Can the Internet Kill Residential Agency Practice? – Part 1

Internet killed the agency star…

With an estimated 3 billion new users coming online in the next 7 years the sheer magnitude of numbers and its impact on what we could describe as the cornerstone for Australian residential property, traditional agency practice, can be hard to fathom. If we consider the impact already experienced by larger players in the retail and financial services sectors the outlook looks mixed. Whilst consumers have embraced openness and transparency in the online sphere smart business is identifying gaps in the transactional process. Can ‘bread and butter’ agency players handle the same change in consumer behaviour?

In this post, the first in a series, I’ll explore the case for an online selling portal, outline the pro’s and con’s and offer a prediction on the likely selling and management options in the very near future.

So what could be behind a shift for consumers to embrace an online home sales or management solution? Here are my suggestions;

  • Simplicity
  • Cost
  • Transparency
  • Control

And what might be the reasons not to choose an online sale or management option?

  • Untested method
  • Impersonal transaction
  • Security of transaction

It’s interesting to note we can begin to identify parallels between the fors and against that can go through the mind of home sellers and buyers that could have been very similar to those encountered by other financial service and insurance industries when they first considered a purely online service option, the likes of ubank, bankwest, ing direct, canstar, rabodirect, rams, easystreet (search for online savings account you might see a pattern forming here).

It was in 2001, pre-dotcom bust, small moves were being made by online financial services companies like David Koch’s My Money group to provide comparison sites that linked financial services to potential clients. Looking back on the evolution of these sites we can see the expansion of major financials into the arena taking a much more pro-active approach to online activity. Is it possible the major real estate franchises could take this step and evolve their current business model?

Certainly the world has changed since 2001 so it would be naive to think if two such significant industries, retail and financial services, can be impacted by consumer behaviour residential real estate practice won’t feel greater opportunity to offer a more significantly online based service to an increasing web educated buyer and seller population.

My humble prediction on the future of residential agency in a more digital age? A refinement in day-to-day operation pursuing economies of scale with a greater emphasis in online presence as opposed to on the ground community branches, a transactional model purely online without elimination of tangible inspection options backed up by a suite of options enhancing consumer choice.

Next time I’ll take a closer look at exploring the consumers’ choice of online agency of the future, in the meantime I appreciate your feedback….

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