Kylie Davis: (00:02)

Welcome to The PropTech Podcast. It's Kylie Davis here and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. I passionately believe we need to create and grow a sense of community between the innovators and real estate agents, and sharing our stories is a great way to do that.

Kylie Davis: (00:21)

Now, the aim of each episode is to introduce listeners to a PropTech innovator who is pushing the boundaries of what's possible and explore the issues and challenges raised by the tech and how they can create amazing property experiences. But in this episode, I actually wanted to do something different because let's face it, it has been the most extraordinary week on the global stage with the onslaught of the Coronavirus being identified as a pandemic, and the world as we know it is going completely crazy.

Kylie Davis: (00:49)

So it seems none of the rules apply and I figured why not embrace that? And instead of an interview this week, this is me talking about something close to my heart, the adoption of technology in the real estate industry. Why we need to do it better, how we should be looking at doing it, and how we need to step up to this challenge that's being thrown up to us right now through this global pandemic, and look at how agents can become truly digital and mobile. So I hope you're all okay with that. Now, normal service will resume next week when I interview Adam Campbell from Vault Real Estate, but in the meantime bear with me.

Kylie Davis: (01:25)

So my week began presenting in Melbourne to 1,500 agents at the realestate.com.au Prop20 and that was an incredible event. Then on Wednesday we took the show to Adelaide to more than 550 agents, but now in accordance with government warnings, the events for Perth, Brisbane and Sydney have all been cancelled or at least postponed for future date when all this craziness is over.

Kylie Davis: (01:47)

But I think a lot of the materials still needs to be heard by the industry right now, and that was underlined for me by a meeting I had on Friday with a major franchise group who admitted that in the light of the Coronavirus guidelines around quarantining and social distancing, many, many of their offices were completely unprepared and were going to struggle to survive extended periods of isolation.

Kylie Davis: (02:10)

And that made me realise so many real estate offices have been so completely thorough in their resistance to the technology solutions out there that now when we need them most, we're utterly incapable of introducing work-from-home policies and what an awful legacy that is for us as an industry.

Kylie Davis: (02:28)

So my presentation was about technology trends and thriving through disruption. And in it, I cover really briefly the big trends of big data, AI automation and machine learning and how they're affecting how we build, live, and sell in property and our expectations around property.

Kylie Davis: (02:46)

But the real thing I wanted to get across to the agents watching this presentation was that recognition of why we're actually scared of technology, how that's completely normal, but why we need to change right now and how we to start that journey of adoption. A brief from REA was to make sure our presentations were practical and had takeaways that agents could genuinely apply. And like all good presentations it morphed a bit after I first gave it and I found myself talking about the Australian tech companies out there that could solve some of these issues that we're facing.

Kylie Davis: (03:18)

But first, let's take a look at these issues. My question is how do you feel about change? Now, most of us have three basic reactions. We either stick our head in the sand and hope that it completely goes away. We get completely excited about it. But those are both outliers and it tends to affect less than 10% of the population either way.

Kylie Davis: (03:40)

Most of us actually do the whole deer in the headlights thing, and we think that if we stop and just wait, maybe it'll all go away. But here's the thing about technology that we know is that it's not going away. We can't stop it as agents. The days when a group of senior agents could sit around a board table and decide what would or wouldn't be invested in and what would or wouldn't be adopted by the industry, they have long gone.

Kylie Davis: (04:04)

PropTech had more than $20 billion invested in it globally in 2019, and that's growth from 2012 of nearly 9,000%. Four out of the five investments made in 2018 were all in the residential space, or four out of the five biggest investments were all made in that residential space. So this is a juggernaut that's coming down the track and we're seeing some really clear differentiations happening in real estate right now. As real estate agents, as people we do exactly all the things that everyone else in society does. We're searching our phones constantly and regularly.

Kylie Davis: (04:45)

According to Google there's 3.8 million searches every single minute and 82% of us use mobile to find a local business. Searches in businesses near me or something near me have gone up more than 500%. We're checking our phones up to 80 times a day and 91% of us go mobile and look on our phones when we're looking for how to do a task. I recently learned how to change the windscreen wipers on my car by watching a YouTube video. We've all done that.

