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REITM Focus: Transforming through technology

Technological innovations have brought about significant shifts in the real estate agency industry.

A Real Estate Industry Transformation Map (ITM) is currently being collectively developed by government agencies and industry stakeholders to create a future-ready real estate industry to meet current and anticipated challenges.

A common theme surfacing from the many REITM discussions with stakeholders so far is that while technology innovations are an impetus for the industry to evolve in order for businesses to remain competitive, it is also through the use of technology that they can stay ahead.

CEAnergy spoke with several industry professionals on how digital innovations have transformed the way property transactions are being conducted, and how technological tools can be further harnessed to realise the vision of a more productive, professional, and customer-centred industry.

Here are six observations.

Consumers are expecting technology to value-add to their transaction experiences

Technology innovations are an impetus for the industry to evolve and must be tapped on for businesses to remain competitive.

Technological innovations have led to changes in consumers’ expectations and preferences in the way they conduct their property transactions.

Mr Alvin Sim, Senior Division Director, ERA Realty Network (ERA), observed that with social media and search engines, buyers and sellers have become more savvy with property information so readily available.

“We are expected to provide more than just information but fast responses, sound opinions, and advice. Embracing and utilising technology is a sign of confidence to clients as we are showcasing our ability to learn, adapt, and provide the best service for them,” said Mr Sim, who has been in the industry since 2008.

Agencies and agents work smarter and serve clients better with technology

Property agencies are upping their game and investing in technology as an enabler for agents to work more productively and enable their clients to make better decisions.

Mr Richard Eng, Associate Division Director at ERA, told CEAnergy that agents today need technology to serve their clients more efficiently. He shared that ERA has developed mobile apps that provide property calculators and project details to provide information and tools for the agents when they interact with their clients.

Property agencies are investing in technology as an enabler for agents to work more productively and to empower their clients to make better decisions.

“My clients are very impressed on how fast I can send them information about their shortlisted projects,” he quipped.

Having been in the industry two years, Mr Eng feels that agents need not worry too much about being replaced by technology. He said that technology will only replace the complacent ones and those reluctant to change, but it will enhance the effectiveness of those who embrace it.

He said, “I am 50 years old this year and am always learning new things along the way, especially online marketing and utilising of mobile apps.”

Mr Sim agreed that agents should not be afraid to adopt new technology and should use them to their advantage. His personal philosophy is that "Technology is a tool, people are the priority". To him, this is an important reminder that real estate is ultimately still a people business.

“No matter how indispensable technology has become in our course of work, there is still nothing that can replace the human to human connection and relationship,” he said.

Amicus, a solutions provider, offers a tool box for agents with the three main verticals of data, property, and customer information. These can further augment the productivity of agents.

The company’s CEO, Mr William Lai, explained that a total of twelve tools are embedded in its “Agent Keys” platform. Through these tools, agents can pull out real time information such as transactional data, numbers on the Do Not Call register, lease renewal, and current rental rates.

Going forward, Mr Lai believes that blockchain could restructure the way information is exchanged and how business is conducted in real estate. “Its real value is in establishing trust-based interaction…The agent will benefit from access to real time, trusted, and transparent data,” said Mr Lai.

Beyond achieving better productivity, agents’ bottom lines also improve when they adopt technology

Another property agency has also reaped the benefits of technology by being a first mover.

In 2016, the OrangeTee.com introduced the Property Agents Review, the first property agent review portal of its kind by a property agency in Singapore that allows customers to review and rate its property agents.

Since then, a team of academics led by Professor Ong Seow Eng from the National University of Singapore’s Department of Real Estate has studied this initiative and the findings are encouraging.

NUS research shows that OrangeTee agents who voluntarily adopted the Property Agents Review featuring online ratings of their service performed better in terms of commissions than a control sample of agents who did not.

Prof Ong shared with CEAnergy that the research shows that OrangeTee agents who voluntarily adopted the review portal performed better in terms of commissions than a control sample of agents who did not.

In addition to higher commissions, the early adopters also saw an increase in sales and rental leads. He explained that the control sample was crucial in that the team had to carefully account for agent experience, track record, educational qualifications, and past performance.

