How real estate has shifted dramatically in the past 5 years 

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People often say the real estate industry is slow to change, but in just the past few years, there have been significant shifts in how business is conducted — especially in the digital realm. 

Since the pandemic, we as an industry have become technologists in more ways that we realize. The rise of the internet and disruptors in previous decades might have foreshadowed that evolution. It certainly primed the pump. 

Here are five ways residential real estate has changed (or continued to change) since 2020.

The rise of the referral model — and fees

For ages, many agents and brokers didn't trust paying upfront for leads. Instead, we told the companies soliciting us that if their offering were so great, we'd be happy to pay a referral fee — and that's just what has happened. 

It began slowly with startups like Movoto but gained momentum when Zillow doubled down on their Flex program and Realtor.com acquired Opcity. Traditional web search platforms aren't the only sources. Media personalities like Glenn Beck and Dave Ramsey have their own referral programs for licensees, effectively monetizing their broadcast audience. 

It's not surprising — technology companies know how to do math. My monthly spend on Zillow Premier Agent advertising was just south of $9,000, and that got my team around 100 new contacts monthly. Under the Flex model, Zillow can make $9,000 on just one or two closed transactions.

Since most online inquiries start out as purchase profiles, it makes sense to me that commissions have not decreased substantially following the court settlements. Agents are working zealously to demonstrate their value in an effort to absorb the fees off the top. 

Digital content can be a king (or queen) maker

Some newer licensees are gaining massive exposure to clients through social media with sometimes offbeat and irreverent content. Many are leapfrogging over veteran agents still stuck in the analog world. 

Realtorkaitlin, Steven Diaz, and Breanna Banaciski are high-profile examples, but not every agent needs 100,000 followers to be successful. Here in Westchester County, Nicole Biello has around 28,000 followers and is growing an admirable brand with G-rated and occasionally light-hearted content that is engaging and clearly effective. 

I asked about her ROI, and she acknowledged that while it looked fun, it takes a lot of work. "If it didn't result in generating clients, I wouldn't devote the effort," she said. 

It doesn't pay to be camera shy these days. If you have the moxie, you can make a big impact in a relatively short time.

E-documents are the norm

Paper files are the new beeper. Online document management and digital signatures are the new mobile phone. Like many industry practices that took some time to germinate, paperless document management started small, with a few early adopters. Today it's used for almost all transactions by nearly every active agent, from the 20-somethings to the octogenarians I manage. 

Occasionally a client prefers ink, but even then their copy is a scanned digital document. Laugh all you want about boomers and their struggles to make a PDF, but you won't find many of them in real estate. 

AI is blowing up

If you think artificial intelligence is relegated to ChatGPT responding to questions in creepily human tones, you're missing the point. An agent in my office recently asked Grok to write an MLS description for a new listing with no prompt other than the address. The copy was high quality, there were no data or specification errors, and the edits took less than 5 minutes. 

I'm seeing agents of all ages effortlessly create training slides, social media posts, marketing copy and virtual staging on their devices with barely a squeak for assistance. Unlike the consternation we feel when we have to adapt to a new MLS platform, machine learning doesn't force the user to pivot — it learns instead. 

AI is also doing a lot of heavy lifting in our interactions with consumers. It is baked into a growing number of CRMs that monitor the predictive analytics of potential transactions, and many real estate websites now employ chatbots that have pretty realistic conversations with online visitors.

Blockchain and crypto have proven their staying power

Vanessa Saunders is a brilliant colleague of mine in New Hampshire who ran her own brokerage for a number of years. She studied blockchain at MIT and had some deep insights into the subtle ways the industry is being affected by technologies most of us find mysterious.

While we won't see many transactions being conducted in Bitcoin or Ethereum anytime soon, she noted that in higher-end markets, the crypto-affluent are converting some of their digital assets into fiat money — a government-issued currency that's not backed by a physical commodity — and then into real estate. 

The federal government has put a stake in the ground as well. In June, the FHFA advised Fannie Mae and Freddie Mac to consider how to use crypto as an asset without requiring its conversion to fiat money in the future.

But the more immediate trend is how blockchain is already being integrated into the title vertical of the transaction. One company to watch is Propy, whose principal shared with me some of the amazing possibilities in this space, such as enabling transaction processes that took days or weeks to be deployed in a matter of minutes — with more security. It is only a matter of time before attorney states like New York adopt the technology as a best practice.

J. Philip Faranda is a manager and associate broker at Howard Hanna | Rand Realty serving Westchester and Putnam Counties, just north of New York City. He was previously a broker-owner at J. Philip Real Estate, the top independent brokerage in the two counties by transaction sides, which he founded in 2005. He also writes a real estate blog which has been cited by major media outlets. The views expressed in this column are solely those of the author.