automatic valuation

Overcoming Opposition to Automatic Valuation Models in Commercial Real Estate

As professionals with an interest in PropTech, most of us are open to the idea that the right technology implemented in the correct way can enhance our ability to perform our jobs. However, we are also the sort of people who take time out of our days to follow PropTech media online. Clearly, we don’t represent everyone who works in real estate. In fact, many of us have seen firsthand just how resistant some real estate pros can be to the idea that tech, and in particular workflow-disrupting tech like automation and AI, is sometimes a great idea.

While it is easy to assume that tech-shy professionals are older, less sophisticated, or otherwise “behind the curve,” the truth is that even high-performing and tech-savvy young professionals who are otherwise very open to new ideas can sometimes find PropTech adoption a difficult pill to swallow.

Needless to say, this is a critical issue regardless of your role in the industry. For PropTech providers, adoption reluctance is a direct obstacle to sales success. If you have a more traditional real estate role, it could spell inefficiency and a missed advantage for your team—something I discussed in my recent Metatrends piece on automation. In this article, I’ll outline four of the root causes for adoption hesitation, as well as workaround strategies for each objection.

Objection 1: Don’t fix what isn’t broken

A broker has worked hard for years and they’re finally seeing their efforts pay off. Their workflow is well-oiled, they know all the players in their market, and they’ve finally been able to achieve a semblance of a work-life balance. This is likely the minimum experience floor for the tech adoption shot callers on most teams, the greenhorn analyst isn’t usually the one deciding which CRM or tech platform to use. And that’s the issue: most of these decision makers are people who have become successful by doing things a certain way. Even if deficiencies are identified in a process, it’s still time-tested, proven, and comfortable.

Overcoming this objection requires demonstrating that the workflow or process being used is, in fact, broken. No easy task in any field, let alone one as ego-driven as real estate. So start small. Show that tiny bits of their approach could be made more accurate, efficient, or easier. This is part of the approach recommended in an industry-agnostic 2017 Forbes article on driving tech adoption. By showing that there is room for improvement, you’ll open the door to tech acceptance.

Objection 2: Once bitten, twice shy

Perhaps a real estate pro was once an early adopter. At some point in their career, they tried to take advantage of a new PropTech platform, whatever it may have been. But things didn’t quite work out. Maybe the system was too complicated; perhaps it was underpowered. Perhaps the learning curve was too high. Perhaps it did work – just not well enough to justify the price tag. All that this professional was left with was a year-long contract and a tarnished reputation as “tech guy” in his office. At Propmodo’s recent Metatrends event in New York City, real estate data company Cherre’s co-founder L.D. Salmanson eloquently explained the issue: “All these [PropTech] companies come up and promise the world and just don’t succeed”.

In order to get around this hesitation, try to show that their specific concerns have answers. If you’re pitching a product or service, take more time for Q&A. If you are advocating for the addition of a platform for your own team, be willing to take responsibility for the possible risks the platform could bring (and needless to say, be confident in whatever you’re supporting).

Objection 3: Dependence doubts

At the beginning of this article, I mentioned that plenty of PropTech-shy professionals might be perfectly technically literate. That’s actually the problem for the second two objections. These people know that PropTech is powerful, capable of adding efficiency, and accessible to their teams. However, they interpret those facts through a different lens. Seeing just how effective a given PropTech system could be, this type of pro worries that his team would get “hooked,” stuck using a system of dubious staying power; a system that could get bought out and shut down or otherwise fizzle out on its own. This is certainly not a position any real estate team wants to be in, and for many out there, continuing to do things the old-fashioned way is a safer option than risking the loss of skills that end up being necessary after all.

Of course, the most direct way to handle these objections is to demonstrate the stability of the tech product or service in question. Defraying fears of closure or service downtime will go a long way to diminishing the strategic concerns of your prospect or team member, but it doesn’t stop there. Keep in mind that advanced or automated techniques need not fully supplant “analog” methods. Like learning long division, at a certain point, it becomes the individual’s choice whether to keep those skills alive.

Objection 4: Fear of obsoletion

The most visceral response may come from individuals or teams who are worried about being replaced. Like automotive workers or farmers before them, these people fear that the rise of strong PropTech platforms could spell disaster for their careers, whether they are appraisers, brokers, assistants, or whatever else. Writing for the World Economic Forum, tech policy expert Calestous Juma said “society tends to reject new technologies when they substitute for, rather than augment, our humanity.” In a way, this is the hardest of the objections to overcome, because it turns the effectiveness of a given platform (the platform’s exact value proposition, its greatest strength) into a direct challenge to overcome.

And of course, there are no real guarantees that certain tech advances won’t end up with some professionals seeing their roles shift or even disappear. But it doesn’t always have to be a bad thing. Change has been steadily coming to our industry, and in plenty of places it is already here. These new tech systems will give numerous professionals the opportunity to reinvent themselves, spending more of their time on work that is hopefully more interesting and certainly less repetitive. Focus on those opportunities at the individual level, and encourage individuals who worry for the future of their careers to consider where they could take their roles with more time and bandwidth every day.

These are just four of a huge number of adoption objections. What’s more, most individuals who have legitimate PropTech concerns will likely demonstrate a mix of the above. Unique combinations of concerns will require highly personalized responses to overcome. Whether you’re a PropTech professional or part of a related field, consider yourself an advocate for advancement in the industry. Armed with a few new strategies for overcoming adoption hesitation, hopefully your efforts will be that much more successful the next time you’re called on to advocate for a tech product you support.

Associate Publisher

Your email address will not be published. Required fields are marked *

Propmodo is a global multimedia effort to explore how emerging technologies affect our built environment.

More Stories
Flexible Office Design Adapts to Fast Moving Companies and Employees