As the president of Warburg Realty — one of New York’s most well-respected brokerages — and and a co-founding partner and advisor at real estate tech accelerator MetaProp, Clelia Peters is extremely well-positioned to understand what’s happening in real estate and what might be coming down the pipeline in the months to come.
She’s going to be speaking at Inman Connect New York, January 29 through February 1 at the Marriott Marquis Times Square, and she talked to Inman about why she thinks disruption has truly arrived in real estate, where the space for disruptors is getting crowded and more.
Tell us a little more about your session. How will it address how the industry can embrace the shifting market?
I would begin by saying that I do think that it is real, that disruption has come to our market, and one of the lessons of 2018 is that there is no hiding from the fact that the industry is in the midst of really significant change, and that change is impacting every part of the market — every price point, every type of inventory. I don’t think it’s an option anymore to be an ostrich. You used to go to agents because they had information you couldn’t access anywhere else in the market. It’s been almost 10 years since that change took place, but 2018 is when the profundity of that change began to manifest.
Most of the shifts we’re seeing in the disruptors is that the agent has failed to move into the role of a professional service provider, and others are moving into that space — or in the form of Compass and other high-performing groups in the market: “We’re going to help you appear more professional to your clients.” You see this bifurcation in the market from technologies that are trying to replace or augment the agent as professional services provider, but the dangerous place to be — and it exists not just as a danger for agents but brokerages themselves — is to say “we’re just going to do something in the middle.”
Consumers have had access to, in most cases, the same level of listing information that agents have for quite a long time now, but I think that there have been barriers for consumers shifting to different models. These are complex and infrequent transactions where the perceived level of risk feels quite high, and what we’ve seen over time is the evolution and the role of technology in our lives more broadly is just going deeper and deeper, combined with the fact that people are so used to having listing data accessible to them — we’re just seeing a different level of openness to new models. I really do think that 2018 was kind of the rubicon that we crossed where there’s no going back; anybody who thinks that this isn’t happening or that there’s going to be some return to the way things “used to be” — they’re really at this point not engaged with the reality.
What do you think are the biggest opportunities to focus on in the real estate industry right now?
I think there’s a few different things. If you’re a pure play technologist, I actually think the kind of disintermediation, discount, iBuying space is getting pretty crowded. Definitely what we have seen in the first phase of technologies coming in is that there is more focus on replacing the agent with something else than there is on professionalizing or assisting the agent. Compass — their whole platform is about professionalizing the agent for tech, and their growth is testament that there’s an appetite for that. The opportunity is to think about how can technology help committed, professional agents perform their role even better than they do today.
I think it’s important to recognize that top agents have referral-based businesses, and an interesting conundrum around Zillow, for instance, is that for most top agents, cold leads only make up a certain percent of their business and they’re only ever going to make up a certain percent of their business. Over time, those people who don’t have any connection to a broker and don’t have any allegiance to a broker tend to bleed toward models where it’s a discount model or they’re not using commission at all. The most secure opportunity for agents is a referral-based business. And we’ve not seen that many companies focus on that.
Another question is, how do you use technology to surface meaningful market insights that help agents appear as an expert to their clients? How do you use technology to improve the pitching process, to improve pricing? One conundrum is that many of the type of people who succeed as top agents are not nerdy, analytical types; they are highly relational human types. How can technology help bridge the gap for them between the insights the market might offer and the relationships they’re able to establish with their clients?
I love it when Mike DelPrete talks about loss aversion and how sellers value what they have more than buyers value it, and one of the key roles of the agent is helping to bridge that gap. Sellers can be like pageant moms, it’s hard for them to see their home in the actual context of the market, so how can agents use insight to bridge that gap? How can technology increase the stickiness in particular between buyer clients and their agents? There are a few different players in the market, like RealScout that creates a controlled environment to send buyers to search on your own branded site, or Mauricio Umansky’s PLS, an MLS for pocket listings so that brokers have some sort of advantage. They’re addressing the question, “how do you make your buyers feel like they need to work with a real estate agent in some way?”
What are your hopes for the next 12 months, and what will you be working on?
I experience this as an optimistic time for the industry because I think that part of what’s happening is that we’re increasing consumer choice and it actually is real that consumers have been underserved by agents who weren’t always as professional as they should be in certain markets or certain environments, and that gives all of us a bad name. One of the things I’m really optimistic about as the market evolves is that I do think that a certain portion of the people who are currently agents today — there’s probably going to be less opportunity for them going forward and the number of agents will diminish, but the agents who remain will be more professional, serious agents who are very focused on offering the highest level of service to their clients.
I’m optimistic that this will raise the perception of the agent in terms of their role and the value that they provide nationally, and help really good agents receive more of the due that they deserve because at its best, this is an extremely sophisticated, complex role that requires both deep market knowledge and deep psychological knowledge. I think agents who can do both receive far too little credit in the market.
Discover the opportunities in a changing market at Inman Connect New York, January 29 – February 1. Jumpstart 2019 with tactical takeaways, unlimited networking and thought-provoking speakers. Learn more.
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