Kylie Davis: (05:16)

So when we're not real estating, we're being completely mobile. But what's happening in real estate right now is that when we talk about mobile agents, we think that means an agent being in their car or being on their phone. Greg Brown from REA presented an amazing statistic that talked about only 29% of the Australian population actually want to use their phone to take a phone call.

Kylie Davis: (05:40)

Most of us don't use our phones for that anymore. And in fact, millennials and Gen Z's have no intention of ever answering the phone when it rings. So in real estate land, there's this real disconnect going on and we'll explore that a little bit. And what we see is that the technology has given individuals through their phones, through this computer in their pocket, extraordinary power. We're seeing that we're now... And that's happening at the same time that power is shifting away from institutions, and we saw this during the bushfires that our institutions are often the ones that cannot help us, but this power to connect and this power to socialise and this power to rally of individuals together has become exceptionally strong.

Kylie Davis: (06:26)

We saw that with Celeste Barber's extraordinary fundraiser raising $50 million just on her Facebook page and another $10 million through the concert. We saw it through initiatives like Go with MTS Skis, through Shop the Bush, Phoenix Market from Sarah and her team, which was amazing. All these sorts of initiatives popping up to encourage people to act and to not feel helpless. And we're seeing that across our whole landscape, global landscape at the moment, that legislation takes far too long, that our leadership is not proactive enough while individuals are rallying together and becoming active.

Kylie Davis: (07:08)

But what we see in real estate is that while everyone else is going mobile and mobile for them means computer in their pocket, not mobile phone in their pocket, inside the real estate space, the estimates that I've seen is that 65% of the technology that we're still using is desktop-based. So we're in an industry that is using desktop dominant technology and that's our work reality.

Kylie Davis: (07:34)

So while everyone else is doing everything else on their mobile phone, we have to go back to the office or we have to phone someone to go back to do something in the office. Everything is coming back down to this. We have to go back to the office because we're not using the technology that is out there that could really service us to deliver a truly mobile experience.

Kylie Davis: (07:58)

So how does that work for us? Well, the research that I did when I was at CoreLogic showed that it's not great from a service level. Sellers have 36% average to poor service. That's more than a third of the market that is one of our primary income generators. A third of our clients are not happy with us. Investors or landlords, 56% of them think that the service that they get is average to poor. So more than half. And what we have in real estate is a two legged stool in terms of our income and revenue. And when you have a two-legged stool, it's going to fall over.

Kylie Davis: (08:32)

We only have revenue coming from the commissions that we make from sellers and the payments or the commissions that we make from investors. And when we look at the other two legs that could be on our stool of buyers, 42% of them think our service is average to poor and 65% of tenants think our service is average to poor. They'd stab you as soon as they walk past you in the street, some poor old tenants. So how do we use the technology that's out there? How do we make the technology work for us to help our agents deliver the service that they need to? Let's just pause there for a moment and hear a quick word from our sponsors.

Kylie Davis: (09:20)

If your business is growing quickly, you need to scale your team. Beepo is an Australian outsourcing company that specialises in helping real estate and technology businesses to grow. Outsourcing is not just about bringing on staff with a lower cost base, Beepo recruits some managing staff based in the Philippines who will become full time members of your team. They will help you identify this case skill sets, the employment history and other attributes that you need from your employees and match your requirements with the right staff.

Kylie Davis: (09:51)

Beepo will also help you to break down your structure, job descriptions, task management, and to understand how having a virtual team fits into your organisation. Done properly, outsourcing can help you understand the internal processes of your business, drive your efficiency, and provide you with a roadmap for growth. So talk to Beepo and scale your business for success.

Kylie Davis: (10:14)

And what we need to get really honest about is just how shitty the process of real estate is right now. So real estate, the way we transact real estate, whether it's in property management or whether it's in sales, really is quite shitty. And that's a word I've stolen from Brad Inman from Inman Connect in Vegas last year. But why is it like that? In Australia, all we've done really is replace fax machines with email. Our systems are really opaque. It's centralised communication. Everything has to go through the agent.

Kylie Davis: (10:46)

There's lots of legislation and contracts which always makes it feel very risky. There's hundreds, thousands every year of manual handoffs where a person has to go from filling in a form in one spot to moving that information into another spot. As an industry, it's extraordinarily psychologically important because home is where the heart is, and we saw that through the bushfires that people truly resonate and become deeply distressed when their home is impacted and selling or moving or changing home is a big impact.

