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16 April 2024

When web meets property sector

By Graham Norwood

I've given in. At the start of a new decade I've begun an online blog with an obligatory clever title (www.propertynewshound.com) combining real estate and journalism.

My profession has suffered badly in the recession. Newspaper readership is down and many publications have stopped using freelance writers. That dreaded phrase 'reader-generated content' has proliferated, as cheap fillers have been used.

Far-sighted publishers creating websites with substantial content (such as the site you are reading, thank goodness) are therefore well ahead of the game, and everyone senses this is the way of the future for 21st century journalism.

So as a property writer, www.propertynewshound.com seems a sensible and almost inevitable development. But creating the blog made me consider how little the real estate industry's use of new technology has benefited the consumer.

Look at it this way. A decade ago, estate agents worldwide made sure they invested well in the internet; they created their own websites, developed multi-listing services in much of north America and parts of Europe, and pioneered virtual displays of rooms and fly-through visuals to allow you to 'walk' through a home. Developers engineered websites which allowed you to reserve the plot for your home and, if you bought off plan, encouraged you to choose the fixtures and fittings and even the colour scheme for your new home. You could book visits to the physical properties and then even pay a deposit online.

While much of that did indeed benefit consumers, it also saved a lot of money for the realtors and developers. Suddenly, around 2003 to 2005, it became obvious that agents no longer needed to get expensive printed details of every property because so many viewers saw them on the internet. Agents no longer had to post hard copies to would-be buyers and renters because PDFs could be e-mailed to them instead. Viewings were arranged via SMS texting and show houses did not need staffing seven days a week because people could view new homes on the web instead.

But did any of those savings get passed on to the consumer? Well, no they didn't. Pioneering internet sales websites such as Amazon for books and music, or Jamjar for cars, offered substantial savings for buyers when compared with old-fashioned physical shops.

But that didn't happen in the world of property.

Of course, it's unreasonable to expect a house or office to be "reduced" in price just because it is visible on the internet. But agents' fees have not fallen, nor have the purchase costs and legal fees attached to buying a new property – even though many of these activities have become much less labour-intensive and much easier to complete thanks to the technology that emerged in the period from 2000 to 2009.

Why has the buyer or seller not benefited in financial terms, to complement the far greater level of information they can get from their laptops, PCs and Macs?

Well, the property industry has a ready set of excuses. But that's all they are – excuses.

Estate agents and developers say they have never had as informed a clientele as today, as prospective buyers and renters have better data on individual property prices and the broader market as a result of easy-access TV and online outlets.

They also point out that percentage commission rates paid to agents across the world have not changed much. What they forget to say, of course, is that capital values of property in most countries have soared, even taking into account the past two years of price falls. As a result, that apparently 'static' percentage fee actually means consumers actually pay more than before.

These excuses are a public relations own goal for realtors and developers, who (with the notable exception of north America) are far behind other consumer-oriented industries.

In the UK, estate agents in central London and the expensive parts of the countryside are typically very good but when you wander into almost any other part of the nation, the service you receive suddenly becomes very poor. Developers are not much better, which is why complaints against them have soared in number in recent years.

Sharing this "technology dividend" with buyers and sellers – perhaps by reducing fees for those clients willing to deal with agents and developers via text and online rather than in person – would be a shrewd move to win back lost public support. Will that happen in this new decade? Don't hold your breath. When it comes to dealing with the public, property professionals appear to still have a lot to learn.

The author is a Property Correspondent for The Observer


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