate agent are invaluable, and they are paid a commission by the seller of the property. Estate agencies take a lot of risk onto themselves, as they invest a lot in marketing but are only paid if the property is sold.

Proptech is the use of technology to develop new ways of doing things in the industry, often increasing efficiency, access, diversity, and impact. Proptech is to property what fintech is to the finance industry.

“While the real estate industry may be a step or two behind the curve when it comes to leveraging the power of data to enhance their services, a few forward-thinking businesses have been championing the movement,” says Schalk van der Merwe of WeconnectU.

Van der Merwe said the discussion around technology within the real estate industry has centred largely around disruption and replacing traditional estate agents with virtual services. This has ruffled a few feathers and the unfortunate side effect is that many real estate professionals have been so caught up their work that they’ve missed the opportunities that data and technology bring.

Because many agents have focused on the transactional side for so long, Van der Merwe says consumers have lost sight of the value they deliver in return for their commission.

“That’s the real reason low-cost, digital real estate platforms have taken off,” he says. “Not because the value of using a real, live, experienced agent isn’t there, but because that value isn’t being communicated in a way that’s visible, efficient or relevant to today’s property owners.”

Wayne Berger of iShack says it is not surprising that people believe technological innovation goes hand in hand with disruption and disintermediation in an industry.

“However, the real estate brokering sector has proven resilient to such disruption. You only have to observe the colossal failure of US based Zillows iBuyer unit to understand that most real estate consumers looking to buy, or rent prefer to have an agent hold their hand and guide them through the process.

“As a real estate agent, rather than feeling anxiety when hearing about proptech and hiding these feelings under the carpet, embrace PropTech and Proptech providers and find the right solutions for your business and benefit from the efficiencies and opportunities that Proptech can provide.

“We believe in enrichment rather than disruption. We use our expert software engineering and data resources to enhance the working life of brokers and agents by alleviating timely administration and industry inefficiencies, while increasing their deal flow and bottom-line,” he stated.

Having been a property practitioner himself before venturing into the tech side of the industry, Van der Merwe is quick to point out that technology alone is not the answer. It is the supporting player in a game that remains very human-centric.

“People aren’t designed for isolation, and they need the experience, adaptability, and human insight of a genuine professional now more than ever. Technology has played a vital role in enabling business to keep running at a safe social distance, but it’s the personal touch that is making all the difference in this new, physically separated world.”

He said the presence of proptech will be beneficial to practitioners embracing these aids and negatively on practitioners and property managers who do not realise the value of  technology. Embracing proptech will allow them to deliver a more efficient and faster service to clients.

Asked if the role of real estate tech companies will take over the role of the backbone of the industry, property practitioners Flow Living, Co-CEOs and Co-Founders Daniel Levy and Gil Sperling said with the rise of proptech options over the last few years, the percentage of properties sold by practitioners has increased.

“We believe that the agent is still needed at the heart of every property transaction. While people are finding properties in new ways, they want a trusted partner to guide them through an emotional, expensive, and complex process,” they said.

They also said the use of proptech will not have an influence on property prices and it is unlikely that this will change, because effectively what commission is, is the cost of doing business with a human – an expert agent who can guide a buyer and seller through the process. What may change is the way commission is split, depending on how the property practitioner chooses to market the property and their brand.

Levy and Sperling said their technology helps agents harness the power of social media advertising and targeting to reach the right people, in the right place, at the right time. As a marketing platform, they are paid fees by agents and agencies, and they help them market themselves and their properties.

Referring to online companies, like Property24, that also holds Private Seller and Private Landlord, Van der Merwe said no more than between 3% – 4% of all listing are private sellers. If it was such a great need from the consumer, that figure would have been above 50%. Private Property, build for the private landlord, is now owned by the industry, and is not solely focussed on private transactions. This is also indicative that most buyers do not solely trust tech for one of the biggest financial transactions that they might undertake in their lifetime and that the human factor is indispensable.

“You still need the human element, aligned with tech, to add real value to the decision the client makes in the end.”

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