Indian Real Estate, real estate portals and the real estate agent of the 21st century

real estate agent? Hasn’t the internet got rid of them yet?

I hear this question all the time. Most people assume that real estate portals in India are working to weed out agents and facilitate direct interaction between seller and buyer. Although this is partially correct, real estate agents are the main clients of these portals and the portals are doing their bit to facilitate their growth. We interact with agents every day and see that most of them are doing good business. I want to take some time and explain the dynamics behind Indian real estate, the role that agents play, and how the role of agents is going to change in the future.

Note – Throughout this article, I have focused only on the rental and resale market and have not gone into the sale of new properties by builders, as the dynamics of that market are radically different. Also, the scope of this article is limited to Indian real estate.

“MakeMyTrip has eliminated travel agents. So why hasn’t the same happened with real estate agents?”

You need to understand that ticketing is now a point-and-click industry: travel agents have been replaced by computers. The process of obtaining travel information AND purchasing tickets can be done online. Real estate is fundamentally an offline process. Although information aggregation is an important part, site visits, negotiations and paperwork must be done offline. Even from the perspective of the owner/seller, renting/selling a house is not as simple as posting it online: the process can take months. This is where real estate agents come in: guiding clients through the offline part of the transaction, getting both parties to agree to the terms, and finalizing the paperwork.

Why don’t real estate portals try to eliminate agents and become virtual intermediaries?

A real estate portal provides a platform for a seller and a buyer to interact (a seller can be an owner, builder or agent). If we remove agents from this equation, portals are left with a C2C platform where owners are the sole source of inventory. Although many prefer a scenario like this, we need to figure out how the platform provider is going to monetize this setup. They have the following options –

List of commissions – They may charge a fee to the owner/seller to list their property. Few owners are willing to pay for premium listings (last I checked, around 5% of owners posting online were willing to pay), but this simply isn’t enough to keep them in business. Indian consumers are ready to use a service that is free (free listings) OR pay for a service once it is provided (brokerage), but they don’t agree to anything in between.

Charge property searchers for landlord information – Another option would be to charge property searchers a fee to provide them with information about the listed owner. This is also not a sustainable option because owners who list online tend to list on multiple portals and you can always find a portal that gives you the owners information for free.

Brokerage commission when the deal closes – This would be an excellent monetization scheme that everyone would be willing to pay for, but it is very difficult to implement. To do this, portals must keep track of every deal that is closed offline and that would be next to impossible.

There may be more options, but I don’t really see them becoming big ‘income machines’. Running a real estate portal is a VERY expensive affair and portals would need a solid revenue stream to offset that cost.

This is where real estate agents come in: Agents are willing to spend a good amount of money to market their properties on a platform that would bring them good leads. Real estate portals see this as a constant and sustainable income stream. This, apparently, is a match made in heaven.

So, are you saying that real estate portals have not been successful in the brokerage industry?

They certainly have. Big time! With many owners posting their properties online, agents are starting to feel the pressure. Coupled with the fact that the number of real estate agents has nearly tripled in the last few years, you’ll see that the average real estate agent made MUCH less in 2014 than they did in 2011. Agents are beginning to realize that there is a paradigm shift and it’s time to make amends, before the game is taken out of their hands. There has to be a change in your mindset and it has to happen NOW.

Role of the 21st century real estate agent

10 years ago, agents were practically charging money for information arbitrage: “I have the landlord/tenant contact information and you have to pay me money to get this contact” was the mantra and it has worked. A disproportionate amount of money was charged for this seemingly simple service and the world continued to go unscrupulous mainly because there was no alternative. But now there is. Increase in owner listings on portals, multiple increase in the number of real estate agents, internal portals in corporate companies that help employees find accommodation, Facebook groups, etc. They have all impacted the brokerage industry and there needs to be a review.

“What is dangerous is not evolving, not inventing and not continuously improving the customer experience”: all real estate agents in the country must understand these words said by Jeff Bezos, CEO of Amazon. Information arbitrage can no longer be the real estate agent’s game – we are moving into a world where access to information is becoming easier and this can no longer be the USP of why a property finder turns to to a real estate agent. I believe agents should adopt the following practices:

Save time for your clients: In today’s world, nobody has time to do things (even if they have time, people don’t want to spend their time looking for a house). Saving time for your clients is probably the best added value an agent can provide. Be updated on the latest inventory that is available in the locality. If you are not sure if the client will like your property, tell them! Don’t drag them into a dingy apartment where they will never, ever be interested; they will lose confidence in your sense of judgment and will never come back to you. Learn to really understand what your customer wants, be equipped to find the most relevant inventory, walk with them through site visits, and close the deal. A really good agent should be able to close a rental requirement in 7 days and a resale requirement in 1 month, tops.

Provide as much information as possible: Instead of hoarding information, agents should freely dispose of it. Tell your clients exactly what apartment society the property is in, tell them exactly how far it is from the bus stop, and tell them if the landlord/tenant doesn’t feel comfortable with someone in their demographic. In the long run, this helps build a better relationship with customers. Sure, other agents (or your own clients) can contact the owner/seller without you, but in the long run, this is what will work.

Embrace technology, don’t fight it: Aside from Whatsapp, agents don’t use their smartphones for any business. Why is this so? For starters, there are plenty of CRM apps in the app store that you can use. This alone will improve your productivity 100 times! Other applications for inventory maintenance, marketing, etc. they are available but are not being consumed by agents.

Develop skills that a computer/technology can’t do: a computer can never negotiate a good deal for the customer; that’s a job that requires a human touch. A computer can never have an idea of ​​what the customer really wants: agents can since it is always with the customer. This is a relationship-driven industry, make sure you always remember that.

Use social media as a marketing platform – When owners use Facebook as a marketing platform, why shouldn’t agents? Creating a Facebook group to market your listings is a great way to reach new customers. There are some agents that already do this and are getting a good response from it.

Be professional: As cliche as it sounds, getting back to basics is something every agent should do. Being punctual, dressing smartly, and speaking politely to customers are some key skills agents should practice. Again, there are agents who have good manners, but the number seems to be decreasing.

The list can go on and on, but I can summarize it this way: If you’re a real estate agent, think about what you were doing for your business 5 years ago and compare that to what you’re doing today. If nothing much has changed, understand that he will be laid off in the next few years. The world is changing and only those who change with it will live to fight another day. Portals have evolved, house hunting has changed for end customers, and it’s about time the role of the real estate agent changed as well.

How are we positioned in this complicated market?

Our vision has always been to build a technology-driven real estate agency that works to help our clients find a home they truly love. We do this by combining state-of-the-art technology and experienced brokerage. We are adding great real estate agents to our team, providing them with next generation mobile apps/desktop products to better run their business, helping them understand the market as it is today, providing training sessions and learning material, and finally helping them serve better customers. Given the amazing response we’ve received from customers and agents so far, we’re confident in the way forward.