Kylie Davis: (11:18)

It's lots of big dollars and high stakes. In the last 20 years, property prices have more than doubled or tripled. The service levels that we get now are not necessarily any better than they were 20 years ago, but the property prices are certainly significantly more expensive. And of course, because of all of this as agents, we have this extraordinary fear of getting things wrong. So we hold on even tighter to the processes that we've always known because we're worried that we'll be in trouble or be punished if we get stuff wrong. And there's lots of competing interests because how do you actually serve as buyers or tenants when in fact your primary income is coming from sellers and landlords.

Kylie Davis: (11:56)

So these are all the things that make real estate so very difficult for us to do. But I think we have to ask ourselves, how is that working for us? So we've just seen that this insistence on either ignoring the tech or resisting the tech and doing it the way that we've always done it, we have seen that that's not having a great response for our clients. It's making our business models really unstable now, and here are some more statistics for you.

Kylie Davis: (12:28)

In an interview a couple of weeks ago, when I spoke to Angus and Daniel from Real Time Agent, they mentioned that a typical agent spends four hours per property sold. They lose that time in admin. So every property that we sell takes us four hours to administrate. Now, maybe it doesn't take you that time because you've got an assistant, but you're paying for that assistant. So that's not really an efficiency.

Kylie Davis: (12:59)

In property management, it's even worse. 20,000 emails are managed by a property manager in a year. And those poor girls can't even afford to go to the toilet half the time because when they come back, there's a tsunami of issues that are on their desk. But there's an even worse statistic, and this comes from some Victorian research and that is that 13.4 people per 100,000 employees in real estate suicide.

Kylie Davis: (13:26)

And that statistic is the worst of all professions. We are worse even than the police. Why is that? Well, in these times of increasing customer expectations and desire for service against a backdrop of processes that are over 20 years old that are laborious, and time consuming and opaque, and difficult to execute. What happens in the tension of that is that people take it upon themselves to try and compensate for the poor processes and the poor tools that we've got and they're taking it on far too much.

Kylie Davis: (14:09)

Our commitment to amazing service is not the issue. It's some of the processes and the technology that we're using that is no longer fit for purpose to deliver the kinds of experiences that we all agree and are necessary. So we think we really need to agree that that platform is burning. So look, I think we really need to agree that the platform is officially burning and when you're on a burning platform, it's absolutely terrifying because your options are get burned alive or jump into the water where there could be sharks, but we need to take that leap of faith.

Kylie Davis: (14:45)

So there's some other trends going on that are affecting how this is all playing out in real estate. While we're all as individual agents anxious about the tech changes that are out there, I think if you're from one of the big franchise groups or one of the big network groups, you probably are even more terrified.

Kylie Davis: (15:07)

And if you're a selling principle, I really want you to listen up to what's coming. What we're seeing in the US is some three exciting new ideas that are coming out in real estate. The first one is Compass. Now, compass had $1.5 billion invested in it so far from a company called SoftBank and you might have heard of them. SoftBank invested in WeWork, and also in Alibaba. And they're one of the most successful VCs in the world.

Kylie Davis: (15:37)

Compass has a theme which is basically everyone deserves to find their place in the world, and what they're doing is they're talking to agents as much as they're talking to customers or end users of property services because they make their agents into complete rock stars and they claim to have the first end-to-end mobile app that allows agents to do everything that they need to do on a mobile phone.

Kylie Davis: (16:04)

The second one is a company called eXp Realty, which is now here in Australia as well, and eXp Realty has a completely different business model to most franchise groups. What eXp does is that you get paid on revenue not on profit and you also get shares of the company cause it's listed on the NASDAQ. Now, maybe at the last couple of weeks, that doesn't sound like such a great model, but eXp and both Compass and the third one Side all see themselves as tech enablers of agents to give them the tools they need to transact seamlessly in their pockets.

Kylie Davis: (16:38)

When eXp trainers teach you about... They have virtual classrooms and they have four to five sessions a day and when they train you on digital technology, they've got people from Google and Facebook teaching you about that stuff. And the third one is Side, which I mentioned just before. So again, Side is an agency or a group that claims to only represent the top performing agents and their agents transact on average $10 million a year more than anybody else in their markets. And it's a tech stack. It's a white label tech stack.

