Three Reasons Commercial Real Estate Brokers Should Embrace Technology, Not Fear It
Technology provides efficiency, knowledge and timely information. With the adoption of technology, brokers can be trusted advisors at the table, rather than transactional agents. It is the role of a broker to provide liquidity, transparency and the highest return on a property.
Residential real estate brokers — think single-family homes — have quickly embraced technology as a symbiotic partner, while commercial real estate has lagged behind. Today, the adoption of technology will propel savvy commercial real estate companies forward and let those who are slow to adopt new practices follow the curve. Technology will most certainly have a significant effect on the business of commercial real estate brokers.
Like individuals in many other industries, real estate professionals and brokers in particular have been reluctant, skeptical and worried about embracing new tools that could seemingly put them out of work. Think of stockbrokers: their day-to-day operations today are totally different from what they did 20 years ago, but their work is also improved and more efficient thanks to technology. And it’s not as if they lost their jobs because of technology, quite the contrary. Technology has complemented their fiduciary role to clients, their relationships and their knowledge of the market — now they are better brokers because they have embraced the role of adviser in its truest sense. These same reasons apply to commercial real estate brokers and why technology will only enhance their work without jeopardizing their careers.
Technology will help brokers spend less time working on trades and more time providing advice and building stronger relationships with clients. We all know that technology increases the number of eyeballs on an ad; however, converting these site visits into offers and navigating through the series of offers and due diligence requires a relationship and communication between buyer and seller. The connections needed for these roles are a skill that brokers cultivate over time and something that technology cannot replace.
Market knowledge and consulting skills
While technology will make rent collection and financial modeling more efficient and less time-consuming, brokers will still be needed for their industry knowledge and advising skills. Although there are many data providers, finding the information you need for a rental survey or an offer note takes less time. There are even newer platforms that use predictive analytics and machine learning to not only deliver the data to you, but to take it to the next level of conclusion. The algorithms will help brokers analyze more trades in less time by quickly removing outliers. Whether figuring out what the optimal rental price should be or which apartments are really comps, brokers will always need to check the self-populated answers and provide their expertise to clients on what other sources are saying and what they think is the right answer.
Brokers play a key role as trustees of their clients. A broker provides third-party mediation and intimate knowledge of the market. It is the duty of a broker to obtain the best possible price and conditions for his client. If off-market trading has taught us anything, it’s that the buyer, not the seller, has the advantage. A broker must represent the seller’s best interest, while respecting the buyer, by bringing both parties to a final offer and then to closing. All the nuance required of a fiduciary role makes it hard to think that technology will ever replace it.
Brokers will have to scale their businesses to integrate new tools into the market or they will be left behind. How much of your day do you spend doing tasks that are not directly related to securing a contract and closing a deal? From CRM and marketing automation to data accessibility and automated analytics, technology tools are like having a bigger team without having to hire additional support. These tools also give you more time to do what you do best: brokerage. It is better to take the lead in adopting new technologies than to chase to catch up.