Build, buy or partner? Creating a real estate technology stack that works

Dan Spillane & Marshall Beck

At a time when virtual home tours, video open houses and remote signings have become the norm, agents and brokers may find themselves searching for the perfect tech tool to meet a particular need.

There is a multitude of options out there waiting for real estate professionals to try, but choosing the right ones can be daunting for an agent or a managing broker. When is it right to try to develop an in-house solution? Should a partnership be formed with a tech company to develop software that can fill a need? Or is it better to simply buy tools from a company that specializes in helping real estate pros solve problems?

As a professional who recently launched her own brokerage, Haley Levine has had to think deeply about the various types of tech tools that have become absolute necessities for real estate agents and brokers this year as the COVID-19 pandemic disrupted the industry.

“The first thing I’m always thinking is that I’m in the real estate business, not the software business,” said the co-founder of HomeCo Chicago. “I’m almost always looking to partner with someone and build off what they have and engage a SaaS [software as a service] product, over developing any type of product for us. If I can identify what our needs are, and there’s something out there that does that or pretty close to it, I think it’s definitely worth partnering or buying or utilizing a product rather than trying to build something.”

But there are times when a custom solution is the best — or only — fit. Here’s a look at how to know what direction to go for your business.

Building a solution

Marshall Beck and Dan Spillane, Dream Town Realty agents and co-founders of the property technology company BrokerAssist, took a hands-on approach to solving a specific problem. Beck observed that many agents were using a scattered approach to technology and adapting multiple solutions that weren’t easily integrated with each other to solve common business problems. Particularly when it came to connecting with clients, agents and brokers typically resorted to a scattershot approach that included elements such as Facebook groups, texts and email systems.

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“There are a lot of inefficiencies I noticed, and we didn’t have the tools to solve” them, Beck said. He noted that these “fractional systems” were an impediment in situations where brokers were regularly helping each other out on deal-specific tasks, “whether it’s covering them when they’re out of town on vacation, or they can’t make it across town for a last-minute showing, or anything and everything to help delight their clients.”

Spillane, Beck’s partner in business and in life, has an extensive background in technology. He set out to build a platform that would enable agents and brokers to leverage help such as virtual assistants across a multitude of needs. The effort resulted in the development of BrokerAssist, an app-management platform that functions as an on-demand referral pipeline and coordinates real-time assistance with functions like in-app chat, payment processing, and the ability to schedule services such as appraisals and showings.

“Those are the types of platforms that I’ve seen in the marketplace grow substantially in other industries,” Spillane said. “Marshall brought this idea to me as a need in the marketplace for him as a broker. I thought, ‘That’s really consistent with the rest of the industries out there.’ Real estate, many times, lags other industries by waiting for some of the best technology to come through, and then they’re fast followers.”

Benefits of partnering

Levine and her business partner, Tony Mattar, operate a small boutique brokerage. To her, partnering with a tech company or purchasing software tools is far more cost-effective than developing her own tools.

“Tech is one of those things where, even if you have the budget and the resources, it is ever-evolving and ever-changing,” Levine said. “Even if you were to spend a couple years and $100,000 building something, it needs to constantly be updated. That’s what these products are doing. Every week, they’re rolling out new updates.”

Levine said she and her partner realized early on that they would need to leverage multiple systems and tools, particularly as a small brokerage. They adopted Slack for their communication needs, then selected a CRM system to integrate their calendar, email and website. She emphasized the need to compete with other proptech companies, as much as with other brokerages.

“I know we all pay for the MLS and it’s there, but it’s really ugly and it’s really not user-friendly,” Levine said. “If we don’t want our clients going on Redfin and Zillow and realtor.com, if people still want to search on their own, we realized that we had to have an IDX website.”

