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Where is technology heading?
No one knows for sure, but these experts have a few ideas you won’t want to miss.
Find
out what the experts say about:
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Transaction platforms
•
Electronic signatures
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PDAs
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Virtual tours
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Digital cameras
•
Property aggregator
Web
sites
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Personal agent Web
sites
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The next big thing
Two highly respected real estate technology experts give their views on the current state of real estate technology and how agents and brokers will interact with technology products and services in the future. Sometimes they agree; sometimes not. While you read their predictions, you might even stumble across a tip or two.
The experts
Since 1990, Matthew Ferrara has taught thousands of leading real estate professionals and most of the top 100 brokerages nationwide how to work smarter with the help of technology. He has authored technology courses for the Women’s Council of REALTORS®, the GRI REALTOR® Institutes in more than a dozen states, and has Internet programs at Web learning centers such as Coldwell Banker University. Matthew’s Tech Hotline provides technical support for REALTOR® associations and companies nationwide.
Pat Zaby, CCIM, CRB, CRS, is a nationally known author, software developer, and real estate speaker. He has a degree in real estate and has been a REALTOR® since 1968. He is one of the pioneers in promoting technology to real estate agents, and speaks to tens of thousands of people a year on the subject.
Matthew Ferrara: A solution without a problem. When most agents don’t even take the time to respond to e-mail daily and still have difficulty updating their antivirus programs, I think online transaction platforms sound like a great idea, but nobody’s really requesting them. Before implementing a solution that will cost a lot of money, ask "Who really needs this? Are consumers not able to sell their homes without this? Or is this just another idea that has enamored a bunch of tech geeks?" Right now, consumers would be very happy just getting e-mail updates on the status of their closing or the marketing of their home; they would be happy getting documents e-mailed as (usable) attachments and receiving e-faxes of closing docs.
Pat Zaby: The first wave was a complete failure, but they will eventually be used. Title companies are becoming the big players in the real estate Internet arena. Companies like First American, Fidelity, and Stewart have lots of money and are committing it to projects that will help them control the real estate transaction. It is uncertain, but it appears that they will simultaneously go after brokers to get participation from the top down and the agents to get participation from the bottom up. The thing that is known and obvious is that title companies understand the real estate business unlike the first wave of Internet entrepreneurs who saw this segment as a gold mine but had no understanding of how to extract it. I think the title companies will be successful.
Matthew Ferrara: It’s catch-up time for real estate. Many industries, like insurance and legal services, are using them already. Most mortgage vendors online accept digital "signatures" to begin the loan-approval process. Now, it’s time for real estate forms-software companies and brokerages to get their forms up to speed. Most documents online are in proprietary formats and, at best, can be printed by the consumer. That’s not good enough–they should be able to annotate, make changes in a safe way and then sign off on the deal.
Pat Zaby: A natural progression. Legislation and technology have to come together to satisfy the concerns that forgery or theft won’t ruin an individual. It has taken a long time, relatively speaking, for some of the public to use their credit cards online, and yet I think the majority of people still don’t feel comfortable with it. A bank isn’t going to lend hundreds of thousands of dollars unless they are sure that they have an enforceable lien. I think it will eventually be commonplace, but the security issues have to satisfy the basic fears of the consumer.
Matthew Ferrara: A mixed bag. With handhelds, there are three levels: 1) The Good: Memory-upgradable, color models like the Sony 615 and Handspring Prism. Agents should be using color models with at least 32 MB of RAM to accommodate programs, data, forms, and photos they can show to buyers and beam to prospects; 2) The Bad: Combo devices like PDA/cell phones that are so big and heavy they are like speaking into a brick on your shoulder. These devices are still in their infancy, so they’re things to watch, not use–not just yet.; 3)The Ugly: Proprietary devices used by some associations to download MLS data and open lock boxes, but that trap agents into aging, underpowered technology.
Pat Zaby: An essential agent tool. Handheld devices are a natural for real estate agents, because they are electronic versions of the day planners that so many agents like for keeping track of their appointments, names, and addresses. The distinct advantage is that they can be synchronized with a computer, so they will have a back-up if it is lost or stolen. I believe they will be adopted by agents and considered as essential as a cell phone. The challenge is the platform. The Palm operating system has been the clear leader, but it is losing ground to the Pocket PC and other Windows CE operating systems. One more issue is that agents don’t want to carry a cell phone, PDA, pager, financial calculator, and other devices. It is clear that the phone and PDA will probably be combined, but will you be carrying a PDA that is a phone or a phone that is a PDA?
Matthew Ferrara: What century is this? Today’s virtual tours are cute, but they’re not impressive to the 30-something first-time homebuyer on the Internet. Why? Because they’re silent! What century is this? The 30-somethings are online, downloading videos, MP3 music, watching streaming live television–all of which feature sound. It’s shameful that real estate portals do not feature narrated virtual tours by the agent. And the cost of virtual tours is way out of proportion with what FSBOs can do on their own. Any FSBO can put their own video tour MPG, complete with sound, online in seconds for nearly no cost using their Sony Mavica digital camera. No special camera, software, or additional costs–just point, narrate, shoot.
