The Businesstimes reported today that the property agency industry shrank by 6% from last year, and the number of salespersons fell 3% to 28,397. Analysts attribute this to a slow market and tech disruption, as an inevitable wave of change is preparing to shake up an inefficient market.
The Council of Estate Agents (CEA) was started in 2010 to regulate the real estate agency industry, which was rife with notorious and unprofessional middlemen claiming expertise in the property market. While this brought some order and introduced formal punishment for unethical agents, the market was still heavily reliant on them to conduct transactions.
Today, huge advances in computer hardware, and information and communication technology have made information transparent and readily available to consumers. The agent has much less to do, but the commission structure has not reflected that. Hence, it comes as no surprise that the industry is facing such a decline. So what does the future hold for a property agent?
1. Personalised Service
An agent should up his or her game. It's no longer about going for viewings and doing paperwork. Instead, think "premium" - like being a butler, instead of a domestic helper. 24/7 availability, instead of fixed house-viewing timeslots. Custom legal documents over standard templates. Some agents insist to meet their clients directly at the property for viewing. These agents may not last in an increasingly competitive market.
2. In-depth Knowledge and Analytical Skills
An agent should be able to give proper analysis on real estate, and not just through regurgitating figures and statistics. Automated tools available to them are often abused, creating pages after pages of numbers, charts and tables, that are then heaped onto the consumer. The discerning consumer now knows where to get the same statistics. It's time to deliver quality work that would not be out of place on a Bloomberg reporter's desk.
It's still a problem in today's market. Agents have to juggle between many potentially conflicting interests - their client's, the regulatory organisations, fellow agents, their own.... and the list goes on. The practice of co-broking is still well and alive, where agents representing different parties of a transaction share a single commission, for instance from a landlord. This shifts the focus from finding an ideal house for a tenant, to closing the deal as quickly as possible, occasionally limiting the number of houses to choose from, or withholding information that might otherwise compromise a transaction. Consumers these days are savvy enough to contact each other directly and find reliable information, even when they engage an agent - so the mindset of an agent has to move beyond that of hitting KPIs.
Krib offers consumers an alternative to managing real estate transactions, instead of engaging an agent. However, we are heartened that with this trend, consumers only stand to benefit from a more professional and transparent market, and potentially saving a fair bit of money in service fees paid. After all, we all agree that change and progress are the only constants in society and the economy.
This article was first published on the Krib blog. Read more real estate-related articles here!
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Mostly startup and tech stuff. An occasional rant or two. Travel-related articles are published on my other blog.