Real estate has traditionally been a lagging industry when it comes to technology. This is because real estate is a “hand shake” type of industry where a lot of the action comes from relationship building.

Here are just a few examples:

  • Real estate agents and brokers must have good relationships with their clients;
  • Land developers must have good relationships with the local Council and city planners;
  • Investors require excellent rapport with banks and mortgage lenders;
  • Property managers and landlords need good relationships with their tenants and maintenance professionals.

While there have been a number of successful startups on the data side of real estate, the relationship niche has been a tough one to get into. One of the reasons why is because there is a fundamental need to understand the psychology behind the deal.

Sure, a startup founder can create a better version of MLS, or perhaps they target rentals instead of purchases, but does this replace the human interaction that real estate professionals thrive on?

Will a text message or thank you email be as effective as taking a client out for dinner? Likely not.

Implications

Since relationships are so important in real estate, it is sometimes difficult to justify replacing any of the “moving parts” with technology. Either the cost is too high or the technology can’t solve the pain point as efficiently as completing the task manually.

Take for instance the task of showing prospective tenants around a rental property. Sure, there are automated door locking technologies and virtual tours, but these technologies can’t replace the salesmanship of a property manager, leasing agent, or real estate agent. These are the people who close the deal and make the transaction happen.

The startups that have been successful are the ones who understand and embrace relationship building as part of the process.

For example, AirBnB makes being a landlord easier because they act as a very good property manager with a constant inflow of potential tenants. The relationship between the landlord and tenant is strengthened because they are part of an open community with transparent ratings. This relationship is strengthened further because if anything goes wrong, AirBnB is there to mitigate the issue.

Focus On Building the Relationship

Instead of focusing on the relationship itself, perhaps it is useful to find pain points which make the relationship building process easier.

There are many CRM (Customer Relationship Management) tools out there, but why don’t more real estate professionals take advantage of them? There are countless apps which claim they can help realtors make their “on the go” lifestyle more efficient and productive, but why do so many realtors still rely on Excel sheets?

If you’re a startup founder, these are all questions that require further customer discovery. If you’re a real estate professional, may be it’s time to look further into how to build relationships more effectively through technology – any edge, even the slightest, is one worth having.