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An ongoing look into how location shapes where we live and what we do

On the "Tinderization of Real Estate"

Posted by Aron Korenblit on Dec 17, 2018 9:14:00 AM

I had just finished reading the Atlantic’s article on Millenials’ “Sex recession” when Notorious Rob’s “Tinderization of Real Estate” popped into my inbox. In it, Rob draws a parallel between online dating and real estate.

His thought process, distilled, goes like this:

  1. The dating world has migrated almost exclusively online by way of Tinder and Match.com. That would have been preposterous 10 years ago, so if something as important as finding your life partner moved online, why wouldn’t real estate transactions do the same?

  2. It’s now become almost “weird” to approach people offline. Extending the analogy, could the real estate industry migrate so heavily online that the in-person world of real estate (referrals, clubs, etc.) goes into the wastebasket?

  3. Winners in the online dating world are those who are already favoured in the offline world. So who will win in the online-real-estate-world? The answer: agents are already considering the advantages of online leads (and the platforms that enable the migration).

I love Rob’s blog. It’s a great source of long-form insights on the real estate industry.  As a millennial Tinder user who works in real estate, I thought it would be useful to add my thoughts on his post.

real estate tinder

Will Real Estate Fully Migrate to a Digital Experience?

Every industry which moves online follows the same pattern. Initially, no one believed that it could be digitized, then there was a killer application or a change in mentality that gradually (sometimes extremely rapidly – Uber anyone?) made it the norm. So we ended up in a world where we now think “remember when we had to talk to someone before getting what we want?”

If people are already dropping the equivalent of a cash down on their phone for a week at a villa without talking to anyone, what’s stopping them from doing the same for a home?

Although I don’t expect real estate to be reduced to a simple swipe, it’s already happened to the travel, auto and dating industries. Remember when Expedia and Booking.com gobbled up travel market share?

If people are already dropping the equivalent of a cash down on their phone for a week at a villa without talking to anyone, what’s stopping them from doing the same for a home?

It was assumed that the luxury end would always be dominated by over-the-phone travel consultants. From my time in the travel industry, I know that some online luxury travel portals are now averaging $10K+ transactions on mobile.

If people are already dropping the equivalent of a cash down on their phone for a week at a villa without talking to anyone, what’s stopping them from doing the same for a home?

Not important Doesn’t Win

In 2001, the CEO of Borders famously outsourced its online efforts to Amazon. By seeding the inventory of what became its biggest competitor, this fatal partnership got the ball rolling on its eventual bankruptcy. At the time of the deal, Borders CEO said online sales “weren’t strategic” to his business... which in my book is synonymous with “not important”.

In our busy world, anything considered “not important” doesn’t gets prioritized. You don’t improve if you don’t consistently hone your craft. So guess who wins in this hypothetical future online world?

To Rob’s point: those who consider leads critical today are the ones who will win out in the future as more transactions move online. In his words:

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“To me, it looks like the Top 1% or the Top 5% who get the gold star, who have the most glowing reviews, who “look the best” in a mobile app, get the lion’s share of the leads and inquiries. Beautiful people who don’t need the help benefit the most from dating apps. Successful agents and teams who don’t need the help will benefit the most from real estate apps.

That implies that the 13.7% of respondents who said that online leads were “Critical” in the PAA Research survey might end up doing 85% of the transactions, and the vast majority of agents who don’t see transactions from online leads, who think they’re not that important, etc. suddenly find themselves in a world where anything other than waiting for online leads is borderline creepy.”

“Notorious” Rob Hahn

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By their very nature, aggregators have a way of flattening out the competition to the benefit of the platform. Amazon purposefully doesn’t allow brand differentiation on its platform to further commoditize suppliers.

Luckily, real estate professionals can still control their relationship with leads by paying for the privilege of getting a lead’s contact details. How to manage that relationship, however, is a concept still in its infancy (Zillow’s only starting to manage it themselves, and they have admittedly somewhat failed at it).

How Do You Go from not Important to Critical?

The Atlantic article showcases Jason, a neophyte to the online dating world, who blames his lack of success on his poor looks. The numbers are bleak: he estimates it takes 300 swipes ‘yes’ to get a single conversation.

I’m sure a lot of agents will relate to Jason on just how hard it is to get an online “lead” to speak to them. I’d argue that appeal may be partially responsible for Jason’s problems, but the real issue is a fundamental misunderstanding of how online and offline worlds differ.

On the web, you first have to provide value before you can ask for anything in return. For example, the vast majority of searches on Google aren’t monetized. Not because Google couldn’t do it, but because providing “free” information creates a sense of trust and value in Google which keeps users coming back.

Similarly, brokerages must refocus their websites to helping agents and homebuyers find the perfect home, rather than asking for a user’s email at every turn. If new home buyers care about lifestyle and urban areas, your broker’s website must reflect those changing demographics.

Out are the days of flyers and neighbourhood printouts, and in are informative, sleek neighbourhood updates delivered via email/text that are relevant to me.

In the spirit of providing value right from the get-go, remember that web leads may be trying to disqualify a property, as much as inquire about one. It’s safe to assume that they may have something else in mind than just property information.

How do you do that? By answering their first request, i.e.: “Yes, this home is available and I can show it to you tomorrow at 3pm (note the specific time)” and adding: ”By the way, there are ten other homes nearby and one off-market.”

Whatever you do, don’t go for the creepy close with no effort. Just like with online dating, when you reply to someone who outreaches in a “cold” manner, i.e., a question without a lot of context, you need to respond or outreach with warmth so they engage and build trust.

If someone emails you about viewing a home and you just reply, “yes see you there”, then you are losing an opportunity to build trust and provide value in meeting with you. A more complete and engaging response will yield better conversion than just answering an inbound question.

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Respond in kind. If they email, email back - offer to text them. Peak online browsing is often done at work (to be precise, Monday 12 - 3pm is when our API gets the most usage), so a phone call may not be wise. Generally, there’s an increasing disdain for all things voice; only 37% of smartphone users list calling as their main use case. So consider text messages and email to be your main communication platforms.

Ultimately, it’s any professional’s job to go where the clients are. In the case of real estate, I – like Rob – foresee a world where a real estate professional’s clients come (almost) exclusively from web leads.

On the flipside, real estate professionals who don’t put in the work to understand how to leverage web leads today will end up like Jason tomorrow - swept away by a world in which they can’t compete.

Tags: Product
Aron Korenblit

Written by Aron Korenblit

Customer Success Manager at Local Logic. If I think it's interesting, I'll probably write something about it. If other people find that writing interesting, it'll end up here. Avid traveller & mediocre squash player despite all my best efforts.