My Perspective on Proptech

My Perspective on Proptech

By Allan Dalton

There exists an undeclared war being waged between real estate high touch and real estate high tech, or proptech. To the investors who are pouring billions of dollars into proptech companies, high touch may very well become the casualty of this epic battle. To simply assert that there is not a battle, as high tech and high touch will and must, operate in concert to this author, is naive. The question isn’t whether these two phenomena, continue to mesh, but rather what will be the proportional significance of each to both consumers and real estate professionals.

Behaviorists perpetually conjecture over the proportional importance surrounding both heredity and environment. Although the influence either heredity and environment are somewhat immutable, this may not be the case for how the ultimate balance is struck between high tech and high touch value. Especially within a specific real estate related context. I believe that real estate professionals would be well advised to carefully monitor the equilibrium being established between high tech and high touch, and its trajectory. Tipping the scales towards high tech, in my view, beyond the unprecedented investments being made into the proptech sector, are the unresolved challenges that our transaction-to-transaction real estate industry faces, for which the industry may not be prepared.

“The ultimate question is, what should be the proper balance, from a real estate perspective, between high tech and high touch?”

The ultimate question is, what should be the proper balance, from a real estate perspective, between high tech and high touch? To answer that question, one must resolve how much do real estate consumers truly value the human skills, human engagement, and the prospect of their lifelong relationship with their real estate agent.

“The question isn’t whether these two phenomena, continue to mesh, but rather what will be the proportional significance of each to both consumers and real estate professionals.”

Moreover, how resonant, and how valued are real estate trusted advisors, when juxtaposed with the allure of antiseptic, algorithmic and AI results. Those algorithms supported by artificial intelligence will further fuel information technology systems. Systems, that will propel proptech in the form of I Buyer programs, 3D virtual tours, community mapping, predictive data, drone utilization, deeper property historical data, recommended negotiating strategies, high tech appraisals, paperless transactions, and a host of other high informational technological innovations. Unquestionably, the ever-increasing range of examples where machine and deep learning-based AI becomes more popularized and consumer demanded, will only grow, especially in a postcovid hybrid lifestyle environment.

I may not be right, but I am convinced, that one of the reasons that explains the industry’s lack of a greater strategic plan to influence the aforementioned balance between high tech and high touch, has to do with the definition of the “potential” disrupter. That would be, the words artificial intelligence. After all, considering that the most common synonyms for the word artificial are false, contrived, inferior and pretend, how much of a threat could “artificial” intelligence ever be to the human relational intelligence of a real estate professional? With a name like artificial intelligence, why would the real estate industry ever be fearful of their future value?…..thus bring it on! LOL.

Perhaps if the reference of this partial disrupter to real estate related human intelligence was differently named, then the industry would be more prepared. How about superior intelligence, less expensive intelligence, more trustworthy intelligence, or real estate value disruptive intelligence, versus the benign and cryptic AI characterization, then the real estate industry would become better prepared. I realize that nothing I think or write could ever remotely slowdown the ever-emerging use of technology across the entire residential, commercial, property management, and real estate investor landscape.

“...the industry’s lack of a greater strategic plan to influence the aforementioned balance between high tech and high touch, has to do with the definition of the “potential” disrupter.”

No one in real estate or the world in general, for that matter, possesses a finger large enough to plug the hole in any dike that seeks to slow down the inevitability of emerging technology, especially information technology, or proptech, which delivers greater levels of convenience, data security, predictive data and transparency surrounding transactions and lifestyle related data and information. All of which leads to a more empowered consumer.

Accordingly, the only area which I believe anyone in real estate, or any professional field can impact will be on the integration of property tech with professional skill and value. In order to achieve the proper counterbalancing required to countervail the massive disproportionate value of machine technology/intelligence over human intelligence in years to come, will require more than merely blending the objectivity of AI or 2001 Hal with the subjectivity of agent Al. The proper balance must begin by first resolving the real estate industry’s collectivized inability to better socialize and promulgate its full and contextualized human value within the real estate spectrum.

