The real estate brokerage industry faces change and disruption as technology and data bring transparency and convenience to the home-buying process.
Companies like Zillow, Trulia, and Realtor aggregate price and demographic data, making it directly available to consumers, thereby infringing on the historical business model of traditional real estate brokers. As a result, real estate brokers have had to find new ways to compete and add value to buyers.
Century 21 is the most well-known brand among incumbent real estate brokerage firms. It's an iconic brand, 46 years old, with 7,500 locations in 80 countries and 115,000 sales professionals worldwide.
With its large size and high brand recognition, Century 21 is in a unique position to rethink the traditional real estate business model, process, technology, and customer experience.
To learn more about the impact of technology and data on real estate brokerage at scale, I invited the CEO of Century 21, Nick Bailey, to be a guest on episode 264 of the CXOTalk series of conversations with innovators. CXOTalk brings together the most innovative people in the world for substantive and in-depth discussions about disruption and the business impact of technology.
During our conversation, I asked Nick to explain the role of Century 21 in a landscape where consumers have immediate access to data that was once the exclusive province of brokers. His responses offer a case study in supporting key strengths, especially in relationships and process, while adopting innovative technology to make life easier for both brokers and clients. Importantly, Nick describes his role as a change agent leading a large, established organization into the future.
Episode 264 presents a unique and compelling look inside one of America's most recognizable brands.
Our entire conversation is embedded above and you can also read the complete transcript. Down below are edited excerpts from the discussion.
There is a lot of talk about what's changing in real estate. It comes down to one thing, which is, we are in a consumer-driven movement. It's not just specific to real estate, but how consumers are engaging with products and services. We can point to many companies that have been at the forefront of this movement, companies like Amazon, like Netflix, like Uber.
Via the mediums of technology, consumers can make things easier, faster, or take the anxiety out of the process. How that translates to real estate today is, the home search process is very popular. People jump online. They jump on their mobile device looking for property, dreaming about property in certain vacation areas, and they get very involved.
Real estate is a hot topic. Look at television shows about remodeling your home, or should I stay in it or buy something else? It's just something that's become at the forefront of consumers and excitement.
With that, though, comes a great deal of opportunity, which is, if anyone has bought or sold real estate lately, they know that the home search part of it can be fun and exciting. But as soon as you go into the next steps of the home shopping and going into purchasing a property, the process of how you go from purchasing that property to moving into it has a lot of room to be improved. Unfortunately, you ask many people that have bought a home recently if they'd like to do it again soon and they say no because the process to get there is so complex. That's where having a real estate professional to help with that process is crucial.
I saw a recent study that said there are, on average, 181 steps from the time you start looking for a property to moving in. That creates a lot of complexity, and so we must help solve for that. Consumers are demanding better experiences with lower levels of anxiety, and we have the opportunity, as an organization and as a brand, to help make that process better.
What is the role and limitations of data in real estate today?
There's a balance between emotional need and the financial analytical side. As an organization, we have to balance both of them. At Century 21, we're dealing with entrepreneurs that want to build their business and help people buy and sell. We're also dealing with consumers that are buying and selling and saying, "I am demanding a better process." As leaders, we must bring those two constituents together to create a better result for both.
There are two things. Data can be so useful in the education process and the home search process. Where do I want to live? Where does my family need to be? What's happening in the neighborhood with pricing on homes? Are the values going up? Are they going down? Are they staying the same?
Creating that level of data, of empowering people to be able to see what's on the market, see what's not on the market, and do their homework on certain neighborhoods. I'm doing this myself right now. I happen to be going through a relocation, and so I'm using an immense amount of data in looking at neighborhoods and comparables on properties to find exactly the right area.
At the same time, when I visit the area that I'm looking to move, my agent is so critical of how he's helping create a lifestyle for my family. My wife is a huge outdoor enthusiast, and I have young children, and so schools, sports, and community are important. The data doesn't show that. That's where I think that you can couple data in your home search process for what house, what neighborhood, what's right for the financial side of it, what do I qualify for? Then you combine that with the community knowledge of a professional to figure out the lifestyle of where you want to live.
Look at the future, what is the role of Century 21 in this data-driven world?
It comes in two buckets. One is serving consumers, buyers and sellers, and the other bucket is serving real estate professionals.
We have to figure out, from a technology perspective, how to satisfy both of those constituents. When you look at the consumer side of it, we just talked moments ago about how they want to see properties online. They want to see big, beautiful photos. They want to see every type of information they can on as many properties as they can.
