Swanepoel Trends ReportSwanepoel Trends Swanepoel Trends Report 2018 $179.95 ISBN 978-0-9777634-9-8 T3 Sixty 59999> Research • Analysis • Solutions t360.com 9 780977 763498 2018 “Comprehensive research and strategic planning are indispensable for future real estate success. The Swanepoel Trends Report represents the gold standard for third party independent scholarship pertaining to this all-important process.” Gino Blefari, CEO, HSF Affiliates “The Swanepoel Trends Report is one of the most important and influen- tial analyses available in real estate. I always enjoy reading it, and it helps shape the future of our industry. Thanks to Stefan and the entire team at T3 Sixty for the hard work that goes into this report. Our industry is grateful for it.” Spencer Rascoff, CEO, Zillow Group “In my position, I need to always be looking around corners to see what’s coming next. The Swanepoel Trends Report is like having a mirror on the end of a 10-foot pole.” Geoff Lewis, President, Re/Max “The information provided in the Swanepoel Trends Report is invaluable to our industry. Stefan’s presentation of factual analysis related to events, ideas, and technology, which inform the direction of our businesses, is second to none. I keep it on my desk all year long and encourage everyone who wishes to remain relevant tomorrow to absorb the information today.” Sue Yannaccone, President & CEO, ERA Franchise Systems “We greatly value the Swanepoel Trends Report. I have always felt Stefan’s work is critically important to our industry because of his unique insights and desire to go beyond the metrics we all routinely look at. While there is quite a lot of industry discussion about disruptors, impact of technol- ogy and the emergence of millennials, it challenges us to think differently and offers unique ideas, suggestions and potential solutions.” Charlie Young, President & CEO, Coldwell Banker Real Estate “To hell with CNN, we should all turn to you for updates.” Scott Stulich, Broker, Home Selling Assistance Platinum, Maryland “The Swanepoel Trends Report is ‘the’ go-to book on what is happening within the industry, a great source of real information to help brokers and brands plan for what lies ahead. I have been a subscriber since inception. It gets better and better every year.” Sherry Chris, President & CEO, Better Homes and Gardens Real Estate “We are successful because of the decisions we make each day. The Swanepoel Trends Report isn’t just about the future – it’s about what is happening now. It’s reflective of those decisions being made now. Stefan challenges us to use this invaluable information to give us the ability to make it happen NOW. It is mandatory reading for our senior leadership. Stefan’s research helps us all think about what needs to happen now and in the future.” Helen Hanna Casey, President, Howard Hanna Real Estate Services “The Swanepoel Trends Report and the T3 Summit always deliver. They provide important and insightful analysis about the trends, people and companies in the real estate business.” Ryan O’Hara, CEO, Move, Inc. “The Swanepoel Trends Report is always one of my ‘go to’ reference guides regarding future trends in the real estate vertical. Truly a phenom- enal resource and one that provides great insight and value.” Bob Goldberg, CEO, National Association of Realtors “The Swanepoel Trends Report is the industry’s premier report regarding the key factors shaping the real estate business. It serves as a mirror to ensure that we continue to be a highly successful real estate company.” Lennox Scott, CEO, John L. Scott Real Estate “The market to come is anybody’s guess. However, your estimate and forecast hold the highest chance of being correct.” Paul J. Wells, Broker & Owner, Re/Max Northern Illinois “Stefan’s thoughtful, comprehensive and often eye-opening insights add tremendous value to our strategic thinking and business decision-making.” Pam O’Connor, President & CEO, Leading Real Estate Companies of the World “The Swanepoel Trends Report sets a new standard for research on indus- try trends. I keep a copy on my desk, which I utilize often and share with my leadership, members and staff.” Bob Hale, CEO, Houston Association of Realtors 2018 Swanepoel Trends Report 13th Annual Edition T3 Sixty Research, Analysis, Solutions Swanepoel Trends Report Bronze medalist for best business reference, AXIOM Business Book Awards Editorial Team Except as permitted under the United States Copyright Act of 1976, no part of this publica- tion may be reproduced or distributed in any form or by any means or stored in a database or Editor-in-Chief retrieval system without the prior written permission of the publisher. Images may be protected Stefan Swanepoel by copyright and should not be used without approval. Most of the companies mentioned