Residential real estate each year becomes a more technology driven business. But should it? As tech solutions proliferate, and a new generation of buyers depends on them more and more, our homes can begin to feel more and more like pure investments. What are the comparable sales? What is the median time on market? Price per room? Price per square foot?
Don’t get me wrong; I am a big believer in data and analysis. Correctly deployed, they form an appropriate background against which to make decisions. But that’s what they are: background. Allowing them into the foreground of the decision making process exposes buyers and sellers to two significant drawbacks. One relates to accuracy, the other to instinct.
To a hammer, everything looks like a nail. To a tech geek, every problem has a technology solution. But we other humans know otherwise. We know travel agents are coming back. We know there is still a place for independent bookstores. And hopefully we know when to leave our iPhones in the other room and actually look someone in the eye and talk to them. Nothing substitutes for what you learn from another person’s tone of voice, another person’s eyes. And nothing replaces the excitement you feel when you enter a home which sings to you. Usually you hear the song from the first moment you walk through the door. The online photos and the video tour, helpful though they are, don’t pack the same wallop.
At a recent tech real estate conference I met a guy who was trying to sell online offer preparation software to me. I told him it was hard to imagine a product in which I felt less interested. To me the idea that negotiation should be handled via a software product seems absolutely absurd. As a buyer’s or seller’s agent, do I really want to give up all the nuanced skills I have developed over nearly 40 years in this business and let a robot make my client’s offers? And is that what THEY want? (I mean the clients, not the robots. Who knows what THEY want!)
And so back to the two issues I raised above: accuracy and instinct. Data accuracy is not a question of data integrity; most of the data used to evaluate our marketplace is accurate. The problem is that it is not timely. In our market few deals close less than 60 to 90 days after contract; with new developments that can stretch to several years. So the data we are analyzing almost always reflects a market which is months or even years out of date. While this can be useful in predicting trends, these algorithms cannot provide a real understanding of the market NOW. The data needs to be interpreted for that. And this kind of interpretation remains in my experience something which people need to do.
In the residential business, nothing plays a more significant role than instinct. The property which appears perfect in the e-brochure can feel all wrong when we walk in the door. Conversely, the one we fall in love with may have tragic flaws we don’t immediately perceive.
Brokerage may actually be the oldest profession. Since barter began, people have understood that a knowledgeable advisor/go-between increased the chances of success. Today, thousands of years later, that fact hasn’t changed.