In my last post on Realtors and technology, I discussed the idea of being client-centric, leveraging technology to provide better service for your clients, or equal quality service while being better to yourself (interesting concept, huh?). 

As I have been extolling these views recently, it has turned into a greater discussion of how the practice of real estate is changing as a result of new technologies, and how the role of the Realtor is evolving as a result. 

As I have mentioned before, Realtors used to control access to information about listings, neighborhoods, etc., so you had to go through one to find out what was for sale in a given area, etc. Then listings were put online, and pundits suggested that Realtors would be marginalized, since people could find listings online. The introduction of single-property websites, virtual and video tours and the entry of content giants like Yahoo and Google into the listing search world would seem to sound the death knell for the local real estate agent. 

Not so fast . . . Actually, what we are seeing is that non-core functions that a real estate agent performs are being leveraged using technology, so that the agent can focus more on the real value that he or she brings, namely risk mitigation and market knowledge. 

Any consumer has access to virtually the same MLS data that I do, whether she is looking at listings through the search tools on my website, Movoto, Google Real Estate or MLSlistings. The major differences are that I can see showing information, and the commission fee being paid by the listing brokerage.  

My clients who are looking for a house to buy are able to set up and edit their own searches, view virtual tours, calculate commute distances, research schools and many other things using tools on my website from the comfort of their own homes, while wearing their jammies. They find this actually very valuable, so that we only actually go look at a small number of houses, and tend to make an offer on one of those few. This is an efficient use of their time, and mine too. The value that I provide is not access to listings, but managing the discovery process, looking for potential problems, providing pricing recommendations, and risk mitigation. 

As my broker reminded me recently, Realtors are licensed by the California Department of Real Estate to practice law in a narrowly defined area, namely the transaction of real estate. With this comes a fiduciary responsibility to look after our clients’ interests, and mitigate risk for them. Being able to leverage technology to deliver services that aren’t complementary to this responsibility enables Realtors to provide better services to our clients. 

The sales contract used in Silicon Valley is constantly evolving, and it requires a great deal of study to keep up with changes, understand the nuances and ramifications of those changes, and then provide appropriate guidance, advice and counsel to our clients on what those changes mean to their particular situation. 

At the Keller Williams office in Palo Alto, we regularly have to counter offers made on listings in our office, because the contract that the offer was written on is an out-of-date version, and the language and meaning of the contract change with new revisions. Some agents buy a packet of paper contracts and then use that version until they run out, then order updated ones. Again, technology is our ally here because the online contracts are always the most current. 

So, the practice of real estate is evolving, and as prices increase, the number of lawsuits increase and the stakes become higher, look at the qualifications of the agent that you are talking to. Does he or she have a business or legal background? What does he do to stay current with new changes to real estate law and risk management issues? Does she do her continuing education classes on a bus trip to the wine country (a lot do!), or in classroom environments where she may actually learn something? 

In Palo Alto, where the median home price is over $2 million, we are talking about a lot of money, plus the emotions associated with someone’s home. In the most litigious state of the most litigious country in the world, do you want to risk your investment with someone who sends you a monthly recipe card, or someone who can provide you with good counsel and can act to limit your exposure in a business transaction? 

I know where I’ll put my money. 

Thanks for reading.

Tags: Real estate
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