Impact of the Internet

An Interview with Stefan Swanepoel

Q:  How do you think the Web has impacted the real estate consumers?

Swanepoel: Increased availability of property information has contributed significantly to the fact that online consumers have not only become more knowledgeable, but more demanding, requiring increasingly faster and less expensive real estate service. This in turn has lead to numerous new real estate business models. Many of them, especially the “virtual” type, have not survived the test of time, but have still influenced traditional real estate brokerages to re-engineer their existing businesses to be more Internet, e-Commerce and CRM savvy.

Q: How much of the year-after-year record home sales, for decade-long housing boom as NAR chief economist calls it, do you think the Internet has played a part in? i.e. has the consumer and realty company use of the Web enabled the market to facilitate more deals?

Swanepoel: Without question the Internet has made the search for homes easier and the ability to gain expanded real estate knowledge quicker. However, to think that the Internet has played a leading role in the increased number of home sales is a long reach. This is validated by the fact that most countries across the world do not have the same level of sophistication in their  employment of the Internet and their real estate industries as the US, yet almost all of the major countries have enjoyed a global real estate boom during the past couple of years. The primary driver has unquestionably been the prolonged period of incredibly record-low mortgage rates; in some instances the lowest in 40 years. In today’s terms, this has  made housing the most affordable it has been in years and has greatly facilitated  the America Dream becoming a realty for a large number of families. 

Q: Have the early debates of putting real estate data on the Web changed much in your opinion?

Swanepoel: Superficially it may appear so too many, but fundamentally I don’t think so. The original fear of being disintermediated like travel agents creates initial fear, resistance and concern. However, as illustrated in my 1999 whitepaper, Real Estate confronts Technology, real estate is a “Unique” type commodity, and contrary to the three other Commodity Groups, is the most complex to “Webize.” During the last five years the real estate industry has aggressively moved to rediscover ways to incorporate the Internet and its capabilities into the industry’s “traditional” business model. Therefore I would say that the desire was, and continues to be, the ability to empower the home-buying consumers by providing them more real estate data,  information and a wider selection of homes to choose from –  enabling a better decisions.

Q: How has the Web created a more efficient marketplace for real estate, if indeed it has?

Swanepoel: Without any doubt, the Internet has significantly broadened the minds and business thinking of real estate brokers and sales associates. For the first time since the “100% revolution” of the 1970’s, the industry has been required to think outside the box because it was under “attack.” Previous real estate industry “holey cows” such as the protection of “property for sale information” have now been emancipated and set free, resulting in a more effective marketplace.

Q: How has the Web changed the real estate business?

Swanepoel: The changes introduced into the real estate industry as a result of the Internet can be divided into five stages. Since 1994/5 each of the growth cycles have been 2-3 years long and each had a different impact on how the industry dealt with, implemented and, as a result, matured with the Internet.

The stages were:

1) Traditional  (1994-1996)

2) Entertainment (1996-1998)

3) e-Commerce  (1997-2000)

4) Mobility (2001-2004)

5) Wireless  (2003-today)

Q: What aspect of real estate do you think the Web has had most influence on?

Swanepoel: The restructuring of 1970’s business processes in order to differently identify, market to and communicate with varied client requirements. Email in particular has without a doubt redesigned agent/customer real estate communication forever.

As in other industries that revolve around finding and staying in regular contact with their customers, any new communication medium such as the fax, mobile phone or Internet will play a significant role.  With the advent of the “wireless network,” the options for communication (instantaneous) are multiplying rapidly.

Q: What’s next?

Swanepoel: The continued move towards integrating video, voice and text into one seamless, single device, coupled with improved voice activated software will  afford the  real estate professional of the next ten years the opportunity to become a true  “home-lifestyles advisor,” rather than the sales agent of ten years ago.

For more information about consulting services offered by Stefan’s consulting practice visit www.RealSure.com