Kylie Davis: (17:12)

It lets you be an independent agent, but it gives you all the tools and services that you need sitting behind it so that you don't have to worry about that. If you love selling, then you can keep being a sales agent. All three of these options allow that. They let you do what you love as a sales agent. You don't need to take on the drama of running an office in order to take up a seat with one of these models. And this is really challenging our franchise industry.

Kylie Davis: (17:40)

If you've had a look at some of the corporate pages or corporate websites of Australia's franchises, it's worth doing. The language in the majority of them is all about what you can do for them as an agent, like how you will make them amazing. And in return for that you'll get branding, you'll get the colour of your sign, you'll get some guidelines around that, you'll get a little bit of marketing, and you'll get some training.

Kylie Davis: (18:07)

But what we're seeing with these news disruptors coming from the US is that they're enabling agents to do what they do best through technology tools and services. They're extremely customer centric and that customer is the agent in many of those times as well. They're thinking B2B to C. They're thinking head office to agent, to end consumer. They're really strong employers of data and marketing engineers. They have very few BDMs that come from the real estate spice.

Kylie Davis: (18:38)

They old hiring data scientists, and there's a real emphasis on automation and lead capture. That's completely rethinking the business models that they're able to offer. And that's interesting because the second trend that we're seeing is around this property as a service, not a transaction. So at the moment in real estate, we're all focused on the transaction. But where we're seeing this going is increasingly becoming a service, and it's about how we help people find homes, how we help them find how to get at home. And it's happening through three different ways.

Kylie Davis: (19:13)

We're seeing relationships for life becoming part of this model. So it's not just about sellers and landlords, it's about how could you service buyers, how could you better service tenants? And if you're adopting automation, if you've improved your leads, lead gathering, if you're using AI for responding and responding automatically to things, and then tagging and identifying leads better, if you're starting to use the tools as the way they're meant to use, you're freeing up times.

Kylie Davis: (19:43)

So you've then getting more time and resource to start to look at other ways that you can service more clients. So every time you sell a property, what happens? That seller becomes a buyer of the property of their next home. Every time someone buys a property from you, they are probably the next sales lead that you're going to get in seven to 10 years when they finally come to sell that property.

Kylie Davis: (20:06)

But if they've had a terrible experience with you buying, if all they got from you was a set of keys on a plastic key ring handed over to them by a receptionist that they had to go and pick up, then you're never going to be on their list of people to consider when it comes to them selling.

Kylie Davis: (20:24)

We're seeing more and more concierge service and in this property as a service environment, property managers are going to be the absolute lifeblood of every real estate agency. As we automate more work that property managers do, as we start to manage by exception rather than rules and allow people to free up and not have to do everything but start to manage what's going through the pipe, they get to have their time back and then we're going to be able to start to offer services to more clients through our property management teams.

Kylie Davis: (20:55)

Our property management teams, and we saw this through the bushfires have extraordinary ability to help with repairs and maintenance, identify, look after people, connect up services and reconnect services. Why can't we offer those services to buyers as well? Why is it that if I'm spending $400 a week on a property to rent, you'll help me connect up my power and my foxtail and my Wi-Fi and absolutely everything.

Kylie Davis: (21:22)

But if I've spent 400,000 or even four million, I have to do all that myself. It's crazy. Why can't we do it? And as we start to think of this stuff more creatively, we start to find more revenue streams come in. So how do we actually create a structure where we've got clients for life across the four key client categories? How can we be offering those people services that are aligned with our capabilities in managing and selling real estate and helping people find home and start to bring in new revenue around that? Let's just pause there for a moment and hear a quick word from our sponsors.

Kylie Davis: (21:58)

As a real estate agent, you know you need to be doing more content marketing, but creating posts for social media, creating videos and reports is hard work, lots of hard work and it takes time. So that's why you need HomePrezzo. If you're a typical agent posting one or two social media posts a week, HomePrezzo can save you between 75 to a hundred hours a year. How many more properties could you sell if you had that time back? HomePrezzo can help you create engaging informative videos about how the property market in your local suburb is performing.