Pat Zaby: Future looks bright. Virtual tours will stick around; they’ll get faster and better and because of the competition, the price will dramatically drop. They give the public exactly what they want: to see the home without having to physically visit it. There are more than 20 companies on the Internet competing for agents’ patronage. I think that the ones that include portfolios of still pictures are actually as effective or more so than the ones using videos and 360-degree pictures taken with special lenses. It is an example of when low-tech (multiple still pictures) is more effective than high-tech.
Matthew Ferrara: The most underused agent tool. What do most agents do with their digital photos? Print them. Outrageous! It’s digital, and that means it should be e-mailed, posted online, put on a CD, used in a PowerPoint presentation, and beamed from your PDA to the buyer’s PDA at an open house–not printed! I’m a big fan of the Sony Mavicas–they take JPEG photos standard, so the agent does not need to use any software to convert the pictures; they have in-camera resolution switching, so the agent can take hi-res or e-mailable photos without additional software; they feature nice LCD screens that agents can use as a showing tool; and they take full-motion, voice-narrated video clips. Best of all, you do all this on a floppy disk that you transfer to your PC or simply give to the buyer as a "multimedia flyer" at the end of the day.
Pat Zaby: An essential merchandising tool for residential and commercial real estate. Digital cameras are getting very powerful, up to five megapixels. The Internet likes lower quality that keeps the file size small, but printing requires higher quality, which makes the file size larger. The answer is to shoot the pictures at print quality, then, using photo-editing software, reduce the pictures for the Internet. I believe the most important thing to look for in a camera is a wide-angle lens, because when you want to display the interior of homes, you need to get as much in the picture as possible.
Matthew Ferrara: Bye bye, baby! This is going to steadily decline, as more brokerages, especially the franchises, take their data-management and consumer-privacy concerns more seriously. Print magazines and newspapers are not going to get automatic double-duty out of their classified ads without the broker’s consent–and perhaps payment. Large-scale aggregators like Homes.com are teetering on the edge anyway, because the cost of paying brokers for the listings is too high if they are to remain competitive. Microsoft’s HomeAdvisor will be the exception, because it can run in the red for the next 100 years as a Microsoft-funded subsidiary. Sites like Realtor.com will be the next real online battlefields: Large franchises like Century 21 and Coldwell Banker and RE/MAX will begin to ask themselves why (especially with IDX) wouldn’t they want the consumer to visit their company sites and patronize their own mortgage vendors and service providers?
Pat Zaby: A troubled area with opportunity for success. Three of the major aggregators are in trouble: HomeStore, Homes.com, and HomeSeekers. IDX may siphon some of the importance away from these national aggregation sites, because most of the home purchases are done locally, and if a consumer can see all of the available homes in one area on one local site, they may not look for a national one. I think the trend is going to be for mega-agents to band together, regardless of whether they are with the same company or in the same area, to create networks. They will aggregate their listings on one site.
Matthew Ferrara: Good riddance! Next to online casinos, the worst sites on the Internet are most agent sites. First, they just look bad. Ugly cookie-cutter sites make agents all look the same. Personally designed sites suffer from lack of design and HTML knowledge and rarely are updated. And the best sites, while good, are just repeats of what the consumer saw at the larger sites like Realtor.com with some ego-boosting materials thrown in. Why spend the money reinventing the same school reports and neighborhood data that the consumer already got somewhere else? I just don’t get it. I personally think that agents should all have a bio page on their company site, attached to their listings, and that’s it. Any market study will show you that online buyers and sellers are looking for inventory–not agents, school reports, or town data–online.
Pat Zaby: A site for every agent. Every agent will feel the need to have a personal Web site. This is the most cost-effective way to promote their services and their listings. Agents can control their advertising by reducing the size of print ads and referring people to their Web sites for comprehensive information. An agent’s Web address should be listed on every piece of printed material and be incorporated into e-mail signatures.
Matthew Ferrara: Cut the cords. The next big thing in real estate technology is wireless tools. From checking e-mail on your digital phone to fully integrated wireless PDAs with MLS access, cutting the cords is going to give mobile productivity a big boost for agents ready to take advantage of the developments. Laptops will finally kill off desktops. PDAs will enable people to use a real browser to search the Internet while walking down the street. Wireless office networks will reduce the broker’s cost to add agents to the network without cables, desks, and office space. A new segment of wireless called "telematics" will enable automobiles with cheaper GPS mapping tools and heads-up e-mail displays. Wireless video cameras will make doing a showing or open house an "online event" for buyers who cannot visit in person. Cell phones with PDA tools and built-in digital cameras, like the Nokias used in Europe now, will make it easier to grab data and photos and beam them to a buyer anywhere on the next-generation cellular network. If you want to watch the market evolve, just wait until we unhook the consumer and the agent from their desks!
Pat Zaby: Simplify, simplify, simplify. I think things that simplify an agent’s tasks will be successful. For instance, productivity software gave agents control of their databases and allowed them to establish action plans and produce mailings. However, if the truth be known, I think most agents have very expensive "electronic Rolodexes." Services that will perform the prospecting functions for agents will be valued because they save agents time and effort, and they are willing to pay money for that convenience so that they can spend more time with buyers and sellers.
For information about Pat Zaby’s newsletter or having Pat speak at your next event, go to www.PatZaby.com.
Matthew Ferrara can be reached at www.mfseminars.com or educator@att.net.
Photo © PhotoDisc.
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