A property tycoon for the last 7 years… yeah I know, I wish, but we can all dream can’t we? But I have had the pleasure of helping homeowners and buyers find and sell their dream homes, in addition to working with investors and renovating properties for the last 7 years, so this industry is quite literally what I eat, breath and sleep. Technological innovation has dramatically influenced the real estate landscape, changing how we find properties, market homes, who we employ to sell them and what fees we are willing to pay.
Vastly different to the US way of home buying/selling, below is a brief overview of the traditional home selling experience in the UK:
Traditionally, Estate Agents were local companies with a storefront. This storefront served multiple purposes, local properties were advertised in the windows where potential buyers and sellers could come into the offices to discuss their home buying/selling needs. Properties were exclusively advertised within the estate agencies, with external advertising dependent upon marketing budgets/property values for weekly ads in local newspapers.
The advent of the internet saw websites launch with the ability to browse an agent’s entire inventory. But the major change to estate agents in the digital economy came about with the launching of real estate portals such as Rightmove and Zoopla. Currently, the UK’s largest property website, Rightmove, paved the way for the creation of nationwide, online estate agents.
As the first step for most home buyers, estate agents now must utilise Rightmove, this has massively increased marketing budgets and even changed how we photograph, and display properties. A much more visible process, we have seen companies such as Matterport expand on the usual photography by creating virtual walkthroughs and floorplans.
While high street estate agents are trying to combat this online takeover, to put it plainly, it’s an effort in vain. Launched in 2015, On The Market is an online property portal, created to compete against Zoopla and Rightmove, with one major difference. Agents utilising the portal MUST have a brick and mortar store on a high street. This was created by High Street agents in a bid to offset the rise in online agents on Rightmove. Needless to say, while I am sure most of my English classmates are aware of or have used Rightmove and Zoopla, there will be far fewer who have even heard of On The Market, let alone used the site.
Where I see the home selling process in 10-20 years:
I see the home selling process in years to come utilizing iBeacon technology and becoming more autonomous.
Instant, personal and location specific. Three factors that are arguably the future of marketing. “Consumers want to know when are where to get the best deals, and they want products to be specific to their tastes and needs – and beacon technology is making thisexperience reality”.(2)
I believe that there will no longer be a job role as an estate agent and people who own homes and who are looking to sell will utilize a site similar to Rightmove, but where homeowners will list properties themselves. Without needing an estate agent, sellers will be given something akin to an ibeacon, that will then notify buyers within their area, price range etc. as they search online, drive by in their cars or walk by.
How proximity technology is gaining year on year and where it is predicted to go:
With an activated beacon at a property, potential buyers will be notified of the property via the app once it meets their criteria. Syncing technologies, the app can also work with smart cars. The app, our cars, and products like Google Glass will show houses along a buyers route to work, within school catchment areas and close to family and friends. Viewings will be scheduled directly through the app with vendors and negotiations can be done with the help of AI technology with both parties entering their bottom price/max price and position (eg. cash, two-week escrow, no chain).
In addition to this, as we have seen technology progress over the last few years there has been an emphasis on the sharing economy and we have moved away from this need to own. Think back just 10 years, the music we listened to, we owned, the cars we drove, we owned, the handbags and clothes we wore, we owned, and the movies we watched at home were owned. Today we stream, lease and borrow in a way that has never been done before. Netflix, Spotify, Rent the Runway, are all examples of an economy moving away from a notion of ownership being the ultimate goal.
As mentioned in the lecture materials, students will see themselves having 10+ jobs by the time they’re 30. This isn’t our parents’ world anymore. We don’t grow and live in one place with one lifelong career. Thereby taking the need out of homeownership and moving toward a more fluid way of living. This, in turn, will drastically affect the need for estate agents with a whole new way to find rentals, arrange a viewing and create lease deals. Think Uber and AirBnB.
So in short, I completely agree with the findings presented in Schwab that Estate Agents are a job that is most prone to automation, hence my desire to get my masters in Marketing and find a new career path before I’m unemployed and decades off retirement age.
It is an interesting blog – I like the way you use graphic which has made the ways of selling property easy to see and virtual tour of inside a house! The benefits of an online estate agency are obvious including fixed fee as less labour work involved. But this also reminds me what happened last year in estate business. One of the prominent online real estate agency Emoov went into administration last Dec due to lack of cash. This has astonished me as it has been so successful.
I have done some research online and it was said the company has got all the things it takes for a good successful business.
