A lady working from home looking up possible home loans.

The Future of Real Estate and How Technology Can Provide Value

Online models on real estate are definitely on the rise today. Without question, they are an inevitable part of the future. While the industry is sure to be technology-driven in about five years or so, agents, brokers, and everyone in real estate should understand one thing. Customers want to get the support they need.

Over the past 5 years, real estate in Perth has slowed down. Indicators, however, are pointing to its quick incline by next year. It is expected that properties on sale will rally as more buyers will take advantage of the perks of purchasing a new house. Investors will soon invest more, and it will be an exciting time for Perth’s real estate for sure.

Technology systems dominate how transactions go, including in the property industry. It is easy to see why, since technology does make everything better, faster, and simpler. But there will always be a need for human touch with their dealings. No one wants to perform the entire business transaction such as buying a home all online.

Online Sales Platforms vs Real Estate Agents

Although online platforms do help achieve and provide service more accessible, there is still a need for “human touch.” Many people are now comfortable with the integration of new systems and tools, but there are still a lot more that technology cannot provide as far as negotiation and skills are concerned. Technology does offer a platform for sellers and buyers to communicate with each other, but there is no conduit. As a result, the price of the property among other things can be profoundly affected.

As a seller, you may think you get the most out of your property sale. Meanwhile, as a buyer, you can get bigger discounts if you are an experienced investor. The reason is that there is simply no in-between party.

A businessman on a laptop facilitating a property deal..
A well-dressed businessman working on a laptop.

Are the Earnings Enough to Keep Real Estate Professionals?

Over the last couple of years, salespeople in real estate had to face new legislation and rules. These changes were supposed to be for the betterment of the industry. But over time, it could lead to a considerable decline in the number of real estate professionals in WA and perhaps in the entire country.

Back in the day, employees worked under a commission-only basis. Most of them did not even have real experience prior to entering the industry. Even today, the case seems to be the same.

A few years ago, there were modifications in the existing laws, including state and federal. They were concerned with the employment of real estate personnel whereby people who get hired should be through a commission-only basis. They should prove that they could earn by facilitating good and favourable property transactions.

Although the legislation was introduced, the policies were not clear enough. It was not surprising that the industry had little change in its entirety. Agents were then employed on a retainer, which means they get a regular income. Any commissions earned would serve to off-set against the retainer’s repayment.

It was risky for real estate agencies because if an agent quit, it meant that the employer did not have any rights over the employee’s retainer if the salesperson still owed some of it. Today, things are quite different.

A complete shakeup was announced in April of 2018, which eradicated the retainer model. There was a 12-month grace period so that agents could prove their capacity to earn the requirement. By April 2019, if they did not make $52,000, they are either employed on a salary basis or terminated.

It is easier for the employer to discern which real estate agent is making the required sales amount. In most cases, it can become financially unviable to keep the worker who cannot meet the amount. No employer wants to top off the difference for an employee who does not care about the job.

So, people who did not have the momentum to carry them through because of poor performance simply die a slow death in the industry. They have to move out of real estate because no one will want to hire them. The industry as a whole is benefiting from these changes, however, especially with part-timers getting squeezed out.

It is frustrating to know that several real estate agents do not treat the profession as their full-time job. They are not willing to spend 40 to 50 hours weekly to provide reliable work for clients and the firm to generate business. Agents are supposed to be self-motivated, but, unfortunately, many are not inclined to be so.

For example, Bob from real estate wants to do two deals a year. Then, there’s no problem. But what skillset is he going to earn and develop if he will only do two deals yearly? He does not practice daily. When you do a lot of transactions, you will make more mistakes because you are doing a lot more. But you only make these mistakes once, and you learn from them and never do them again. You can slowly understand how it all works.

The average is half a dozen deals nationwide per year. If agents do not meet the required sales amount, their skillset is not suitable enough to be demanding for the commissions.

What Happens Next?

The industry can suffer tremendously because real estate agents have less experience and fewer customers to deal with. These agents will not get paid suitably based on their skills and qualifications, which eventually decrease their quality.

Just like with any occupation, pay does matter, but it is never the only determining factor of success. Real estate is a complex industry. You need passion and dedication to stay, along with your innate skills. Agents and other experts should continue to pursue what motivates them, whether it is a sale or excellent customer service.

Using technology to assist in various tasks is just the tip of the iceberg. The true importance lies in the natural abilities of the real estate professional whether you are an agent, broker, consultant, or anything.

In reality, even in the future, the better-skilled property agent will always have a place in the industry. And the top Agent’s will have a firm grasp on what technology best assists the client and themselves and be well practised in it. Perhaps one of the greatest advantages of technology currently is the application of online systems and tools which quickly gather market information and also systems which aid in organisation and efficiency.

To be blunt; just like in and industry there will still be others who will not be worth the commission & failing to bring value to the table. While they may gain entry to the industry, they will not remain.

As a whole, the industry benefits from the emergence of technology and innovation massively. Let us think about it this way: those who are not skilled enough get eliminated as they lose credibility and customers quickly.

Service will always be of great significance because people want that human connection and technology can also be used to amplify evidence of this. 

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