Real Estate Is Having Its “Model T” Moment

This article was written by Anton Tonev, co-founder of Rexera, who talks about everything real estate-related and the impact of technology on the future of the industry.

It’s been 116 years since Model T, the Ford automobile that set the world in motion, was first introduced. Ford’s revolutionary production techniques and reliability turned the Model T into one of the most influential cars in history. 

Over 19 years, Ford manufactured more than 15 million Model Ts – the number wasn’t surpassed until 1972 and the VW Beetle. Model T also cut the production time from 12.5 hours to 93 minutes in less than five years. 

And this is barely scratching the surface.

Before Model T, the car industry was plagued by inefficiency, long production times, and a lack of standardization, troubling everyone in the automobile purchase equation. 

Notice anything familiar about that? The real estate industry at present falls prey to the same issues.

In a world of horse-drawn carriages, Model T ushered in an era where traveling was easier, faster, and available at scale. Thanks to Ford’s assembly line, the laborious, high-cost car manufacturing process became a smooth sail, putting drivers in their cars faster than ever before. 

The real estate industry is entering a similarly pivotal moment. The challenges of the past are now opportunities to redesign business engines and “drive” homeowners to their dream homes in days, not months.

The Post Model T Era

What happened after Ford equipped every driver with a high-quality vehicle? 

Car prices dropped significantly, taking a toll on Ford’s business. This gloomy picture was complete after competitors caught up and started to deploy their own advancements to the manufacturing process. 

Soon, car producers such as GM, Chrysler, and many now-defunct ones had put their very own mass-manufactured vehicles on the market. The playing field had been leveled.

The large variety of competitor offerings was bad news for lone players in the market. Ford’s dominance waned as customers started looking for something beyond a standard Model T. 

The good news, though, was that the car industry was poised for growth as long as producers could keep their edge and tend to their clients’ tastes.  But only those who continued to adapt quickly and implement organizational and technological breakthroughs remained ahead of the curve. For reference, the number of active automobile manufacturers dropped from 253 in 1908 to 44 in 1929. Today, the top three automotive companies in the U.S. hold 43,41% of the market share. 

 Is It Time for the Real Estate’s Model T? 

If the car manufacturing industry and many others have already paved the path to innovation, why is the real estate industry not following? 

Everything appears to be in check – unlimited funding, a universally bad experience for everyone involved, and government support for change.

I believe there are three reasons why real estate hasn’t caught up yet: 

1. Real estate is the most heterogeneous industry – every property, HOA, municipality, lender, etc., is different. The transaction or loan you are working on today is different from the one tomorrow or yesterday. In contrast, Ford has a dozen models with a few different specifications, and that’s it.
2. Data lives in silos and PDF documents rather than databases. Optimization under these conditions is close to impossible.
3. No backend improvement – the main focus and funding in the industry has been on the end consumer experience. This is the equivalent of crafting a beautiful car body but making no changes to the engine.

A prominent real estate leader puts it nicely: “So far, the industry has used technology to pave the cow’s path.” Yes – we have better-looking software, and yes, we have tasks and notifications and some other bells and whistles, but for the most part, we have been doing things the old way. We have been automating a business process without exploring whether that process is effective or efficient. 

I think an assembly line approach to real estate is the way to rethink how the industry works for the better. Unfortunately, we never had powerful enough technology to build this assembly line. 

Until now. 

Today,  Artificial Intelligence (or AI) can perform an ever-growing set of unique tasks, handle exceptions, and constantly learn from its own experience. It’s like a brilliant teammate who works 24/7 and never gets tired or calls in sick.

How can I be sure this is the right approach?

At Rexera, we’ve always used AI to transform real estate workflows. Yet, the last 18 months have dramatically reshaped our view of what’s possible.

Rexera – the Real Estate’s Model T

Using the latest AI models and infrastructure, we’ve streamlined some of the most challenging real estate workflows. Here are a few examples:

1.  A process with many corner cases now looks like an assembly line with no deviations because your AI teammate handles them for you. Dealing with different properties, HOAs, municipalities, and lenders is streamlined into a single workflow. 
2. Costly errors are gone – multiple levels of AI checks ensure orders of magnitude higher quality control than what we are used to.
3. Hard-to-read and lengthy PDFs no more. Data is extracted, organized, stored, and available at your fingertips. Bonus – insights are there, too, because data is only as good as the decisions it helps us make. 

What does this mean? You can focus on building your business, increasing revenue, spending time with customers, and getting these referrals because the operational aspect of closing a transaction or a loan is fully automated.

Never Waste a Good Crisis

Real estate is tough and relatively unpredictable. When it rains, it pours. And we just went through the most challenging drought in the last thirty years. 

The industry had to go through multiple rounds of layoffs at a moment when it was already struggling to attract talent. It lost great people, probably forever, as they found better opportunities in other sectors. This is what challenging times do to industries – people move to better things and often stay there.  

And what will happen once the rain starts pouring again? The industry will struggle to pick up the pace, not having enough staff to handle the increased volumes of work. 

But we should never waste a good crisis. 

What we have to do is take a step back, and look at what’s available out there and how to apply it to our businesses. 

The Time Has Come

Technology has the potential to handle the unpredictable fluctuations of the real estate market and offer efficient tools for picking up volumes and handling times of drought or pouring rain. AI co-piloting systems can offer support while you’re growing your teams and even be an incentive for attracting new talent. 

The proactive, forward-thinking leaders and companies that show flexibility and take advantage of technology to better their processes will come out stronger. 

The time has come for a Model T moment for the real estate industry. We have the means and the crisis to force us to rethink our ways. 

Join me on this journey as we unpack the new era of real estate – faster, smarter, and more efficient than ever before.

In the meantime, sign up for Rexera’s blog for all the real estate tips on optimizing workflows and keeping your competitive edge.