Why Technology Won’t Replace Human Touch

In the residential market, more—not less—people are using brokers to buy a home, despite online tools. In fact, more buyers are looking online and following up with expert advice from a broker. The trend is a good sign for the commercial market that technology won’t replace the human touch of the real estate industry. Technology, instead, is becoming a part of the process along with human brokerage.

Technology doesn’t need to replace real estate agents because they eat each other,” George Mantor, a real estate expert, tells GlobeSt.com. “So far, most attempts to corral any significant market share seem to focus on capturing buyers and have attempted to derive a revenue stream based on matching buyers with houses or selling the leads to the agents they intend to replace. Any real estate practitioner earning six figures or more understands that focusing on listing referrals and not competing for buyers is the road to earning a decent living.”

While technology doesn’t seem to be replacing brokerage, there are more and more investors adopting technology tools that aid in decision making. : Many investors believe that technology can somehow capture significant market share in a business where failure is far more common than success. Are they right? Are real estate agents about to go the way of the buggy whip maker?,” asks Mantor. “Wall Street sure seems to think so and has invested heavily in real estate start-ups intending to replace traditional models.”

One reason why technology won’t replace brokers: the over saturation of real estate licenses, according to Mantor. “What technologies would allow non-real estate firms to capture a significant listing base considering the saturation of licensees is unclear,” he says. “The technology tools needed to build a portfolio of salable listings are relatively low-tech. A simple contact-management software program, email and a smartphone are all that is needed. The opportunity to obtain a listing is the real obstacle. Almost every marketplace has but a handful of agents obtaining most of the listings based on longevity and reputation.”

Instead, technology has become a tool that accompanies brokerage, leading to more informed decisions. “According to a consumer study of homebuyers and sellers conducted by Herbert Research, they often take up to four years ‘collecting experiences’ related to their current home, and potential future needs,” says Mantor. This has already become the norm in the residential market. “Buyers spent 16.7 months, on average, to research and buy their next home, but first-time buyers spent a whopping 20.5 months,” adds Mantor.” First-time buyers take longer to mature than the average agent will be in business.”