In an interview with the Silicon Valley's San Jose Mercury, ZipRealty's CEO Lanny Baker says there’s a “once-in-history transformation happening in our industry, an industry that historically has been about offices and about paper” as digital offices and mobile devices replace brick-and-mortar brokerages.
Lanny Baker caught the wave three times as the Internet swept across one industry after another, changing everything. As a Wall Street analyst, he covered traditional news media but switched to covering online media when he saw its promise. Then he became chief financial officer of an online recruitment company as the way people found jobs changed. Now he's piloting Emeryville-based ZipRealty through the real estate industry's transition into the digital world. ZipRealty is a tech-driven real estate brokerage that has also developed technology it markets to other companies.
Q: The last few years have gotten very competitive in the real estate industry, with new players and new technology. What are the biggest challenges for any real estate brokerage today?
A: I think the biggest challenge for the brokerage business is this: There's a once-in-history transformation happening in our industry, an industry that historically has been about offices and about paper. The real estate offices being the central place where either agents gather or consumers meet agents is quickly dissipating. It's being replaced by the digital office, the office in your pocket, on your phone.
Q: But the real estate business hasn't been about technology until recently. Is there some reluctance to make the transition?
A: A lot of people in the real estate industry are struggling. They know how to put a sign outside and how to bring in the consumer, but how do they do that online? The big challenge for them is to figure out the digital world. At the same time, consumers are better informed about housing trends and what their property might be worth. So the agents have a new challenge: What service do they provide in an era when the consumer is accessing information directly?
Today's real estate agents have to be savvy in how to use the online tools -- how to use instant notifications to be the first one at a property, and how to use mobile to paint a strong picture of the agent's local knowledge. For decades as an industry, we really haven't invested in those things as much as we have in having big piles of paper and big fancy offices.
Q: So there's a lesser role ahead for the real estate office?
A: Brokerages and agents are asking themselves, is this where we should be investing our resources? There are Internet companies that have become very, very prominent and they don't have any offices -- Zillow and Trulia, the most recognized in the industry, aren't using paper, aren't using offices. They're using technology. For the whole Bay Area, we have three offices, 1,500 square feet each. I'd be very surprised if we had three customers visit those offices in the course of a year. Our agents work remotely, out in the field with the customers.
Q: How do agents feel about ratings? How welcome are reviews of real estate agents?
A: Brokerages in general are not tech companies, and not online companies. They're not comfortable with ratings and reviews. They are quick to say this is not accurate and not helpful. And as experts, they may be right. But an analogy is health information online. It's nowhere near as good as you might get from a doctor, but on the other hand, the availability of information online is better than when there was none.
I think the real estate industry has spent the better part of the last decade trying to fight technology. But who are you kidding? It's going to come. If we as brokers and agents don't embrace and develop it and push it forward, someone else is going to. The change is inevitable. Consumers are asking for this so loudly and so clearly.
Q: Pairing the traditional industry that real estate is with 21st century technology can't be easy.
A: It's a challenge for us. It's not easy for us to run a tech-driven brokerage. We are just now mastering it.
Q: So, if you want to find ZipRealty, look on your mobile phone?
A: Yeah. Three million people are using our website every month, tens of thousands of them actively asking questions of our real estate agents about properties and neighborhoods, writing offers, closing 10,000 transactions. It's all coming from our online and mobile presence. I think we're in the lead. We're one of the more digitally-oriented brokerages, but it's a challenge.
Q: You came to ZipRealty in 2008 from Monster.com, an Internet-based job search site. Was that a big leap for you?
A: I seized on ZipRealty for a couple reasons: One, I thought it was important and still think it is very important to think about the homebuying experience in totality. What I like about ZipRealty's position is that it is a company that delivers the full experience -- the data, the search, the personalization, the accurate insight into what's for sale and what's not for sale. The real estate industry is such a perfect fit for availability of information and insight, for being able to click on a mobile device and talk to an agent about the house you're standing in front of.
Q: What do you see for 2014 for ZipRealty and for Bay Area homeowners and homebuyer?
A: Everything that's going on here -- the technological innovation, wealth creation and the job growth for highly skilled knowledge workers -- paints a very attractive picture for the Bay Area housing market in the coming years.
The above article was written by Pete Carey for The Mercury News. Pete can be followed on Twitter.com/petecarey.