Real estate CIOs drive deals with data

The residential real estate industry may not be perceived to be as digitally aggressive as Wall Street titans and multinational manufacturing conglomerates. But in reality, some of the largest, most established realty franchises, such as Re/Max and Keller Williams, have made all the right moves, pursuing digital transformations built on the cloud and primed to make the most of emerging AI opportunities.

“The only thing we have on premise, I believe, is a data server with a bunch of unstructured data on it for our legal team,” says Grady Ligon, who was named Re/Max’s first CIO in October 2022. While the Denver-based company’s cloud transformation long preceded Ligon’s arrival, with various business units adopting AWS and the IT team already developing cloud-native applications, in hiring Ligon, Re/Max’s top brass decided to “bring it all under control” of its first CIO.

As for Keller Williams, Chief Technology and Digital Officer Chris Cox sees the cloud as an engine for innovation. “We made a commitment to be truly cloud native and build an architecture that wasn’t burdened by any legacy infrastructure,” says Cox.

Both Ligon’s and Cox’s IT teams have dipped their toes into the AI waters, thanks to their cloud migrations, and plan on seizing on the promise of generative AI to empower the hundreds of thousands of agents and brokers who work in their respective networks as part of longstanding transformational journeys that prove that the residential real estate industry’s digital-fueled AI moment has arrived.

Empowering agents with data

Re/Max’s Ligon, who previously served as CIO of Prudential Real Estate and Berkshire Hathaway Home Services, oversees a cloud estate that includes Oracle Financials, Personify for membership management, and Inside Real Estate, a third-party industry SaaS platform tailored for brokers and agents. The Denver-based realty chain has also developed a homegrown Salesforce-based business intelligence app running off Tableau to power its global network of roughly 145,000 brokers and agents, Ligon says.

The CIO delights in detailing the work of Re/Max’s technology team, which is building the pipelines and cloud-native applications to deliver agents in the field the most refined and insightful data from more than 500 MLS listing serivces in the US and Canada as quickly as possible.

That data team, dubbed ’73 after Re/Max’s 1973 founding year, has about 30 IT pros building sophisticated data architectures and advanced applications, including a cloud-native stack that has been running on AWS for several years.

Its data specialists use Snowflake to craft the architecture and capture a range of data types, from MLS listings to financial transactions, as well as national housing reports and “exhaust data that spits off the consumer-facing website,” Ligon says.

And the crew is using AWS SageMaker machine learning (ML) to give its agents the best local leads and prospective buyers.

Joe Wilhemy, vice president of Re/Max’s business technology and data platforms, says Re/Max has built several machine learning models and adopted one via an acquisition called “first mover score,” which is designed to inform an agent about contacts in their database who are most likely to list their homes in the near future. To bolster its utility for agents, Wilhemy’s data team applied a homegrown ML model that is “intelligent enough to look through data sets” from consumer information providers as well as purchasing history and other behavioral factors, he says.

“We’ve been able to create some models that will analyze things like the listing comments and descriptions and tell you which properties are waterfront or not,” Wilhemy says, adding that such data gives its agents a competitive advantage by enabling them to reach out to a selective set of potential buyers first.

Re/Max’s data chief says he approaches data management in several ways, from streaming MLS data through big data technologies stored in Snowflake, to storing data in relational database data stores.

“We have quite an ecosystem of mostly proprietary systems that we’ve built to ingest all that data in near real-time,” Wilhemy says, noting that the million-plus inventory listings in the US and roughly 150,000 in Canada are all landing on targeted websites based on Re/Max’s data pipelining within 7.5 minutes from the moment the property is listed.

Augmenting real estate relationships with data

Keller Williams, another leading residential player, also kicked off its digital transformation roughly seven years ago. The Austin, Texas franchise-based company’s IT team fuels data to roughly 189,000 agents, including contractors globally, for a cloud-native architecture built on Google Cloud Platform.

“The decision to patiently innovate on our own proprietary technology differentiates us from most other residential branch franchise operations,” says Keller Williams’ Cox, who also partners with DataRobot for generating analytics and AI applications. While Keller Williams also relies on leading SaaS vendors such as Salesforce for core business applications, Cox and team focus on the company’s own proprietary applications for serving agents.

Cox and Dan Djuric, head of enterprise data and advanced analytics at Keller Williams, have built four core cloud-native applications to give agents the most in-depth data to prospect and sell property, generate and convert leads, and provide an improved customer-facing experience with personalization and customization capabilities optimized for lead capture.

The first platform is Command, a 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 brokerages and market centers globally, Cox says.

The third application is its consumer-facing digital platform, called kw.com, which can be customized and be made available through franchise owner branded sites linking agents to local customers. Finally, the IT team developed a digital market center that offers event management as well as training and education content.

Like rivals, Keller Williams will not provide a hardened ROI on a process that is only one part technology and still largely relationship-based between agent and customer. But Cox and Djuric do know that 82% of Keller Williams’ agent have been active on the homegrown CRM application in the past 90 days and can deduce the high value of their data from that statistic alone.

“We’ve been on a journey for the last six years or so to build out our platforms,” says Cox, noting that Keller Williams uses MLS, demographic, product, insurance, and geospatial data globally to fill its data lake. “We have made a tremendous investment in this integrated architecture that sits on the cloud and are aggressively innovating on top of that.”

Cox says his data team has “rationalized” its data architecture, combining multiple data lake instances into smaller data lakes “so we know what data we have and can make it more accessible,” he says.

Many technologies fall under the AI umbrella, and Cox and Djuric say the IT team is pushing harder on refining advanced analytic capabilities, including predictive modeling, as well as machine learning and AI — inclusive of generative AI, Cox says.

One simple use of generative AI, for instance, requires teaching agents how to list their properties in more descriptive ways than in the past. The gen AI model will save agents time and create better listings. “Generative AI engines like ChatGPT will create better and well-crafted descriptions for new listings and put more time on the agent’s calendar,” Cox says.

Will the real estate industry become wholly consumer-driven like CarMax?

Franchisees remain compliant with real estate regulators in each region but are free to innovate. Still, Cox says residential real estate transactions will remain a largely human relationship business unless consumers find it more productive to use technology to buy and sell home.

“Technology is a huge differentiating driving factor, and this is an extremely data-rich business and high transaction volume business,” Cox says. “But the sanctity of the relationship between and agent and their client we take very seriously. There is no intent to disintermediate or get in front of that fiduciary relationship.”

Real estate technology on the move

IDC maintains that residential real estate falls into the domain of the personal and consumer services vertical industry. This industry sector has spent among the least on digital transformations over the past several years, with construction spending roughly $42.6 billion in 2022, resource industries $82.1 billion in 2022, and personal and consumer services at $82.6 billion in 2022.

Re/Max’s Ligon acknowledges the real estate vertical is tough to track because it is fragmented, with each state reporting to its own Board of Realtors.

Additionally, there are hundreds of different MLS listings on different platforms and roughly 100 different CRMs independent franchisees use. The top three industry clouds — Inside Real Estate, Lone Wolf, and Constellation — are likely used by between 65% to 70% of agents, Ligon estimates.

His is a service business and he is only serving the real estate franchisees, their brokers and agents, and a separate mortgage business. But he and others agree that the industry’s use of technology will only continue to grow in volume and sophistication as AI tools evolve and data from many sources continues to accumulate in data lakes.

“At the end of the day, we are a real estate company powered by our own proprietary technology, but it’s going to shift,” Keller William’s Cox says of the overall industry’s use of technology. “In the next few years, I think you’ll find us talking about our technology more aggressively.”