“Real Estate Companies Will Die”?

Pete Flint: ‘The majority of traditional real estate companies will die’

Disruption already came to hospitality, media and retail — the home sale transaction is no exception, Trulia co-founder tells ICNY attendees

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Inman Connect San Francisco, Jul 16-20, 2018

NEW YORK — Real estate will face a reckoning over the next 10 years as technology finally disrupts the industry in a big way, Trulia co-founder Pete Flinttold attendees at Inman Connect New York on Friday during his Capital Connect keynote.

“There’s a technology tsunami coming in,” Flint said. “A lot of low-lying areas have been covered — media, communications, information. This nonstop technology tsunami is moving higher and higher and higher into operations, into brokerages, into franchises, into physical real estate, and it’s frankly unstoppable.”

Flint, now an investor with the venture firm NFX, spoke with Wired senior writer Erin Griffith about his experience building and exiting Trulia, his thoughts on real estate tech investing and how he expects the industry to transform drastically over the next decade.

“It’s a slow-moving industry. There’s a 10-year window here. But the majority of traditional real estate companies will die,” Flint said.

While the decade after Trulia’s founding in 2005 was about revolutionizing the search process, Flint said, technology is now targeting the real estate transaction.

Consumers are realizing that real estate is behind the curve compared to most other industries, and they’re not sure what value the big companies bring anymore, according to Flint.

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“Consumers have had enough,” Flint said. “They’ve seen transformation in hospitality, in retail, in all these other industries, and they’re saying, ‘Where’s the transformation in real estate?’”

Real estate has fallen behind on the technology front due to the industry’s structure, Flint said. The franchise model and agents’ employment as independent contractors makes it hard for big companies to evolve. At the same time, there hasn’t been one single leader in real estate to lead the charge on technological advancement.

Consumers can’t differentiate between Keller Williams and Re/Max, but they do know the difference between Compass and Opendoor. Only startups have been able to try new models, Flint said.

“The companies are realizing that it’s often easier to start a new company and change from a blank sheet of paper than it is to change an existing company,” Flint said.

Through NFX, Flint is now investing in tech and software companies that work in the real estate industry. Flint left Trulia’s board six months ago after staying on to help manage the transition when Trulia was acquired by Zillow in 2015.

The $150 million fund is pitching investors its thesis around network effects: the idea that a product gets better for all users the more users it gains.

And it’s not just real estate that’s facing the late-stage tech disruption Flint is predicting. “Early-stage venture capital will be transformed by technology in the same way Wall Street’s been transformed,” Flint said.

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7 ways to get fired by your buyer clients

If you lose their trust, you’ve lost the transaction

Real estate is a business of relationships. Real estate relationships, as in life, can be good and bad.

The majority of homebuyers are satisfied with their homebuying experience; 89 percent would use their agent again or recommend him or her to others. Relationships that sour may be few and far between, but they do happen.

These seven mistakes will send your buyers heading for the hills.

Be unavailable

Buyers should expect to hear from their agents regularly throughout the course of their real estate transaction. Slow or near-extinct communication sends a message to your buyers that their transaction is not important to you.

As Cara Ameer writes in “What does a real estate agent do all day anyway?,” being available is a major part of a real estate agent’s job.

There are no official days off in real estate. You might have spans without any scheduled appointments, but there are always inquiries, emails and texts to respond to.

Agents are “on” no matter where they are. In our instant-response society, there really is no waiting until tomorrow.

Advocate for the wrong side

When buyers purchase a home, they put their financial livelihood in the hands of their agent. As that agent, you are expected to negotiate on their behalf and represent their interests throughout the transaction.

As Chris Dietz, global EVP of Leading Real Estate Companies of the World pointed out in an Inman Special report — “Do you have what it takes to be a top buyer’s agent?” — in the end, the buyer is the only one bringing money to the closing table. Their interests, which are innately at odds with those of the seller, matter too.

Many buyers probably appreciate that the U.S. real estate industry provides a space for them in the workforce — because many other countries don’t. Protecting the transaction from conflicts of interest is what buyers expect from their agent. Compromising your buyers’ financial livelihood for the sake of your own paycheck will get you fired — and possibly result in an ethics complaint.

Compromise their trust

Real estate is a business built on trust and relationships. Buyers want to work with an agent they trust. It doesn’t matter if you are a top producer or if you are endorsed by the town celebrity — if you aren’t trustworthy, your reputation is not worth the cost of the postcard boasting your accolades.

Ignore the relationship

As is the case with many business relationships, buyers want to do business with agents they have a connection with.

Not every buyer you come across during your real estate career is going to feel like you are a good fit to handle their business. There is plenty of business to go around. Dust yourself off, and move on.

Half listen

Inman’s report revealed that the ability to listen is the no. 1 skill most important to a buyer’s agent’s success. As one agent commented in the research:

“Listen and empathize with [clients]. Provide them helpful/beneficial information so they can make confident decisions. Anticipate questions they may have and seek to answer or direct them where they can get good answers. Treat them like you would want to be treated. Don’t ‘sell them” truly care about them and their needs.”

It sounds simple, but every buyer has different motivations and needs when purchasing a home. When buyers don’t feel heard, the agent loses their trust. When you lose your buyers’ trust, you have lost the transaction.

Crumble when obstacles arise

buyer’s agent needs to be able to solve problems that arise during the transaction. Some buyer transactions are harder than others.

Buying a home is like a puzzle. Every transaction is different, and each comes with its own unique set of pieces.

It’s the agent’s job to put all of the pieces of the puzzle together and solve problems that come along.

Forget professionalism

Showing up late for appointments, speaking poorly of other parties in the transaction or not being prepared are a few examples of lacking professionalism.

A buyer may see an agent who demonstrates lack of professionalism as inexperienced or unprepared.

With emotions running high, real estate transactions are susceptible to unhappy endings. But avoid these behaviors during your buyer’s transaction and you can have clients singing your praises.

Kellie Tinnin is a training administrator with the Greater Albuquerque Association of Realtors. Follow the GAAR on Twitter or Facebook.