Technology and computers replacing humankind is a popular discussion. Let’s examine the effects of automation and blockchain technology on real estate brokerages in California.
How Will Real Estate Brokerages Survive in California?
Real estate brokerages in California and across the entire world have been fighting off their extinction for quite some time. Small, independent brokerage firms disappear, as larger firms buy them out. Any of the firms that are still surviving must face the changes that technology brings.
Brokers find ways to deal with the tech 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 helped it to become one of the top real estate firms in the country. In 2014, Intero was acquired by Berkshire Hathaway’s affiliate HomeServices of America, the second largest independent real estate brokerage firm in America. Tom Tognoli leads Intero as its President and CEO. He stated, “What we try to do at Intero is keep up to speed on the latest and greatest technology and then pilot in one of our more tech-savvy offices.”
It seems that not all brokers fear the adoption of new technology; in fact, some acknowledge the benefits. According to an interview with Carol Lansen and Dennis Byron from Montalvo Realty, “There is definitely a learning curve with new tech. It’s changing and evolving constantly. Some agents may have a mentality of ‘don’t fix it if it’s not broken’; however, there can be worthwhile advantages.”
In addition to residential real estate, automation affects commercial real estate. Robert G. Thornburgh, regional president of Kidder Mathews in Southern California, stated, “The discussion surrounding technology is becoming a common theme, fueling growth and delivering enhanced results. It’s accelerating the speed of our business and in the process creating a variety of new services.”
Progressive real estate representatives acknowledge that, with the addition of automation and blockchain, roles and duties will change. However, they also recognize that the real estate transaction process will become more efficient and transparent.
Bringing Blockchain to the Mainstream
There are already real estate companies that are using blockchain. Platforms such as Propy utilize the complex algorithms of blockchain in a user-friendly interface for agents, buyers, and sellers. Kelvin Kam, the founder and managing broker of Sequoia Real Estate, shared his positive feedback on the use of the emerging technology, stating, “Though blockchain is known to be a very complex algorithm, the user-friendly interface of Propy’s transaction platform made me forget about the complexity.”
Just like Kelvin, the new generation of brokers and agents admire the simplicity that the new technology brings into the real estate market. Purchasing a property becomes easy and efficient. All parties, including a buyer, a seller, a buyer’s agent, a seller’s agent, and a title company, can exchange communications in one place. Once the transaction is completed, the buyer receives the title deed, which has a blockchain address on it – a hash which is immutably stored on the blockchain. No matter what happens with the municipality’s databases in the future, the title deed on blockchain is immutable proof of one’s ownership.
Automated Smart Contracts
The use of automated smart contracts cuts down on the work of intermediaries in the real estate transaction process. You might think that this is bad news for real estate agents, but there is actually a new opportunity for realtors. “Crypto Certified Agents” is the new buzzword around San Francisco. The new program educates agents and brokerages, and it offers them more opportunities to compete with major commercial real estate firms.
It is clear that there are ways for agents to adapt to new technologies that disrupt their roles. In his article, Steve Murray, president of REAL trends, noted, “We are always being disrupted, and it will not stop this year, nor 10 years from now, nor 20 years from now.”
Let’s face it. Technological advancements in the modern world are inevitable. Thus, to adapt as a real estate professional, one will need to align himself or herself with new needs.