7 things digital real estate portals offer that brokers don’t
Real estate has largely been a conservative sector, especially in terms of digitization. This primarily boils to its capital-intensive nature, which makes buyers tread cautiously before arriving at a deal. As a result, real estate brokerage became an integral part of the value chain, as a conduit between buyers and sellers. Its prominence was such that digital platforms failed to find takers for a long time after their inception.
Lately however, digitization has made phenomenal inroads into every industry, finally gaining ground in real estate. Now they are redefining how real estate is bought and sold, putting many brokers out of business. Although there are plenty of reasons for this structural shift, a few aspects where digital portals completely edge out conventional, broker-driven transactions are as follows.
The first apparent edge is the optionality. Brokers often have only a handful of properties in their portfolio, which they tend to position as the best in the particular market (may or may not be true). Brokers, therefore, are driven primarily by self-interest. Digital portals, on the other hand, are more service driven, and believe in having more listings and options rather than pushing a select few. Brokers are often confined to a certain location or two, whereas online platforms offer listings across locations, states and, at times, nations.
Customized search and discovery
Most digital property portals are fundamentally search and discovery sites, along with a host of auxiliary offerings. The “search” section often accompanies a number of filters, including no. of bedrooms, amenities, price, and financing, to narrow down the results to a few properties that best meet the buyer’s criteria. This makes the purchasing journey less laborious and more streamlined. In fact, this gave digital portals good traction during the pandemic, when buyers faced mobility restrictions to make in-person visits to multiple properties. Many opted to narrow down their options, make fewer visits, and close the deal faster.
The primary value proposition of digital portals is transparency. All stakeholders — buyers, sellers, dealers, developers — have access to the same, detailed information, which brings an element of trust to transactions. Buyers in particular can make informed decisions and not worry about overpaying or getting defrauded, which is common in real estate transactions. Reputed portals often screen sellers, developers, and dealers before listing their properties, and also facilitate the transaction and registration, making the whole process reliable. Many have a review-based system to reward the seller or dealer who maintains a good transactional track-record.
Secure online end-to-end transactions are especially beneficial to foreign or expat investors who cannot make in-person site visits. Digital portals provide virtual tours and remote registration services. In fact, a few portals also offer post-sales property management services, taking care of rental handovers, monthly payments, agreements, lease, etc., which cannot be expected of brokers. Portals like 99Acres and Zillow, which are owned and operated by public companies, boast a sizable foreign investor portfolio due to reliability by virtue of their public profile.
Competitive price points
Another notable advantage of digital portals is the price points, which are standardized by design. The platform ensures that the price point of a certain property remains standard, regardless of whether the seller is a dealer or an individual. For instance, a dealer cannot overprice the property on the same platform when an individual is offering a similar property at a considerably low price. Bearing in mind the possibility of getting ignored, the dealer is naturally incentivized to keep the price within a realistic range. Many portals now have AI-based price discovery engines, which analyze multiple factors to give buyers a realistic valuation of the property. Price points with brokers often leave much to be desired.
Brokers often operate either in their own capacities or tie up with one or two partners. But the competition does not allow for greater synergies, making it difficult to organize an entire market. Digital portals, however, create a FOMO (fear of missing out) element, bringing all dealers under their operational purview — which, finally, works in favour of buyers, who now have all options on the table and are in a better decision-making position.
The most defining aspect of digital portals is that they are marketplaces; while brokers are businesses. So, digital portals are financially better positioned to refine their offerings and upgrade constantly. Many provide aerial view of properties and communities using drones, buyers can avail virtual reality-powered property tours, price discovery is made fool proof using AI, portals have real estate indices to determine investment prospects, 24/7, life-cycle assistance is provided using both customer service executives and chatbots, and many portals are now pivoting to a full-stacked model and are offering buyers an option to furnish or interior design the properties with augmented reality. Such multi-fold value is hard to match, and it is now coming at the expense of brokers.