There’s been a shift in the real estate industry over the last several years, with an increasing level of investment in technology. This investment is what is driving the proliferation of products, which, as the leader of a real estate software firm, I believe is generally positive.
However, brokerages need to be careful. Too much of any good thing will often turn sour, and this scenario is no different. All of the investment in real estate technology is like a double-edged sword, and you can bet it knows how to cut the other way.
Investment And Innovation In The Real Estate Industry Today
The investment that has been poured into real estate technology has spurred astonishing amounts of innovation. Today, if a brokerage is looking to opt for a new tool, such as a website or CRM provider, they have more than enough options to choose from. The players on the tech side only continue to grow, which makes for better, stronger products on the market.
This means brokerages can choose the best-of-breed tool to have a tech stack that supports their unique business goals, communities, agents and, of course, the consumers their agents guide through the biggest transactions of their lives. No one can get by with a mediocre, outdated and un-adopted tool or service like they used to. These are all good things.
Consolidation And The Double-Edged Sword
Unfortunately, this goodness can take a cruel turn. The amount of investment, particularly from private equity, means there’s also ongoing consolidation, which means these companies or products change hands. For brokerages, this can mean:
• Products may get abandoned.
• Products may get mismanaged.
• Companies may choose to cancel your contract.
• Products may fall into enemy hands and become direct competition.
A brokerage might have loved the product or service before the consolidation, but if the tool and company are now owned by their direct competition — well, that changes things. In any of these likely scenarios, brokerages need to be able to stay in control and continue to leverage their own data.
The Difference Between Open And Closed Platforms
When a brokerage opts to add a platform to their tech stack, what they’re signing up for isn’t as straightforward as they think it might be. The vast majority of platforms out there (while they don’t advertise as such) are closed platforms. A closed platform means that if brokerages choose to switch tools, or those tools fall into enemy hands, they can’t connect the technology their agents already know and love, so they lose their current investments, and, most important of all, they lose all of their data.
Imagine, even in the very best-case scenario, a brokerage getting their data back in the mail on a USB drive — what would they do with it? While a brokerage might technically get the data back, it would be useless. On the flip side, open platforms give this flexibility and more, and crucially, a brokerages’ data is retained regardless of the tool changes they make.
Future-Proofing Has To Become The New Status Quo
It’s my belief that an open platform is what protects a brokerage today, tomorrow and every day after that. In a partially open platform like the Keller Cloud or fully open platforms like the LeadingRE Cloud or ours, the MoxiCloud, the technology helps manage the brokerage’s data, without claiming governance over it like a closed platform does. In an essence, an open platform keeps the power in the brokerage’s hands.
Open platforms give the brokerage the ability to create a fully customizable tech stack, but maintain all of the data — property data, brokerage data, consumer data and brokerage branding — in a centralized location to speak to all of the tools. The open platform model helps brokerages compete in this ongoing real estate technology feud. Brokerages can maintain current investments in technology tools, add new ones and gives them unlimited flexibility down the road.
Choosing Your Technology
If you’re leading a brokerage, you should ask the following questions as you evaluate platform technology to help you decide which provider will best meet your needs:
• Does the platform allow you to retain your current investments in tools? Does it allow any vendor to integrate?
• Where does the data reside: in the platform or in the tools? And if you get rid of the tools, can you retain the platform and the data within it?
• Do other technology companies on the platform have formal contracts or relationships with the platform provider that obligate them to protect your data?
• Does the platform provider make all platform capabilities available to all customers?
• Is the platform tied to a given product from that vender (e.g., the platform is part of your brokerage website)? What happens if you want to change website vendors?
• How is the platform provider financially backed? Does it have the resources to maintain, evolve and protect the platform for the long haul?
• Does the platform provider have data center redundancy and security in place to meet the growing challenge of cyber security?
All of this continued investment being made into real estate technology means there will only be more tools for brokerages, not fewer. The data that drives business still needs to be available to all of their tools regardless of which products are chosen or thrown out. Brokerages need the ability to be nimble and switch, without getting a USB stick delivered via the post. Brokerages need to own their data, and the platform they choose must let them maintain control of it.