Now, before anyone gets freaked out by the audacity of the software I'm about to review, please note: I highly doubt that an iPhone app can replace the negotiation skills of a real estate agent.
On the other hand, there are three preliminary observations I have:
First, one of the topics that always spurs a great deal of discussion is "Can a computer replace a real estate agent?" This topic is usually met either with "meh" or a great deal of anxiety.
The anxiety is often attached to things like venture capital-funded business models that disintermediate agents; how house buyers and sellers will be duped by algorithms; a loss of human connection to place or space; and good old-fashioned, "If this happens I won't be able to feed my family so this won't happen."
More often a combination of these things is brought up. And then a long argument ensues for several days.
Second, my friends who practice real estate have told me that it is possible to get training in sales and negotiation scripts. This is a good time to remind everyone that I know exactly zilch about buying and selling and negotiating real estate transactions. All I know in this department is what you all tell me. But I've heard that entire systems and training programs exist that present a codified method and coaching system for doing a lot of the stuff around deals and negotiations in real estate.
I'm not saying that any of it works or not -- I wouldn't know. I'm just saying that I've heard it exists and that there are people paying for it and doing it.
Third, I've heard from several real estate practitioners that the other real estate practitioners they've negotiated with sometimes lack the skills necessary to represent clients effectively. Sometimes this is expressed as a shame for consumers; sometimes this is expressed as how awesome one agent is compared to another; and sometimes it is just a casual throwaway comment.
But either way, I've observed real estate professionals noting that there is an uneven distribution of negotiating skills out there and also that consumers might not be well-equipped to determine who has skills versus who has luck versus who is all hat, no cattle.
Taken together, these three observations tell me that:
1. Negotiation will be the last real estate practitioner skill to be digitized into an algorithm.
2. Processes for creating those algorithms already exist.
3. Some real estate practitioners may already perform lower than a preliminary algorithm.
So there's this iPhone app called Negotiate It that exists to help customers negotiate deals on things. No, real estate is not one of the options. It has stuff in it for bank fees and cable bills and that sort of thing.
It operates by encoding a negotiation script that the user can read while negotiating with customer service on speakerphone. It follows a simple decision tree format -- no fancy algorithm is involved.
But the desired end state is a dramatic increase in the user's negotiation capability. Sort of just like a customer service phone rep has a decision tree to follow, now the consumers are armed with their own decision tree. Maybe eventually the decision trees can just be plugged into one another without the people; the company service rep can be laid off and the consumer can spend his time doing something more enjoyable.
Though it operates by script and requires a phone environment (probably wouldn't work as well to read your lines off a phone in a live negotiation), it's a pretty neat idea. Not significantly different than a book of negotiation scripts except that it's built right into the communication tool you use to make the negotiation. The phone numbers to customer service for major banks, cable companies, etc., are even built right into the app.
The software even helps you track how much you are saving. Customers using this software will know whether using the software is worth it -- something I sometimes don't hear consumers say about their real estate agent.
To wrap up: I don't think this stuff is replacing agents today or even tomorrow. But there's something in all of this for you to consider. And I hope it isn't considered solely in terms of a head-in-sand or defensive way. What opportunities does this sort of thing create, as well? For agents? For brokers? For the consultants selling negotiation scripts? For customers?
Gahlord Dewald is the president and janitor of Thoughtfaucet, a strategic creative services company in Burlington, Vt.
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