(Bloomberg Businessweek) -- Seattle real estate agent Bree Al-Rashid used to spend several hours each week phoning and emailing clients to schedule property tours, producing charts of pricing data in her market, and coordinating house closings. “There were a ton of logistics involved in taking care of customers,” which made her work inefficient, says Al-Rashid, who works for Redfin, an online residential real estate company. Today, many of those tasks are automated on Amazon.com Inc.’s cloud computing network, leaving Al-Rashid more time to meet with clients—and close more deals.
With its emphasis on agents’ personal touch, the real estate industry has been slow to embrace technology. The cloud is appealing because it can handle the back-end functions consumers don’t see: accommodating big swings in traffic caused by the business’s seasonal nature, processing millions of photos, and estimating sale prices in real time using thousands of data points, including comparable sales.
Zillow Group Inc., the biggest U.S. real estate industry website, uses Amazon Web Services (AWS) to manage millions of listings, even for homes that aren’t for sale, including pictures, pricing, neighborhood demographics, and more. Amazon competitors Microsoft Corp. and Alphabet Inc. are also attracting real estate companies. Weichert Realtors uses Microsoft’s cloud product to host millions of images and continues to shift functions onto the service. French real estate website MeilleursAgents SAG—which attracts 1.5 million unique visitors each month to its valuation tool—turned to Alphabet’s Google Cloud Platform to improve speed when traffic grew.
It’s not only cheaper to use cloud computing services such as AWS, it’s also faster, says Satheesh Ravala, senior vice president for cloud engineering and operations at Ellie Mae Inc., a mortgage origination company that uses AWS to automate loan application processing tasks. Outsourcing to the cloud, he says, is “like renting a car vs. building one yourself.” Using AWS, Redfin can monitor the types of photos users spend time on, which can indicate whether they’re a foodie in search of the perfect kitchen, a sports fan looking for a man cave, or a dog owner yearning for a big yard. Says Bridget Frey, Redfin’s chief technology officer: “The website is getting to know the customer before they even meet an agent.”
A homebuyer browsing listings on Redfin’s website can be offered a tour with as little as 45 minutes’ lead time using AWS tools that track the proximity of agents through their smartphones. That’s resulting in more tours, Redfin says: In the first quarter of 2017 the share of home tours booked based on the agent’s location rose to 41 percent, almost double the same period in 2016, according to the company.
Redfin turned to AWS after it realized in 2012 that becoming a more efficient business on its own simply wasn’t feasible. Managing data centers would cost too much, and it didn’t have the capability in-house to develop the many tools Amazon provides. “Along comes AWS, and we’re finally at a place where these things pencil out,” Frey says. “As the cost of computing comes down, you can do a lot more interesting things for customers.”
Founded in Seattle in 2004, Redfin has so far raised $166 million in venture capital and says it’s been able to cut costs because of the tasks it runs on the cloud. That, in turn, has saved customers money. Redfin, which employs its own agents, charges just 1.5 percent commission on the sale of a home in most markets instead of the customary 2.5 percent to 3 percent. In some markets, it’s experimenting with 1 percent.
The bottom line: Real estate companies are using cloud computing to save time and money when buying and selling homes.
To contact the author of this story: Spencer Soper in Seattle at ssoper@bloomberg.net.
To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net.
©2017 Bloomberg L.P.