in this report own numerous trademarks and other marks. Executive Editor This report, the publishers, the author, the contributors or any other party involved in this Paul Hagey Report in any way, will not seek to challenge or dilute any of these marks. Specifically, Realtor is a registered trademark of the National Association of Realtors. Managing Editor Aman Daro Limit of Liability / Disclaimer of Warranty: Contributing Editor While the publisher, authors, contributors and editors have used their best efforts to present Jeremy Conaway neutral, accurate, and reasonable views of the industry and its participants, they make no representation or warranties with respect to the accuracy or completeness of the contents of Technology Editor each publication and specifically disclaim any implied warranties. Jack Miller T3 Sixty serves many companies and organizations stated in this report as a management consulting firm and may also, from time to time, be an investor in some of the companies Staff Writers mentioned in this report. However, no confidential information or information covered by a Michele Conn, Jack Miller, Kevin McQueen, nondisclosure agreement was used. Thomas Mitchell and Tinus Swanepoel References to companies, products and services also do not constitute or imply endorsement, Contributors and neither is any reference or absence of reference intended to harm, advantage or disad- Russ Cofano, Rob Hahn and Amber Taufen vantage a company or person. The publishers, editorial team and T3 Sixty shall not be liable for any loss or any other commercial damages, including but not limited to special, incidental, Design consequential or other damages. Faire Projects Editorial Assistant Karen Smith Published by RealSure, Inc and T3 Sixty, LLC 29222 Rancho Viejo Rd, Suite 221 San Juan Capistrano, CA 92675 949.627.8877 t360.com ISBN 978-0-9777-634-9-8 Price $179.95 USA Printed in the United States of America Copyright © 2018 by RealSure, Inc. All rights reserved. Table of Contents viii Foreword by Glenn Kelman xi Preface by Stefan Swanepoel 12 Trend 10 Tightening of the Digital Grip 32 Trend 09 The Complex World of Commercial Real Estate 54 Trend 08 Smart CRMs Go Mainstream 70 Trend 07 The Big Four of Digital Real Estate 94 Trend 06 Design as a Service 112 Trend 05 Brokerage M&A Momentum Broadens 128 Trend 04 The Management-Empowered Brokerage Business Model 148 Trend 03 Rise of the Modern Discount Brokerage 170 Trend 02 Enter the Direct Buyer 186 Trend 01 Follow the Money viii Foreword The Fortress and the Ecosystem It was a strange request. Out of the blue, a competing broker invited me to lunch. He was on one side of the lake that divides Seattle, and I was on the other, so he and his partner of- fered to meet on an island in the middle. Driving over the bridge, it bothered me that I was apprehensive. Why should I feel that way? When I sat down, the broker spread his firm’s training materials before me. He wasn’t arguing that his agents were better than Redfin’s. He only wanted me to know that, for all of Redfin’s claims about prioritizing customers over commis- sions, his agents were also trained to put customers first. I looked through his materials, which I would have been proud to use to train Redfin’s agents. My face turned pink. I said I was sorry for claiming that Redfin’s agents had different mo- tivations than the agents at his firm. And, though we pay our agents differently, I’ve never made such claims again. What was most remarkable was what happened next: He accepted the apol- ogy. He gave me a chance to change and, over time, to belong to this industry. It’s rare for anyone, a spouse or a friend let alone a rival, to be willing to look at another person in a different light. That was a decade ago. I still think about that lunch when reading bedtime books to my boys, who often interrupt to ask about each character: “Is he bad or good?” Whatever the moral is supposed to be, the story also trains us from the earliest age to sort people into heroes and villains. The “I” in the story is always the hero. This is why my then 7-year-old began to recognize one of his harmless classmates as Harry Potter’s nemesis, Draco Malfoy. It’s why partisan differences prevent Congress from passing commonsense laws. It’s why the Packers hate the Vikings. And it’s why the real estate industry has sometimes had a siege mentality, with members of the old guard warily eyeing the barbarians at the gate. And it’s why the Swanepoel Trends Report is so valuable. This report isn’t a one- sided defense of traditional real estate, technology, real estate’s practitioners or our critics. It’s written with the savvy of an insider and the curiosity of an out- sider, so that we can see the forces now affecting our industry that have been hidden in plain sight.