Technology has not been around for a long time, but it seems to have conquered every aspect of our lives. The real estate industry, though still a little defiant about the impacts of technology, has seen this new phenomenon influence in recent years.
Millennial clients, in particular, are progressively transforming the homebuying process into something timely and innovative. They are embracing new technological trends that are penetrating the real estate environment.
Others who belong in older age groups, however, are not so keen on accepting the changes. Non-techie baby boomers still find it difficult to abandon the traditional methods that they have grown accustomed to.
They are hesitant to receive without a pang of misgiving the new technologies that they barely recognize. But why is this so? Here are several the reasons some people have a hard time catching up with technological advancement.
1. Lack of understanding of technologies
New real estate technologies have recently sprung. Among the most popular today are mobile tools such as smartphones and tablets, which both real estate agents and clients use for faster transactions.
Other technologies that are catching the interest of millennial clients are mobile collaboration apps, e-signature technology and responsive interface design websites for real estate companies.
For instance, DMCI Homes, a Philippine-based real estate developer has various websites and blogs that cater to the needs of its growing client base. Other companies are carrying out the same strategy.
To put it in the words of Pam O’Connor, president and CEO of Leading Real Estate Companies of the World, “At the minimum, most brokerages have developed mobile versions of their website, and now many are creating specific mobile apps.”
Although all of this might sound exciting to a young techie, the older segment of real estate clients are not so thrilled. They have grown so familiar with the classic telephone method of sealing a real estate deal, that they find it quite a challenge to transition to these new means.
They find technological applications too complicated, so they shy away from them. In fact, according to a study conducted by Pew Research Center, 77 percent of older Americans need someone to assist them in the process of learning new technologies.
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2. Familiar comfort with traditional methods
Despite the rise of technological trends in the recent past, traditional modes are still strong in the real estate industry. Steak dinners, offline transactions, flyers, property auctions, open houses, real estate booths, and newspaper ads are still preferred by the older groups who venture into real estate.
These traditional methods are more expensive and time-consuming, but many still prefer it over the mobile way.
“Some clients didn’t want to upgrade their technology and cling to their paper processes,” said Brad Charnas, president and owner of Charnas Appraisal.
Baby boomers might acknowledge the benefits of using technology in real estate dealings, but they cling to the traditional means, and they just settle for what they are already comfortable with.
They would rather not explore something new that takes them out of their comfort zone. Because the shift to technology is a little stressful, they go for the traditional method instead.
3. Limited educational online resources about real estate
How has technology changed real estate? Undoubtedly, technology has contributed some significant improvements to the real estate industry.
For one, it has fused personal interaction and digital communication to make the process more holistic and dynamic. Technology has provided tools that real estate agents can use to drive sales faster and that clients can take advantage of to compare deals.
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Technology has proven its worth in providing information and dispersing knowledge, but it appears that none of this is enough. Even in the virtual real estate pool, no chunk of information can replace the hands-on learning experience that the traditional method provides.
You might find a hundred resources over the web, but none of them will be enough to supply you with everything you need to know about real estate. True learning comes with real interaction.
As Spencer Rascoff, CEO of Zillow, said, “When push comes to shove, and it comes time to sell their home, the transaction is so infrequent and so highly emotional and expensive — and consumers are so prone to error — that they turn to a professional.”
With a program, you can’t fully assess your progress in learning, but with a human adviser, you can have a better perspective on things.
4. Fear of falling prey to online scams
The internet is crowded with a lot of information — some of it is relevant, and some is not. Of all the sites found on the web, the ones that are just meant to trick and swindle helpless victims are few and far between. This is why the non-techie client base of the real estate industry is entitled to dislike new technologies.
Scams that can potentially wreck a person financially, psychologically and emotionally are all over the web. If the terms of that condo for sale sounds too good to be true, it might be a scam.
Sketchy advertising is a common identifier of shady deals. When you’re not sure if the buyer of your condominium is a scammer or not, do further research and report the person to an authority.
But remember to do this only when you have significant evidence that the person is not legit. Otherwise, just block further communication with the person.
It is natural for older clients to steer away from something that they deem to have a high-risk factor. It’s better to use a system that is outdated but more reliable than use a new way that can cause serious damage.
5. Need for personal advice from real professionals
“We will never be a point-and-click industry,” Phil Faranda, owner of J. Philip Real Estate in Westchester County, New York, said. “You will always need a trusted adviser to ensure that you get the best terms possible. The stakes are so high. If you want to do a do-it-yourself project, build a hovercraft.”
He could not have been more right. Indeed, this is exactly the reason real estate companies have not killed off their brokers.
Despite the growing popularity of technology in the millennial sector, almost everyone still agrees that it is not always the answer to every problem. Technology has its own downsides, too.
In a study conducted by Elon University, 92 percent of student respondents agreed that technology has negative effects on face-to-face communication, and that is despite the fact that 97 percent of them bring their mobile gadgets wherever they are.
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If millennials themselves understand the adverse effects of technology on their personal interactions, how much more do non-millennials? It’s easy to see how technology has changed the real estate industry.
Nonetheless, baby boomers still prefer real estate agents over lifeless screens because they need somebody to help them with price negotiations, paperwork, financial arrangements and other technical duties. But most importantly, they need the guidance of a trusted real estate agent to help them make the right decisions when buying or selling a property.
These are only five of the reasons some people still hold on to the traditional methods of doing business. New real estate technologies might be convenient for some, but the industry should also consider those who are not comfortable using them.
As Rich Barton, founder of Expedia and Zillow, said, “It was obvious to us, regardless of how relatively frustrated consumers were with the whole process, how important that agent relationship was to customers. No robots were going to eliminate the agents.”
Jona Jone is a former mortgage originator in Philadelphia; she’s a business and property specialist who writes about real estate investment, business, parenting and living at Vistage Executive Street Blog.