Building for agents’ needs

Plenty of proptech companies are ready to partner with brokerages to broaden the usage of their products. MoxiWorks is a company that initially rose out of Seattle-based Windermere Real Estate’s tech department in 2012 as MoxiPresent. The company focuses on midsize to large brokerages by providing a suite of tools that utilizes a common data cloud. This setup makes their products easier to integrate with 50 partner companies in the real estate tech ecosystem.

“We have the same set of tools you would find from any larger platform provider: websites and CRM presentations, etc.,” said MoxiWorks CEO York Baur. “What makes us different is we focus the agent on the people that they already know and that know, like and trust them. … So much of the industry focuses on lead generation, where we believe that it’s provable statistically that the vast majority of successful agents’ business — individual agents, at least — comes from their sphere of influence.”

MoxiWorks has 250 brokerage clients representing some 350,000 agents. Baur focuses on building partnerships with those brokerages. The company has always taken a white-labeling approach to its products — which allows brokerages to present MoxiWorks tools with their own company branding — to provide added value for clients.

“It does make the conversation easier,” Baur said. “Keep in mind, we’re selling to the brokerage. They’re proud of their brand, and the agent is proud of their brand. It’s important to them, but I think the reason it’s important is also a good reason and that’s why we supported it so early on, and that is that a good brokerage does have a great brand in their community and also with their agents. We’re happy with our brand and we believe it stands for something, but it’s not more important than that brokerage’s brand in their community.”

Levine believes in a strategic approach to choosing tech tools for her agents. “My brokerage is small, and I’m trying to see where we’re falling short,” she said. “Then I’m looking to see if that is something that tech could do, because it’s not going to replace the agent. I think the role of the brokerage is offering as much as they can to make the agent’s life easier and keep them there selling and not doing other things like social media or things that are fun to do but aren’t necessarily producing and are taking time away.”

Beck and Spillane have seen firsthand how brokerages differ in what they expect from tech tools like BrokerAssist. Full-service companies may want total integration with their CRM system, marketing platforms and other programs, while 100% commission brokerages might have agents who produce at dramatically different levels with varying tech needs. Spillane offered a favorable comparison of BrokerAssist’s free-for-agents referral tool to that provided by ReferralExchange, which charges agents as much as 30% of their commission on referrals.

“Part of that is allowing for options whether you are a full-service [company] or not, when it comes to cost of these different vendors,” Spillane said. “For example, our referral network is specifically a connection service. We are integrated with DocuSign for signatures and decent-level [document] tracking capabilities, but we’re not a full-service referral network, like ReferralExchange is.”

Improving the landscape

Real estate technology overall is constantly evolving, but both Levine and Spillane feel that client relationship management systems could use an overhaul.

“There are almost so many options out there [that it] is overwhelming,” Levine said of CRM offerings. “They all do pretty much the same thing. In my opinion, they do too many things. It’d be great to see a product that was almost simpler. I think less is more. All every agent really needs is a way to grow their database and maintain their database and easier ways to stay in touch with that database.”

Spillane pointed out the lack of integration between CRM systems and the need to synthesize tools to enable practices such as reverse marketing, in which agents take a proactive approach to finding the right buyer for a property.

“I think the CRMs out there vary wildly,” Spillane said. “Dream Town uses a robust CRM that’s as integrated as possible, yet everyone still suffers from multiple points of contact and channels. Even the MLS in Chicago has its own CRM integrated, and you have to have some of that in there to have reverse marketing. So it’s duplicative. If there were some better integration … across the CRM into major systems that we all have to use like MLS, I think that would solve a lot.”

Baur encourages brokerage owners to factor in back-end support and a tech company’s business objective when considering what tools to purchase. He noted that, even though his company works hard to fit products to the needs of its clients, there’s still an out-of-the-box element to consider.

“While it’s highly configurable to our customers’ needs, it is nonetheless a standard software,” Baur said. “We aren’t writing custom software for each customer. Because of that, we have a great set of processes and templates and content and so forth that we’ve developed over time working with our customers, for how to succeed in a deployment, and not just for the initial 90 days, but for the first 12 months and the first 24 months.”