If you’ve recently held off from buying or selling a home because you were dreading the complexities, lack of resources, and myriad inconveniences typically associated with the experience, now might be your time. By most consumer standards, the industry has become far more consumer-centric in the past few years.
Why this sudden pivot? Why, only now, is the industry turning its back on the opaque fees, gatekept resources, and disadvantageous consumer practices that sustained it for so long? As you’ll discover below, a confluence of factors is at play, including innovative technology, generational trends, laws and global events.
Here’s why the real estate industry is – at long last – becoming consumer-centric.
Tech Innovations Spurring the New Approach
Technology is perhaps the most significant factor in the industry’s shift toward consumer-centricity. Recent technological advancements, and the creative ways innovators use them, have added convenience, transparency and accountability to the real estate experience.
Look at Nobul – an innovative tech company helmed by Regan McGee – currently disrupting the industry by addressing the unfair dynamic between real estate agents and consumers.
Before, consumers had no way of discerning an agent’s sales history, past client opinions or even commission fees. The information was hidden. Nobul leveraged a cutting-edge AI algorithm to reverse that inequity, equipping consumers with all the info they needed to find the right agent. On Nobul, a consumer can access verified reviews, sales histories, commission fees and more. Moreover, the consumer is in the driver’s seat; agents compete for consumers’ business through competitive fees and attractive conditions.
Nobul is one of several companies forcing consumer centricity on the industry.
Millennial Consumer Preferences
A key factor precipitating consumer focus is the generational shift in buyers. According to the National Association of Realtors, millennials now comprise the largest demographic segment of homebuyers. And this new majority of consumers is more vocal than past generations about the customer experience.
Millennials prefer their transactions tech-enabled, convenient and fast. This helps explain the burgeoning proptech (property technology) sector focused on digitizing and streamlining the real estate experience. E-signing is now the norm, online listings are ubiquitous, and several fintech alternatives are now offering app-enabled mortgage approvals.
Antitrust Laws
Naturally, antitrust laws have had a notable impact on how the industry deals with consumers. Price fixing laws aim to crack down on agents conspiring to keep fees high. Another antitrust effort aims to eradicate fixed commission splits, a practice wherein listing brokers incentivize cooperating brokers with an attractive commission split. And another law works toward diminishing market allocation – dealers segmenting the market to avoid direct competition. There are several more examples.
These antitrust laws help keep the industry in check, ensuring practitioners work in good faith to serve consumers’ best interests.
The Pandemic’s Effect on Real Estate
Finally, no 2020s article on industry changes is complete without a nod to the COVID-19 pandemic. In real estate’s case, the pandemic occasioned several consumer-centric practices – at least in a roundabout way.
The shift toward remote buying in the pandemic’s early stages gave rise to 3D home tours and virtual walkthroughs, offering consumers an immersive opportunity to compare listings online. And social distancing efforts forced several practitioners to embrace instant messaging to communicate with clients, a consumer-centric improvement over time-consuming in-person relationships.