Ask An Agent: How Does Digital Transformation Impact Real Estate?
Christian Vermast is caught in the middle. As co-senior vice president of sales for Sotheby’s International Real Estate Canada, Vermast finds himself working with both the young and the more traditional consumer. “I have to be able to navigate and relate to both,” he says.
That means he and his business partner Paul Maranger have to innovate to remain relevant. As a result, few know the impact of digital technology on Toronto’s real estate market better, which positions him to expertly answer this week’s question:
What is the impact of digital transformation on the real estate industry and home sales, and what does it mean for potential home buyers going forward?
Digitalization brings information the buyer needs to the forefront when they want it, in detail, to help them make a more intelligent purchasing decision. That’s the most important point of digital technology in the real estate industry.
Accessibility to information, in real time, is the greatest advantage for the buyer. What does that do to the real estate market as a whole? Well, it speeds it up because the faster the information, the more knowledge the consumer has and the more pressure it puts on the real estate professional. So, the whole decision making process becomes faster.
The consumer is becoming more engaged because they have more ammunition, they have more tools in their tool belt and they don’t have to wait for the real estate agent to share information with them. When they start to interact with an agent, they now have a deeper knowledge. You get a smarter consumer, thanks to digitalization, and one that demands a smarter agent.
Real estate professionals should have never been viewed simply as gatekeepers to information. The fact that information wasn’t easily shareable definitely allowed certain professionals to remain relevant, but an agent should be so much more than someone who just shares information. Interpreting information and putting data into perspective so that clients get what they need should be the job of the professional. In other words, navigating the information and dissecting it, so that the buyer knows what is directly relevant to them.
Digitalization also speeds up the transaction, so the realtor has to be ahead of the game. You have to be on the ball more. But that comes with a danger: faster transactions sometimes impair a buyer’s judgement. Real estate is not a straight commodity. There is an emotional and lifestyle involvement. You don’t want to speed up the transaction so much that it becomes simply transactional. This is the risk with digitalization. Speeding up the process and decision making means buyers are constantly in fear of losing out, which leads to hasty decisions.
It’s our job to restore the process to a more human level. Digitalization is not just an advantage. There is a real risk to it, and I see it all the time in negotiations. Because of things like DocuSign, people no longer take the time, as they once did, to think about the next step of negotiation because the timelines are shrinking.
It’s my job to remind them that there’s always going to be another house and they can take their time making decisions, despite the pressure they may feel thanks to the way technology speeds everything up. Remember to put the decision making process into perspective: Why do you want to make this decision today? Is it still going to be the right decision two or three years from now? Buy real estate in a way that the decision you make today is going to still be a good decision in the next five years, especially with transaction costs being so expensive, and I’m not just talking commissions, but also the double land transfer tax in Toronto. A buyer’s decision has to be really mindful.