In the US, the estate agency industry was officially born 100 years ago with the passing of the Real Estate Act.
It was first adopted in California and then in some form by the remaining States. A written exam became a requirement in 1923 – so you could argue that the UK industry, where minimum qualifications are being considered but not yet introduced, is almost a century behind America.
However, the US and UK markets do have some aspects in common.
In the US, 90% of consumers still use an agent. The figure is possibly a little higher in the UK, but not dissimilar.
On both sides of the pond, innovations such as property portals haven’t really altered what agents have always done: help people navigate what’s often the largest financial transaction of a lifetime.
But – and this sounds familiar – in the US, it’s agreed that the real estate business is an over-crowded space, according to the article linked below.
Put simply, there are too many agents: 2m licensees, according to trade body the National Association of Realtors.
And the Americans themselves consider that the barrier of entry remains low – despite the need for a licence and to pass an exam.
Getting into the business is easy enough, but making a living is more difficult.
So how will agents in the US survive the next 100 years?
By catering for a time-poor audience. In America, it’s common to work 45 hours a week or more.
The suggestion is that estate agency survivors will:
- Host virtual showings from the office so that buyers can rule out unsuitable properties faster and sellers only see serious buyers book a tour.
- Connect clients with an AI chatbot that matches them with available properties based on their preferences, narrowing down their list of “maybes”.
- Ditch the combination lock box and embrace self-guided tour technology akin to Rently or ShowMojo, which have become popular self-guided showing tools in the rental space. This could open up a property’s showing hours, accommodate more buyers, and secure an offer on a house faster.
- Manage paperwork with digital closing and escrow tools and set up the client with video notarisation software so they can skip the trip to the bank.
- Use blockchain-enabled smart contracts to encrypt sensitive client information.
- Accept cryptocurrency on current listings.
In a word, proptech.
Plus new and different ways of marketing (one US agent threw an event for a wealthy seller, where a collection of diamonds went on show and attracted a buyer from London – we wonder how much was spent on security).
In the UK, the estate agency industry is older.
Chestertons, for example, goes back to 1805, and come to think of it, isn’t just still going but seems to have entered a new lease of life.
What do YOU think is key to UK estate agents’ survival and prosperity as we go forward into yet another decade? And are there useful comparisons that can be made with the US market, given how difficult UK agents have found it to cross the Atlantic with their business models and vice versa?
The interesting article about the US market is here: