The residential real estate industry may not seem as digitally active as large financial companies or multinational manufacturing conglomerates. But in reality, some real estate franchises, such as Re/Max and Keller Williams, are very active in pursuing digital innovation based on the cloud and taking advantage of new AI opportunities.

“Now the only enterprise infrastructure equipment we have in-house is a data server for the legal department that contains unstructured data,” said Grady Ligon, who was appointed Remax’s first CIO in October 2022. The Denver-based company's cloud transformation has been underway since before Ligon took the job. Several business units had adopted AWS and the IT team was already developing cloud-native applications. But with the hiring of Ligon, Remax's top management decided to let the company's CIO "control everything."

Chris Cox, Keller Williams' chief technology and digital officer, also sees the cloud as a foundation for innovation. “We’ve been working to build an architecture that is truly cloud native and doesn’t burden existing infrastructure,” Cox said.

The cloud migration helped Ligon and Cox's IT team dive into AI. They are now exploring the possibilities of generative AI that can empower hundreds of thousands of agents and brokers working in their respective networks. This move suggests that the digital-based AI era has arrived in the residential real estate industry.

Empowering Brokers with Data
Remax's Ligon, who previously served as CIO of Prudential Real Estate and Berkshire Hathaway Home Services, oversees Oracle Financial, Personify for membership management, and Inside Real Estate, a third-party industry SaaS platform for brokers and agents. . The Denver-based real estate chain has also developed a homegrown Salesforce-based business intelligence app that runs on Tableau to support its global network of about 145,000 brokers and agents, Ligon said.

CIO Ligon shared details about the work of Remax's technology team. The team built pipelines and cloud-native applications to deliver clean, insight-rich data from more than 500 MLS listings services in the U.S. and Canada to agents in the field as quickly as possible, he said.

The data team, named '73' after Remax's 1973 founding year, has about 30 IT experts who have been building sophisticated data architectures and advanced applications over the years, including a cloud-native stack running on AWS.

The company's data experts use Snowflake to create the architecture and capture a variety of data types, from MLS listings to financial transactions, national housing reports and "debris data spitting out from consumer-facing websites," Rigon explained.

They are also using AWS SageMaker machine learning (ML) to deliver high-quality potential buyer information to agents.

Joe Wilhemy, Remax's vice president of business technology and data platforms, said Remax has also built several machine learning models and a "First Mover Score" that alerts agents to contacts in the database who are likely to list their home for sale in the near future. He said he secured it through acquisition and adopted one of these models. 

Additionally, the company's data team has applied home-grown ML models for agents that are "able to intelligently look at" data sets from consumer information providers, purchase history and other behavioral factors, he said.

“We were able to analyze things like listing comments and descriptions and create some models that tell us which properties are on the waterfront,” says Wilhemi. This data allows agents to first access the choice set of potential buyers. It is said that it provides a competitive advantage by enabling

Remax's data stewards manage data in several ways, from streaming MLS data through big data technology stored in Snowflake to storing data in relational database data stores.

Wilhemi said, “We have built our own system to collect various types of data in close to real time, and we have also built a significant ecosystem related to this,” adding that there are more than 1 million inventory listings in the U.S. and about 150,000 inventory listings in Canada. He explained that it appears on a website based on Remax's data pipeline within 7.5 minutes.

Strengthening intermediary-consumer relationships through data
Keller Williams, another leading real estate company, also began its digital transformation about seven years ago. Headquartered in Austin, Texas, the franchise's IT team supplies data to approximately 189,000 agents, including contractors, around the world on a cloud-native architecture built on Google Cloud Platform.

“What sets us apart from most other residential franchise operations is our decision to be patient and evolve our proprietary technology,” said Cox, whose Keller Williams partner with Data Robotics creates analytics and AI applications. For reference, at the Keller Williams enterprise level, core business applications depend on SaaS vendors such as Salesforce. On the other hand, to service the agent, its own application is used.

Cox and Dan Dijuric, head of enterprise data and advanced analytics at Keller Williams, provide prospects to agents, generate and convert leads, and deliver an enhanced customer experience with personalization and customization optimized for lead acquisition. To do this, we independently built four core cloud native applications. 

The first platform is Command, the core agent-facing CRM that supports Keller Williams agents and real estate teams. The second cloud-native application, called Command Market Center, is a CRM solution for the company's global brokerage and market centers.

The third application is a consumer-facing digital platform called kw.com. This is customized through a franchise owner-branded site that connects agents with local customers. Finally, the IT team developed a digital marketplace center that provides event management as well as training and educational content.

Cox emphasized that technology does not inherently change the process itself, which is based on the relationship between agents and customers. However, Cox and Dijuric emphasized that Keller Williams Agent's 82% has been active in a home-grown CRM application for the past 90 years. The explanation is that these statistics alone show the high value of data.

“We’ve been building the platform for the last six years or so,” Cox said, noting that Keller Williams is using MLS, demographics, product, insurance and geospatial data globally to populate its data lake. “We've invested heavily in this integrated, cloud-based architecture, and now we're innovating even more aggressively.”

Cox went on to say that his data team has "streamlined" its data architecture by combining multiple data lake instances into smaller data lakes. “So we know what data we have and we know what data we can make to make it more accessible,” he said.

Many of the company's technologies now fall into the AI category. Advanced analytics capabilities, including predictive modeling, as well as AI, including generative AI, are steadily improving, Cox said.

For example, one use case for generative AI is targeting agents. By allowing agents to list properties in more detail than before, generative AI models will save agents time and create better listings. “Generative AI engines like ChatGPT create better, well-crafted descriptions for new listings, giving agents more flexibility in their schedules,” Cox said.

Then the real estate industry Change to consumer-led approach like CarMaxWill I do it? Although franchisees are innovating on many fronts, Cox predicts that most residential real estate transactions will remain human-relations businesses.

“Technology is a huge differentiator, and our industry is an extremely data-rich and transactional business,” Cox said. But we take very seriously the sanctity of the relationship between agents and their clients. “There is no intention to stop brokerage or interfere with the fiduciary relationship,” he said.

Technology in the real estate industry is changing
IDC categorizes residential real estate into verticals called personal and consumer services. This industry sector is one that has spent particularly little on digital transformation over the past few years. In 2022, the corresponding expenditures in the construction sector were approximately $42.6 billion, and the resource industry spent $82.1 billion in 2022. Spending in the personal and consumer services sector was $82.6 billion. 

Remax's Ligon said the real estate industry is difficult to track because it is fragmented, with each state reporting to its own real estate commission. There are also hundreds of different MLS listings on different platforms and approximately 100 different CRMs used by independent franchisees. Ligon estimates that the top three industry clouds, including Inside Real Estate, Lone Wolf, and Constellation, are used by 65% to 70% of agents.

However, as AI tools advance and data from various sources continues to accumulate in data lakes, the industry's use of the technology is expected to continue to advance in both quantity and quality, he said.
.
Keller Williams' Cox also analyzed that the pattern of technology use across the industry is changing. “In the next few years, you will see the industry talking more actively about technology,” he said. ciokr@idg.co.k