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Mortgage brokers must move away from the traditional “single commission payment” model to keep up with changing human behaviour, according to CoreLogic RP Data.
A new form of remuneration is emerging in the mortgage and real estate industries, driven by rapid changes in technology that are having a major impact on the way consumers behave, Kylie Davis, head of real estate solutions at CoreLogic RP Data, says.
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Ms Davis identified five major technological trends already impacting real estate agents and mortgage brokers. These are mobile technology, cloud computing, connected communities, big data and electronic servants.
“These technology mega trends have changed human behaviour, increasing our capacity to absorb information and do tasks in moments that were previously considered as downtime,” Ms Davis said.
“They are also raising our expectations of what constitutes good service, while lowering our tolerance of poor experiences and reducing the time we expect to spend learning new skills. And all of this is occurring in a world where communication is completely democratised,” she said.
“In such a world, the business model for real estate agents and property finance professionals needs to adapt, moving away from being a single commission payment for the service of marketing a home or determining a mortgage, with high stress and low confidence.”
In place of this system, Ms Davis said a multiple-payment model from a portfolio of services, which deliver the outcome of a successful move from one property or lifestyle type to another, is evolving.
“This will be done in a way that is focused on maximum value, low stress and high confidence, and a range of service options that can be customised to meet the individual needs of each customer,” she said.
To execute these strategies, real estate and property finance businesses will enter partnerships and relationships that will deliver best-of-breed experiences, both to customers and to their own staff.
Ms Davis believes both agents and brokers are now providing end-to-end service for their customers through the whole ‘journey’, not just for the scope of their traditional service.
“To these ends, property and finance professionals need to embrace a range of new communication deliverables via their websites and social media strategies, which give potential customers transparency around the sales, rental and property management processes and an understanding of the value proposition being offered.”
Ms Davis said the challenge for business owners and CEOs is to focus not on the technology itself, but also on rigorously managing change programs with staff as they eliminate business pain points.
“In the not-too-distant future – we are starting to see the effects already – business differentiation will be determined not just by the services offered, but also by the speed to execute new innovations in service and an ongoing mindset of change through build, measure, learn and repeat.”
[Related: Lawyer warns against FOFA-style reforms in broking]