To that end, not that I consider myself a futurist, here are my six suggestions on how the industry might better combine proptech with high touch, and artificial intelligence with human intelligence.

1. Value must exceed image.

The refrain that “image is everything” will not preemptively inoculate the real estate industry at large from a high-tech imbalance. Clearly, the real estate industry is prodigiously photoshopped, resplendently dressed, invented personal promotion, has been writing its own reviews for fifty years (all positive), and real estate parking lots are brimming with BMWs and a litany of other luxury sedans. When it comes to value, there will be a challenge from proptech as many consumers already perceive a real estate transaction as a fee inflated event which they must subsidize in order to promulgate and inefficiently run industry. The real estate industry, although fees are all negotiable, is vulnerable to the diminution of fees in general if consumers expect transactional and machine-driven efficiencies to drive down their costs and how they individually believe agent value.

2. Seek Engine Optimization Must Complement Search Engine Optimization.

The reason I coined the term “seek engine optimization” which to me describes proptech platforms like Adwerx and Chalk Digital, is because almost all search related technology leads to lead gen, and what I refer to as the payment of real estate tariffs. To the contrary, technology that inserts real estate professionals in a proactive hyper-local and strategic fashion, advances greater value and stimulates relationships before, during, and after real estate transactions.

3. Evolving from Serving to Representing Communities.

These two different terms should speak for themselves, and I will leave to the reader how to comprehensively accomplish this, as our research and development and marketing teams are doing just that for our networks.

4. Converting Data Bases to Client Bases.

I could possess the largest data base in all of real estate by purchasing the voter registration lists for both political parties, and in so doing, I could walk through the national convention as proud as a peacock, but with a data base alone, in five years I could end up as a feather duster. Like all of my concepts, our developmental teams, under the leadership of Christy Budnick, our CEO, is working on developing this proptech enabled program for our network.

5. The Market Does Not Determine What Homes Sell For.

If much of the industry continues to be educated, or catastrophically coached, that the market or the buyer unilaterally determines what a home sells for, then the single greatest value that a real estate professional represents to the public, will remain categorically truncated. Such self-imposed value minimization will leave the industry even more vulnerable to the ever-ascending role of information technology. Technology that will guarantee greater transactional and facilitative efficiency. The real estate industry must evolve to the collective understanding that the market or the buyer only influences the price for which a home sells and does not unilaterally determine this result. Borrowing the description of how the commodity or stock market functions, not only accounts for these professionals monumentally lower fees, but also suppresses what Christy Budnick refers to as real estate’s most “invaluable” skills… marketing, networking, staging, merchandising, negotiating, and managing human relationships.

6. We Must Do More to Embrace Diversity, Inclusion, and Equity.

To quote the past President of NAHREP, and the Sr Vice President of Diversity, Inclusion, and Equity, for both Home Services of America and Berkshire Hathaway Home Service, Teresa Palacios Smith, “How can our industry define itself as high touch or relational, unless this also means reaching out and including all people?” I agree with Teresa as ironically, not only will proptech instantaneously provide consumers with more advanced data and information 24/7, enjoying in a sense, a relational advantage over humans, but also artificial intelligence, given its objective purity, does not subjectively discriminate or stratify people through unconscious bias. In other words, as inhumanity must be removed from humans, inhumanity must be removed from human intelligence.

While there is not one, or even six, measures that will completely countervail the potential of information technology reducing the perceived value, or even partially replacing real estate professionals, at the very least, these are some of the measures which I respectfully recommend. Again, I suggest, there is nothing artificial about artificial intelligence. It is as real as real estate itself and proptech must complement and be used in conjunction with high touch for the benefit of consumers, clients, and real estate professionals.

Allan Dalton Sr, VP Research and Development HomeServices of America & Berkshire Hathaway HomeServices