Some real estate agencies are now not only making widespread use of online platforms but also promoting a ‘social’ approach intended to take the customer experience way beyond the actual bricks-and-mortar transaction.
Nowadays a number of traditional professions that have a rather rigid structure and are governed by well-defined approaches are gradually being affected by the changes arising from the digital surge and the use of Big Data. Among these are legal documentation services, law firms and human resources departments in major companies. Meanwhile the real estate business is still extremely opaque and has a reputation for serious information assymetry. This makes it ripe for a switch to digital which could serve to free up new synergies among the various parties involved in the industry.
Refocusing on the client
There are a number of startups offering home-finding services using Big Data technology and complex algorithms which are updated on an ongoing basis. Some have already been working this way for several years, for instance Seattle-based online real estate broker Redfin, on which l’Atelier reported as long ago as 2006. Redfin (an anagram of the word ‘finder’) is on a mission to enhance the relationship between customer and estate agent, providing home-seekers with real estate search software that draws on vast amounts of real-time data. Redfin CEO Glenn Kelman stresses that “it’s about refocusing the entire sector on the customer.” This strategy seems to be paying off, as in 2013 Redfin’s turnover is forecast to come in not far short of $100 million. The market has changed since 2006, with more widespread use of technology tools, especially those underpinned by the social networks and Big Data analysis. However, Redfin’s approach is quite distinct from the majority of competing platforms as it combines online real estate search with offline selling and renting services. Once a client has searched online and found a house or apartment to his/her liking, Redfin can then also provide the services of one of its own real estate brokers to take the transaction through to completion.
Complete digitization up and down the value chain
However, there is a trend towards broadening the range of services through online platform development. In this vein, New York startup Urban Compass, which has already raised more than $25 million in a funding deal that potentially values the company at over $150 million, is an online broker that has digitized the various services offered by real estate companies. Customers can schedule meetings with real estate agents online and the site will relay them to its ‘neighborhood specialists’ using a mobile app with a wide range of functionality. Urban Compass is preparing to launch in San Francisco by the end of the year and will thus be offering an alternative to online service providers such as Craigslist – which has a reputation for occasionally posting scam or hoax ads – and thus helping to bring greater certainty to the fledgling online real estate market. The New York company is planning to go beyond a simple home-search service, with a long-term aim of offering customers a comprehensive experience and maintaining the relationship after the purchase or rental transaction has been concluded. This will involve working with magazine publisher Condé Nast and also gradually building up an affiliated network of local businesses, so as to offer real-estate clients extra services once they have moved in. Founder Ori Allon explains that his company is now “concentrating on the post-market, i.e. on how we can help ensure a smooth house-move and then assist our customers beyond the real estate transaction.” Urban Compass intends to create a digital hub bringing on board local businesses – restaurants, furniture stores, Internet operators and potential clients – with a view to revitalizing the life of the neighborhood. In contrast, otherstartups are looking to go up the value chain and create online communities upstream of new real estate construction projects. One of these is New York-based Honest Buildings, dubbed ‘the LinkedIn of real estate’, whose plan is to bring owners, property developers, architects and engineers together so as to streamline new project implementation and facilitate personnel recruitment.