Kylie Davis: (22:32)

Plus it makes creating suburb reports, rental videos for landlords and social media infographics an absolute piece of cake. If you could type in a suburb or type an address, you can create a Prezzo using HomePrezzo in just a few minutes. Listeners to The PropTech Podcast receive a 14-day free trial. Now, that's twice as long as the normal free trial. So go to homeprezzo.com.au and click the signup button, and use the code PropTech to get your extended free trial or click the link in our show notes.

Kylie Davis: (23:06)

The third trend that we're seeing is this being an AI or an automated agent and being an AI enabled agent. And what we know AI does really well is it's able to respond to inquiries. So somebody sees a property that you've got listed, they fill in a form or they fill in a contact form on realestate.com, it sends a note to you. And at the moment what happens in real estate is that you'll get back to them maybe in four hours, maybe the following day by which time they've probably forgotten the property. But with AI they're responding immediately and they're getting their inquiries dealt with.

Kylie Davis: (23:38)

Those inquiries are also getting matched to your CRM and your database. So do I know this person that's inquired about this property? Have I ever done business with them before? Because if you have, if John Smith actually inquires about 37 Smith Street, and you sold him a property eight years ago, then that's a signal that maybe John's actually back in the market or maybe he's looking to either downsize or maybe he's looking to invest and it will put a tag against that so that you've got an extra recognition of why you need to contact that person.

Kylie Davis: (24:14)

The bots are able to prioritise leads based on propensity and from there they start to automate repetitive tasks which frees you up for more creative problem solving. It frees you up for more relationship building and it lets us monetize our relationships better. And even if you can't go down the whole AI route, if that's too much for you, there are some key automations that we need to be embracing right now in real estate. Let's have a quick look at what they are.

Kylie Davis: (24:43)

The ability to sign on Glass has been around for, I think up to five years. If at the moment you are downloading forms, uploading a form into your CRM, importing the information, then downloading it and attaching it to an email and sending it to your client who then has to download it, fill it in, sign it in print, take a photo copy of it or a photo of it and then send it back to you, please stop that right now.

Kylie Davis: (25:13)

REI Forms, Realworks in Queensland, Forms Live in Melbourne, they are digital platforms that allow you to pull up a record and then automatically send the link straight to your client right now. And you can both reduce the number of steps that it takes to get forms and contracts out to people by at least half and it will improve the turnaround time just exponentially and offered a better experience to your client.

Kylie Davis: (25:41)

We're seeing tech companies like Realtor with its great range of services that let you both handle the sales process end-to-end from appraisals all the way through to sales and to build all your marketing material in one spot and book everything sort of centrally. When we talked the other week to Daniel and Angus at Real Time Agent, again, an end-to-end sales process that lets you manage all of your forms and paperwork and even the auction bids and communicating them out automatically.

Kylie Davis: (26:19)

Market Buy, another great one out of Victoria lets you handle negotiations from your phone and provides a much better experience to the potential buyers by giving them an understanding of where they sit and communicating to them a lot faster. RESO, R-E-S-O from South Australia does a very similar thing. Openn, O-P-E-N-N another one. All great platforms that allow you to handle negotiations on your phone without having to take a phone call, but actually being able to see it.

Kylie Davis: (26:53)

The response that we're seeing from buyers and sellers in this space is that they're actually sharing more information because you're making it a lot easier. And one of the other things this virus makes us look at is how could we make the buyer experience less dependent on open for inspections where with this need to social distance from each other or the technology to do that has been around for ages with virtual tours? So look at Virtual Tours Creator or Diakrit, SMLE companies that are able to help in this space.

Kylie Davis: (27:25)

If you need to automate your marketing, active campaign or HomePrezzo. Now, not all of them are mobile-based technologies, but they're all cloud based so your guys can have their computers at home and be connected to the office and be executing these tasks. But then if you want to go into the full AI space, we see RITA by AIRE. We see Realm Property with their CLAIRE product and there's even Propic which I haven't had to look at yet, but I'm looking forward to checking that out in the next couple of weeks, and I understand that they're doing full AI as well.

Kylie Davis: (27:59)

Here's why we find it hard because we have no muscle tone in this space and it's time now for us to make a change. And I think maybe this period of enforced confinement is a great time for us to start to think about experimenting with some of this tech. We need to differentiate though as an industry between something that doesn't quite work yet because we're not used to it between something completely failing. And so here's how we need to change. We need to not try to introduce something across our entire database on day one.