Said Prof Ong, “This research finding is significant in that [the] adopters are able to signal their competence to prospective buyers and sellers. From a different perspective, the [Property Agents Review] portal enhances transparency and provides better information for consumers.”

Prof Ong notes that user and consumer reviews are increasingly a norm in many industries. He believes that in time to come, this will be so for property transactions as well.

“As reviews become more widespread, there will be increasing pressure for all agents to adopt, as not having reviews may be construed as evidence of lack of ability. Overall, an industry wide scheme for independent agent reviews that is validated and unfiltered is a positive development for the real estate industry as it enhances transparency and inspires greater consumer confidence,” he said.

Technology has catalysed new property transaction models

With the availability of convenient online tools and transaction information, more consumers may decide to handle property transactions on their own. CEA’s 2015 Public Perception Survey found that the percentage of customers who were undecided about engaging agents for future transactions increased from 24 per cent in 2012 to 31 per cent in 2015.

Through technology, consumers can tap on hybrid property portals to manage the entire transaction on their own, or where agent services are offered for a fixed fee.

Ms Rhonda Wong, co-founder and CEO of Ohmyhome.sg, observed that “over 50 per cent of transactors today with or without an agent would have done some homework on the internet, they no longer need to rely solely on a professional to provide them with advice”.

To meet the needs of such consumers, she set up Ohmyhome, a platform for HDB homeowners to connect with home searchers directly.

Those who use the platform can decide if they need an agent to assist them with their transaction and pay a fixed fee for the agent’s services. On the other hand, users pay a lower fee if they only require assistance for the documentation aspects.

Ohmyhome is the first in the industry to introduce such a la carte documentation services. Ms Wong explained that they recognised that having an agent to help with documentation gives consumers a peace of mind, especially those who are uncomfortable handling paperwork. The portal also has “customised journeys” for buyers, landlords and tenants, making sure they have help every step of the way.

She added that the availability of technology and skillset enabled the company “to bring to life an idea that is able to reach out to the whole of Singapore via their smartphones, something we couldn't have achieved manually”.

The government can play a catalytic role in strengthening industry productivity through data sharing

To enhance the productivity of industry professionals, the government is exploring making data available for verification through automated checks.

When asked how they hope technology can help them work more effectively, industry professionals unanimously expressed hope for better integration of data between government portals and their agency apps.

Ohmyhome’s Ms Wong believes that the property transaction process will be made more efficient if consumers are able to have the option of submitting their declaration documentation online by pulling them directly from other online sources or government portals.

The good news for the industry is that as part of the suggestions raised during the Real Estate ITM discussions, the Ministry of National Development is working with the relevant government agencies to study whether it is possible to automate verification checks by allowing the industry to tap on government data.

Partnerships galvanise the power of technology

CEA welcomes ideas that would enable property agencies and agents to work more innovatively, professionally, and productively, so that they can offer even more outstanding service to consumers.

In early August 2017, Singapore held its inaugural Property Tech, or PropTech, hackathon. The hackathon, named Hood Disrupt, was organised by igloohome, a Singapore-based start-up which has created smart access solutions, and District 6, a co-working space.

We welcome tech ideas that enable property agencies and agents to work more innovatively, professionally and productively, so that they can offer better service to consumers.

“igloohome is keen to connect the stakeholders in the property tech industry, and to create a community that drives innovation. Hood Disrupt has provided entrepreneurs and innovators with a platform to showcase their ideas to some of the most established companies in property. The enthusiastic response we have received is most encouraging,” said CEO of igloohome Anthony Chow.

CEA supported the event as a community partner and mentored the teams together with other event partners. Amongst the prize winners of the hackathon was a team which developed a plug-in that allows homeowners to visualise their floor plans in 3D.

We are very encouraged by ground-up initiatives such as this hackathon to generate ideas that could shape the industry of the future. As part of our Real Estate ITM engagement efforts, we would be happy to share some of the ideas with our stakeholder groups as we formulate the ITM. These ideas and the other views we receive will help us refine the ITM and detail its initiatives.

For more updates on how the Real Estate ITM is shaping up, check out our “REITM Focus” articles in upcoming issues!