Happy New Year to all our estate agents and their clients!
Now that the kids are back in school and the Christmas pudding settled elegantly on your hips, it’s time to get back to work. As you get yourself into the swing of things, are you wondering what you can expect from work and life in general this year?
Here, in no particular order, are five trends we’re expecting during 2019. As you know, we are unapologetically agent-centric at Keller Williams so our expected trends focus on matters concerning estate agents and their clients.
1 – It’s election year for South Africans
Elections are great for democracy. For business, however, not so much. Let me explain.
As you know, South Africans are going to the polls in 2019 to vote for their chosen national and provincial legislatures. Considering South Africa’s history, voting is a right and a privilege, and all eligible South Africans should do their civic duty.
We are expecting the electioneering and rhetoric by the political parties in the run up to the election to get quite animated, as it often does. In every country there is a political middle, left and right, and they all cater for a different constituency. It’s no different in South Africa.
However, an election year is generally a time of uncertainty. Voters and politicians, despite their best efforts, are uncertain of the results of an election. Who is going to win? Are we expecting one party to win with an outright majority or will we see coalition governments? Sensational and inflammatory statements by the far left and the far right get a lot of media coverage. This leads to uncertainty, which, in turn, puts pressure on business and investment prospects.
But will it affect the property market?
Yes, this will affect the property market. Estate agents should expect buyers and sellers of properties to adopt a wait-and-see approach, especially in the run-up to the election. The property market will not grind to a halt, but expect a general slow-down.
As a property professional, you will play an important role as trusted advisor. Your clients need your specialist knowledge and expertise to make good property decisions – especially in an election year (or, maybe, despite the election). Qualify your buyers and identify their wants and needs to match them with the homes that are right for them, irrespective of the political backdrop.
Remember, whether it’s an election year or not, people still move, get transferred, upscale, downscale, get transferred and invest in property. There is always a property market. You just need to be in it. Come from contribution to help your clients make good property decisions that are right for them.
2 – Expect more “disruption”
If I had one Rand for every company that claimed to be a market disruptor, I’d have quite a few extra Rand. It seems that every other day a new competitor is entering the property market. Many of them promise to disrupt the South African real estate industry with innovative business models or technological advancements. All these “disruptors” inside and outside the real estate sector see transformation and disruption coming and want to stake their claim.
As a company also regarded by many as a market disruptor, Keller Williams supports increased competition. It will be good for estate agents and their clients and even for the current players in the industry. The major components of the South African property landscape haven’t changed much over the past few decades. To a large extent, the incumbent companies at the top of the food-chain have remained the same. Real estate business models, agent remuneration models, training and education, technology and a whole host of related things are ripe for change.
An individual agent or agency might, however, feel overwhelmed by all this talk of massive change and activity. In our view, respectfully, this is not warranted.
How do you handle disruptions?
On the award-winning real estate blog, Inman, Raj Purohit recently said, “Too many agents are reacting to the disruption either by sticking their heads in the sand and pretending it does not impact them or becoming fatalistic and disheartened by the speed of change and assuming they cannot control their own destiny.
Raj continues, “I would submit that neither approach is warranted and that agents must apply the same vigor to determining their place in our disrupted sector as they have in improving their sales skills in years past.”
So what is the best way to ready yourself for the inevitable market disruption that’s
coming already here. Here are 3 tips:
2.1. Stay on top of trends affecting the property industry
Nothing beats knowledge. Read about the property landscape and trends, listen to thought leaders and engage with people in the know. It’s amazing what one can learn just by joining one of the property practitioner groups on Facebook, for example.
We write regularly about the trends and factors affecting the property industry so you can also follow this blog. Just click here to subscribe to get regular, useful updates delivered to you.
2.2. Make sure you are at the right estate agency
To some agents it’s daunting to consider a move to another agency, even if it will obviously be better for their businesses. Unfortunately inertia, a lack of motivation to move or the brand of coffee in the office are not reasons to stay at the wrong agency. Carefully consider which agency will best equip you to survive and thrive in a disrupted industry. You need to determine what your business needs are and what company is able to provide you with the tools you require.
To arrange a confidential business consultation to discover what KW will do for your business, click here. We are at the cutting edge of the trends affecting your business, and we have made an unequivocal stand for individual agents like you.
2.3. Think ahead
The property industry, like any other industry, will undergo many changes, regardless of any individual’s reservations. Raj Purohit recommends that you develop an individually tailored five-year plan for your business that acknowledges the challenges you face. Importantly, your plan should lay out a road map to address those obstacles. Use the tried-and-tested SWOT-analysis to draw up your roadmap.
Keller Williams associates use an extremely powerful planning tool called the 1-3-5 to plan their business roadmaps. It’s used in combination with a focus tool called the 4-1-1. Of course, we can help with that.
3 – The tech competitors are coming
Real estate will always be an industry made up only of many estate agencies, individual estate agents and their clients, right? There is no way that technology will ever be able to replace estate agents, right?
Considering how most service industries were or are being disrupted by technology companies in some way, why do we think property would be any different? Think about it. You can get a pretty decent diagnosis of any medical condition on WebMD. Who needs a travel agent if you you can get plane tickets and hotel accommodation on the internet? How about getting online legal advice from a bunch of lawyers on www.justanswer.com?
