I spoke recently about the impact of technology, connectivity and social media on the real estate business at a series of events sponsored by various brokerage companies and industry associations involved in the commercial (non-residential) real estate marketplace. These were very interesting forums because – while there’s obviously a great deal of interest and concern among the key players and a real thirst for knowledge – I also came away with the feeling that the actual appetite for change was tempered in many instances by the idea that change was a good thing as long as the change was something that happened to somebody else.
A consistent inquiry in all of the Q & A sessions that followed my comments was how I expected the new technologies to alter the traditional and highly-personalized ways in which this type of business had been conducted for decades. You may think that the real estate business is all about “location, location, and location”, but - in the final analysis - it’s actually about continued confidence in the people you rely upon and longtime trusted relationships. And the one thing that we know for certain these days about trust and relationships is that the rise of social media and the constant presence of cell phones has been brutally difficult on both. It’s really hard to hide in plain sight.
In my responses, I spoke about a variety of developing trends and oncoming changes including the need for a new type of employee – a digital native if you will - with the requisite attitudes and skill sets to be able to successfully function in an industry which was in the process of rapidly moving from a relationship-based world of intentional opacity to a bright, new and deeply democratized world of improved information, high degrees of visibility and data-driven decision-making.
I went on to say that this wasn’t a thing about the age of the new players – it was about their willingness to adopt the emerging technologies and the newly-available tools and it didn’t really matter whether the “newbies” were book smart or street smart as long as they understood how they would need to operate in the new digital world dictated by the twin agents of ubiquitous mobility and pervasive connectivity where every participant in any transaction had ready access to timely and relevant data.
But – in the overall flood of interesting and occasionally fearful questions – there was a single question – asked without the slightest hesitation or apparent discomfort – which really stood out from all of the rest. The truth is that what this long-time broker asked me was much more of an amazing admission by him rather than a question for me which is why I found it to be so interesting. I think it’s also why so many others in the audience – brokers, builders, owners, lessors and lawyers – squirmed just a little bit and found the conversation to be somewhat uncomfortably close to home.
His question was short: My entire livelihood depends on the inefficiencies in the real estate market and ill-informed clients. How does my future look?
My first reaction was to think back to the early days of the computer business. We used to say that the primary difference between a used car salesman and a computer salesman was that at least the car dealer knew he was lying to you. Here was a broker saying that his success basically depended on the relative ignorance and lack of market knowledge of his clients.
Then I thought of that economist clown (and MIT professor) who was quoted as saying that the Affordable Care Act was purposely drafted by the Obama team with intentionally confusing language that was carefully designed to take advantage of “the stupidity of the American voter”. Another arrogant academic moron who obviously feels far superior to the mere mortals who pay his salary. You really have to wonder how exactly these people live with themselves? But I digress.
In any case, I told the broker who asked that question that he was screwed. I didn’t add: “as well you should be”, but that wasn’t really lost on anyone in the crowd. And please understand that this isn’t especially about integrity in many cases. I think it’s just a human condition in too many people who think that - as long as “good enough” is sufficient - they don’t have to invest the time, energy and hard work that it takes to do the best possible job for their clients. They’re willing to settle for doing just the kind of job that gets them through the day - especially because they believe that the clients don’t know any better. But, from today on, the game’s really changing because the clients will know a lot better and insist on a lot more. And that’s what’s so exciting (and so scary and threatening) to so many.
In the brave new world, asymmetrical information-based relationships will be a thing of the past and a fair assumption will be that everyone who cares will know anything that matters and that they should. Two words say it all: transparency and efficacy. The smart players today (buyers, sellers, clients and consumers) want to know as much as they can about every aspect of the conversations/transactions that impact them and they’re going to increasingly insist on direct and immediate access to all of the relevant data. And then, when the data dust settles, they’re going to make their choices, selections and decisions based on real metrics, real visibility and real bottom line results.
The players who prevail going forward won’t be masters of the shell games, bait and switches, and other tricks of the trade that used to be the way things were done – they’ll be the ones who are upfront, out front and leading the charge to the future where the best economic deals for the clients will prevail and where the chips will fall where they should – not because of ignorance and a lack of good information, but because of diligence, dedication and a lot of hard work.
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