We're in a low inventory market nationwide, and so the need for looking at accurate data quickly from a consumer perspective is really important. What's new on the market? What does it look like? Is it in the neighborhood I'm looking? From a technology perspective, we want to make sure that we're serving up the absolute best, most timely information about real estate listings to consumers as we can. That will help create engagement with our system.
Then when you look over on the other side of it, the other bucket that I mentioned, which is for real estate professionals, our job is to help them be productive and simplify their life. We know that, with consumers and agents alike, mobile is where everyone is. Very few people are sitting behind a desktop, fewer and fewer people all the time sitting behind a desk doing searches and spending time. They are driven by their mobile device and their interactions.
From a technology perspective, I want to see our organization create a mobile-first platform that helps connect buyers and sellers with our real estate professionals and helps them take their buyers and sellers from search to close because that process can be rocky. If we can make that process easy for our agents, which in turn makes it easy and transparent for consumers, that to me is a winning formula.
What about Zillow and other data-driven platforms?
Before coming to this role, I spent some time at Zillow. I think that they've done amazing things for the consumer experience within home search.
You're using Zillow as an example. Several other companies do something similar. They have done a great job looking at what consumers want in their home search process. They've done a great deal of work in this home search area.
As soon as homebuyers and sellers move into, say, home shopping to close, which is the main part of a transaction, that's where the shift happens. And so, they are a great example of consumers demanding; saying, "I want insight. I want information, more that's readily available to me about neighborhoods, housing, prices, and lending." Zillow has served that up to the consumers.
The consumer then goes and starts the home shopping process. Once they go under contract, it's like we shut the lights out on them. Then, they have to work with their agent. Is the appraisal done? Did I get approved for a loan? Do we have inspection issues? There's this constant back and forth that creates a lot of anxiety for a homebuyer. That's what we still have to solve for.
Regarding big data, there are so many things that can be done when you look at, for example, some of our technology today at Century 21. We allow an agent to work with their sphere of influence. If their buyers go online, looking at properties, and engage in that process, our technology alerts our agents to say, "Hey, one of your clients is looking at real estate and may want to get involved with you." We try to connect those dots.
Moving forward, there will be interesting dynamics around predictive analytics for home sellers. Look around a neighborhood. Can we use technology and big data to figure out who is going to list their home for sale, say, in the next six months? I think we're going to hear a lot more about that. We're already engaging with a company to look at those opportunities because, it would be for our real estate agents to be able to serve up, via technology, data showing people that may need to move so that we can be right there to help them through that process. I think we're going to see a lot more of that on the seller side, but we absolutely can use data to help consumers and agents alike.
Where does customer experience fit?
The agent creates the experience for the consumer. They're completely dependent on it. We can use technology to increase the level of transparency to the consumer along the process. Interaction via technology from home shopping to close that allows consumers to be part of that process even more so. This will also help the agent because good agents make it look easy.
Sometimes consumers say, "Why am I paying an agent so much money? This process seems easy?" The agent is back there wiping the sweat off saying, "Mr. and Mrs. Buyer/Seller, you have no idea what I just did to get you to the closing table."
And so, there's a disconnect there, and that's where I see technology moving forward in the next five years of bringing those two together, so they can share the experience. It takes the anxiety away from the consumer. It increases transparency and shows the value of the agent and will help move along to a successful, easier, less stressful process to close.
Where is the technology going?
One, mobile first. Everything is mobile. It's where consumers [and] it's where agents are doing their business. But when you look at [it], no one yet in the industry has solved from lead to close.
What I mean by that is, I raise my hand; I inquire; I'm interested in buying a property. I go, and I look. I submit an offer. The paperwork and how that's done on transaction management, taking you through all the steps to get it to the closing table. Then getting down and signing that final 180-page book at the closing table actually to own the property. That's where there's opportunity from a mobile perspective.
I envision a space where I, as a real estate agent, can use my mobile device as a lead comes in and take that lead through the entire process. If you want to see homes, I connect with you via my mobile device. When you're ready to write an offer, I write an offer on my mobile device and submit it to the necessary stakeholders. When it comes down to an appraisal and how that fits into the transaction [that's done] via the mobile device, [and] the financing that comes through. Even to a point when you get to the closing table, I envision a day where buyers and sellers will sit with a mobile device and sign all their closing documents instead of going to the title company and having a close.
I think that the mobile device is going to transcend that transaction process. That's where we must be innovative as leaders in this space in saying, "What can we invest in to make sure that we're delivering an awesome mobile experience from lead to close?"
CXOTalk brings together the most world's top business and government leaders for in-depth conversations on digital disruption, AI, innovation, and related topics. Be sure to watch our many episodes!