Resi brokers shouldn’t fight proptech, even if it will cost some their jobs: Thad Wong

“I’m never overly confident that technology cannot replace the broker,” the @properties co-founder said during a forum for brokers

@properties' Thad Wong
@properties' Thad Wong

UPDATE, March 7, 9:50 a.m.: While some real estate industry leaders try to downplay the impact technology is having on the business, @properties co-founder Thad Wong said being clear-eyed about tech and its effects on the industry is the only way to adapt and survive.

“I’m never overly confident that technology cannot replace the broker,” Wong said Tuesday at Chicago Agent Magazine’s Accelerate Summit 2019. “There won’t be the need for as many agents as we have today. … It doesn’t end the brokerage model existence. What it does is it forces the brokerage model to find out how to make money in different ways.”

Technology already has brought sweeping changes to the residential real estate market: Discount brokerage Redfin is cutting into brokers’ listings, Zillow-generated leads are eating away at commissions and i-buyer programs are fundamentally changing a broker’s role in the process.

In the face of the changes, some brokerage leaders have said relationships are still the key to the home-buying process, a reality that will keep brokers central to the business.

Speaking on a panel on the future of real estate technology, Wong said he agrees relationships are the lifeline of the business. But he said technology’s penchant for disruption can’t be ignored.

Understanding how it impacts the business will help pave a way forward for @properties and others, he said.

“When we talk with brokerages, they’re always head-to-head against technology,” he said. “But it’s hard to be against something that benefits the consumer, because then you’re not truly a consumer advocate.”

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Now leading the biggest local brokerage in the Chicago market, Wong and co-founder Michael Golden have credited their early emphasis on tech as a key growth factor. In early 2018, they led an investment effort into an artificial intelligence lead-generating platform that @properties will adopt. Wong and Golden also last year quietly sold a stake of @properties to private equity firm Quad-C, a deal that helped the brokerage expand its investment in technology and marketing tools for its brokers, they said at the time.

Now Wong said his priority at @properties is creating new “value propositions” to give reasons for customers to stick with the traditional broker model.

“It’s the only way to keep the price up as a reasonable price for the consumer to pay for our services — if we can add more value than the alternative,” he said. “That’s hard work, and not everybody is willing to work that hard.”

Wong also has been re-thinking the brokerage model altogether.

One way forward, he said, is for brokerages to move to a “recurring revenue” or subscription model, where brokers act as a “distribution source” for real estate information and services for their clients. Such a model would strengthen the relationship between broker and consumer and increase the likelihood that a consumer will work with that broker when it comes time to buy or sell, Wong said.

“That creates an entirely new revenue solution for brokerages that are dealing with tightening margins,” he said. “Some brokerages will be able to do it, others won’t.”