In a previous blog post, we reported that Brad Inman, had remarked in his column after Inman Connect (a week-long event bringing together more than 4,000 estate agents and brokers), that there are two legitimate views of the future of the property industry:
- “Some are crazed about preserving the best elements of what works in real estate: hard working representation by qualified, ethical and capable real estate agents who help millions of consumers each year realize their dream of owning a home. (Gary Keller, co-founder and CEO of Keller Williams, who has been named the most powerful person in real estate, calls them the tech-enabled agents).
- “Equally passionate are entrepreneurs who see and want to change a broken system of inefficiencies, poor customer service and a protracted and expensive process that millions of consumers suffer through each year.” (Keller calls it the agent-enabled tech).
Keller believes agents have two choices: “You can either be an agent who is enabled by tech or you’re going to be the agent who is enabling tech. This is a battle over who will be the fiduciary.”
According to Keller, we’re living in two different times at the moment. “It’s the best of times for the remarkable individual and worst of times for the unremarkable individual. Technology is rewriting the rules, reinventing job descriptions, creating new industries and eliminating others.”
How about South Africa?
If you’re a real estate professional, the question you have to ask yourself is this, “Where does my real estate company/brand stand on this issue? Is it fighting for me, against me or not taking a stand at all?” Some of the biggest South African companies have already started hedging their bets. Unfortunately it seems they are meekly acknowledging defeat to technology companies and not backing their own estate agents.
If this is the approach of big South African companies to tech competitors, what is the realistic outlook for agents at smaller, independent agencies?
At Keller Williams we will always be unapologetically for agents and by agents. As the largest estate agency in the world with more than 190,000 agents at the beginning of 2019, Keller Williams is rapidly innovating to build the technology platform our agents and their clients prefer.
Towards the end of 2018, Keller Williams Southern Africa became (as far as I’m aware), the first and only South African property giant to release a mobile app. This is just the beginning! We are putting agents at the centre of the real estate transaction because we believe that’s how consumers get the biggest benefit.
4 – Data is the new oil
This one is very closely – maybe inextricably – related to Trend 3 above. At the Family Reunion event in 2018, Gary Keller said, “We are in the ‘fourth industrial revolution’ – an era of the machine-powered ‘know-it-all’ business that’s always on, analyzing, learning and thinking. Big data is king…”
As will become more and more obvious, the property industry is in a battle with technology companies. Technology companies are flooding into the real estate space, vying for estate agents’ data. The goal is to turn this data into meaningful insights to build their businesses on the back of agents’ hard work.
Does this sound a bit far-fetched? Most agents don’t know that many off-the-shelf listing management systems, transaction management systems and other software systems are not safe. This is also true for services provided by some allied associates like large bond origination companies. Why? These systems and companies provide useful tools and services on the front-end while taking your data without your permission at the back-end.
Let’s look at an example.
The Private Property and FNB data gaffe
In a previous blog post, we highlighted how First National Bank began offering a direct selling option to property sellers on its nav>>Home mobile app. Astonishingly, FNB was loading its app with estate agents’ listing data without their permission. The app allowed clients of FNB to circumvent estate agents to get direct access to the sellers of those properties.
It subsequently transpired that FNB got the listings and data without the agents’ permission from Private Property. Mark Coetzee, COO of Private Property, said the agents’ listings were syndicated to FNB’s banking platform to “increase the leads to estate agents.”
However noble Privte Property’s motive was, our question still remains, “If a property portal or a bank owns and/or uses your most important business data, who is actually in control of your business?”
In order to be competitive and successful in what Keller calls the fourth industrial revolution, agents must control their own data. A tech-enabled agent has control over their data while the agent who enables tech does not. According to Keller, “The one with the most insights wins. And the one with the most data will have the most insights. Let someone else have your data and soon they’ll know more than you do.”
As the largest estate agency in the world with more than 190,000 agents worldwide, Keller Williams has a massive collection of agent, transaction and client data. This gives us an edge among our competitors. It’s an innovation engine that allows our agents to work smarter and more efficiently, a must in today’s fast-moving digital world.
The KW Data Rights Pledge
We will always respect your data as your business and we will always allow you to take your data with you.
5 – It’s becoming increasingly difficult for smaller players to operate in the property industry
A healthy property market requires competition between players. Smaller and independent estate agencies traditionally made up around half of the total number of registered estate agencies. Some of the best property professionals in South Africa ply their trade at these agencies.
However, this position may be under threat. Legislation, regulation, compliance and red tape provide formidable challenges to property entrepreneurs launching new business or simply staying in business.
For example, the Property Practitioner’s Bill, an overhaul of the old Estate Agency Affairs Act, was recently adopted by the National Assembly. Although the Act sets out to transform the property sector, it goes much too far ascribing undue regulation, costs and liabilities on property practitioners, principals and franchisors. In our view this will, ironically, work against the transformation aspirations of the legislator.
Combining this act with the combined weight of fully complying with dozens of other onerous laws and regulation, it’s clear that running even a small agency is becoming very challenging. Our concern is that many smaller and independent agencies will struggle to comply and simply close down or never get off the ground.
Run your business within our business
The Keller Williams business models allows you to run your business in our business. Our Teams Concept, for example, provides you with a vehicle to launch your own property business under the umbrella of a KW Market Centre. You will be able to push your brand in association with KW. We provide a legally compliant, functional structure, and you only have to focus on helping sellers and buyers and your staff.
What do you think?
Those are some of the trends we believe wil play a major role in the South African property market this year. Did we miss anything? Do you agree or disagree?