Dr. Simon Murdoch, a Co-Founder and Managing Partnerat Episode 1 Ventures LLP has given his opinion as to how the company fails. According to him, the business had a solid plan and a good team of management (https://medium.com/@episode1/emoov-learned-the-hard-way-what-it-costs-to-win-9a4d37446653 ) So what has made the fall of Emoov? His opinion is simply the business didn’t have enough money to support the marketing budget it required. The company was not able to secure as much investment as it should have compared to its bigger competitor Purplebricks. But I still can’t understand why such a good business failed to attract investors. What is your opinion on this?
PurpleBricks also didn’t do well amid the slowing down UK property market last year but it has moved away to overseas market with operations open in the US, Canada, Germany and Australia. – It looks like not only technology plays a big part in becoming successful but having an international business model in this traditional market is very important too!
Thanks for your comment! Purple Bricks is certainly an interesting company. Purple Bricks currently hold a 74% market share of the UK online hybrid real estate market and even reported a 20% in first-half revenue as its continued to gain market share despite the slow down of the UK housing market. (1) Despite all this Purplebricks reported a 26.1 million pound loss in 2018 because of their operating losses assosiated with their expansion into the US, Canada and Australia. (2) I think the losses Purplebricks and other online agents such as Emoov, feel in new markets are indicidive of the marketing challenges associated with an online estate agents in an extremely competitive market. It would be really interesting to see what percentage of company funds is allocated to marketing and if thats even enough.
Digital Business Models 
Hi Victoria,
It is an interesting blog – I like the way you use graphic which has made the ways of selling property easy to see and virtual tour of inside a house! The benefits of an online estate agency are obvious including fixed fee as less labour work involved. But this also reminds me what happened last year in estate business. One of the prominent online real estate agency Emoov went into administration last Dec due to lack of cash. This has astonished me as it has been so successful.
I have done some research online and it was said the company has got all the things it takes for a good successful business.
Dr. Simon Murdoch, a Co-Founder and Managing Partnerat Episode 1 Ventures LLP has given his opinion as to how the company fails. According to him, the business had a solid plan and a good team of management (https://medium.com/@episode1/emoov-learned-the-hard-way-what-it-costs-to-win-9a4d37446653 ) So what has made the fall of Emoov? His opinion is simply the business didn’t have enough money to support the marketing budget it required. The company was not able to secure as much investment as it should have compared to its bigger competitor Purplebricks. But I still can’t understand why such a good business failed to attract investors. What is your opinion on this?
PurpleBricks also didn’t do well amid the slowing down UK property market last year but it has moved away to overseas market with operations open in the US, Canada, Germany and Australia. – It looks like not only technology plays a big part in becoming successful but having an international business model in this traditional market is very important too!
References:
1. SCHRAER, N. (2019). Online estate agent Emoov goes into administration. [online] MoneySavingExpert.com. Available at: https://www.moneysavingexpert.com/news/2018/12/online-estate-agent-emoov-goes-into-administration—here-s-what/ [Accessed 24 Jan. 2019].
2. Ft.com. (2019). Digital estate agency Emoov enters administration | Financial Times. [online] Available at: https://www.ft.com/content/2eaef058-f739-11e8-af46-2022a0b02a6c [Accessed 24 Jan. 2019].
3. Renshaw, R. (2019). Purplebricks tells City ‘We are confident about future for our business’. [online] Property Industry Eye. Available at: https://www.propertyindustryeye.com/purplebricks-tells-city-we-are-confident-about-future-for-our-business/ [Accessed 24 Jan. 2019].
4. Jolly, J. (2019). First-half losses double at Purplebricks as housing market stalls. [online] the Guardian. Available at: https://www.theguardian.com/business/2018/dec/13/first-half-losses-double-purplebricks-online-estate-agent-housing-market-stalls [Accessed 24 Jan. 2019].
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Thanks for your comment! Purple Bricks is certainly an interesting company. Purple Bricks currently hold a 74% market share of the UK online hybrid real estate market and even reported a 20% in first-half revenue as its continued to gain market share despite the slow down of the UK housing market. (1) Despite all this Purplebricks reported a 26.1 million pound loss in 2018 because of their operating losses assosiated with their expansion into the US, Canada and Australia. (2) I think the losses Purplebricks and other online agents such as Emoov, feel in new markets are indicidive of the marketing challenges associated with an online estate agents in an extremely competitive market. It would be really interesting to see what percentage of company funds is allocated to marketing and if thats even enough.
(1) https://www.proactiveinvestors.co.uk/companies/news/208593/purplebricks-posts-first-half-revenue-growth-but-admits-housing-market-is-challenging–208593.html
(2) https://www.bbc.co.uk/news/business-44721667
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