Technology and computers replacing humans is a popular discussion. Let's take a look at the effects of automation and blockchain technology on real estate brokers in California.
How will real estate brokers survive in California?
Realtors in California and around the world have been fighting extinction for some time. Small, independent brokerage firms are disappearing, while larger firms are buying them out. Those firms that still survive must deal with the changes that technology brings.
Brokers are finding ways to cope with the technology arms race. Tom Tognoli, recognized as one of the 100 most powerful people in real estate by the Swanepoel POWER 200, co-founded Intero in 2002. The Silicon Valley-based company's innovative business model has helped it become one of the nation's leading real estate companies. In 2014, Intero was acquired by HomeServices of America, a subsidiary of Berkshire Hathaway, the second largest independent real estate brokerage in America. Tom Tognoli leads Intero as president and CEO. He said, "What we try to do at Intero is keep up with the latest and greatest technology and then pilot in one of our most tech-savvy offices."
It seems that not all brokers are afraid of adopting new technologies; in fact, some recognize the benefits. According to an interview with Carol Lansen and Dennis Byron of Montalvo Realty, "There is definitely a learning curve with new technologies. They are constantly changing and evolving. Some agents may have the mentality of 'don't fix it if it's not broken'; however, there can be valuable benefits."
In addition to residential real estate, automation is affecting commercial real estate. Robert G. Thornburgh, regional president of Kidder Mathews in Southern California, said, "The discussion around technology is becoming a common theme, fueling growth and delivering better results. It accelerates the speed of our business and, in the process, creates a variety of new services."
Progressive real estate representatives recognize that with the addition of automation and blockchain, roles and tasks will change. However, they also recognize that the real estate transaction process will become more efficient and transparent.
Bringing blockchain into the mainstream
There are already real estate companies using blockchain. Platforms such as Propy use the complex algorithms of blockchain in a user-friendly interface for agents, buyers and sellers. Kelvin Kam, founder and chief broker of Sequoia Real Estate, shared his positive view of the use of this emerging technology, stating, "While blockchain is known to be a very complex algorithm, the user-friendly interface of Propy's transaction platform made me forget about the complexity."
Like Kelvin, the new generation of brokers and agents admire the simplicity that new technology brings to the real estate market. Buying a property becomes easy and efficient. All parties, including the buyer, seller, buyer's agent, seller's agent and title company, can exchange communications in one place. Once the transaction is complete, the buyer receives the title, which has a blockchain address on it - a hash that is stored immutably on the blockchain. Whatever happens in the future with municipality databases, the title on the blockchain is an immutable proof of ownership.
Automated smart contracts
The use of automated smart contracts reduces the work of intermediaries in the real estate transaction process. You might think this is bad news for real estate agents, but there is actually a new opportunity for real estate agents. "Crypto Certified Agents" is the new buzzword in San Francisco. The new program educates agents and brokerages, and it gives them more opportunities to compete with the big commercial real estate firms.
Clearly, there are ways for agents to adapt to new technologies that disrupt their role. In his article, Steve Murray, president of REAL trends, notes, "We're still disrupted, and it's not going to stop this year, or in 10 years, or in 20 years."
Let's face it. Technological advances in the modern world are inevitable. So, to adapt as a real estate professional, you'll need to align yourself with the new needs.