Kylie Davis: (28:34)

Choose 20 clients or so that you know really well, tell them what you're going to do, work out an experiment that you could do when you identify as some of this technology that you want to play with, and then try a small experiment. Give yourself six weeks. Work out what doesn't work, fix it. Work out what you need to tweak to make it work. Then learn, then repeat it. And then once you've got it to a level with those 20 clients that you think is really great, then scale it across your entire database.

Kylie Davis: (29:02)

What we need to move away from in real estate and our conversations around tech is we need to stop thinking about it as a shiny button that we can push that will make our entire lives amazing. We've been disappointed by that approach far too many times. What we need to come back to is that technology is actually what makes us human or allows us to be more human because property really is personal. We need to come back to this understanding that property is personal, that the only reason people ever transact a property is because something has gone on in their lives that is significant but is deeply emotional.

Kylie Davis: (29:42)

They've either got married or they've moved in with their partner. They've had a baby or they've had baby number three or four. They're downsizing, they're retiring, they're moving for work. All of these things, property is personal and we need to own that again, stop thinking of it as a transaction and helping people come home.

Kylie Davis: (30:04)

Here's what we know in real estate, and Mark Armstrong said this in the interview that I did with him from RateMyAgent, and I thought it was a fantastic quote that, "The people with the most relationships in real estate wins and relationships are infinitely more powerful than transactions when we take a relationship mindset." But here's what we do at the moment because we don't trust the technology, because we have got everything sitting on our desktop, we use our mobile phones because the phone app is the only one that truly works in real estate, and what that does is turn us into a bottleneck. All the communication has to come through us, and that's not right. That's not working for us anymore.

Kylie Davis: (30:46)

We need to use the technology that is available to us right now to start to scale our ability to have relationships, to have more relationships that are better quality with more people, and that's how we're going to really survive it. The biggest challenge that we see in tech is to our leadership and imagination. The biggest challenge of tech is actually to our leadership and our imagination. What we need to do is stop thinking about the shiny buttons that we want to introduce, what we need to stop thinking about is how we can automate everything so we don't have to talk to people. We actually need to think about how we want to have relationships with people, what an amazing experience looks like for us and what our big vision is to deliver an amazing experience to our clients regardless of whether they're sellers, buyers, renters, landlords.

Kylie Davis: (31:44)

We need to start to audit our business for pain points and inefficiencies and now is a great time to do that because those inefficiencies are absolutely obvious if you can't work from home. We need to get clear on how we feel about change and what might be holding us back. We need to look at the technology that will empower our people to be better, not the shiny buttons. And we need to ask ourself what our vision is for making property personal and service oriented.

Kylie Davis: (32:11)

How far away are you from that right now? What needs to happen to get you there? And then answer with what tech could help you. Learn how to implement change in your office. Make someone responsible for introducing change. Make them responsible for identifying the things that aren't working and rolling out tests and experiments. Practise it, test it, measure it, learn it, and then scale it across your business.

Kylie Davis: (32:39)

Where we need to get to as an industry through these businesses is to make real estate amazing. We need to start making people feel great about home and I'm pretty sure that as an industry, especially with a little bit more time on our hands at the moment, now is a perfect time to do that. So is this terrible virus the wake up call that we need? We can't introduce digital policies overnight, but maybe a time that is a little bit quieter with just a little bit less noise will help us take stock and take the time to work out what we could change and how we could implement it and what amazing service experiences could look like in property once this is all over. What do you think?

Kylie Davis: (33:24)

Now, if you've enjoyed this episode of The PropTech Podcast, I would love you to tell your friends or drop me a line by email, LinkedIn, or Facebook, especially with this new format and it's just a one-off and I will only be doing it occasionally. But you can follow this podcast on Spotify, Google Podcasts, and now on Apple iTunes.

Kylie Davis: (33:42)

Coming up in future episodes, we have some great interviews with Adam Campbell from Vaut Real Estate, Ash Farrugia from ActivePipe, and an amazing piece of tech from Planet Ark that I cannot wait to tell you about. I'd like to thank my audio support, Charlie Hollins and the fabulous Jill Escudero and our sponsors, Beepo making outsourcing easy and HomePrezzo turning your data into amazing marketing content. And if you're interested in advertising on The PropTech Podcast, let me know. So thanks everyone. Until next week, keep on propteching.