By Al Barbarino
Consumers can shop for just about anything on the Internet. And more and more people are paying for everything from cable, to energy and credit card bills online.
But in many ways the real estate industry is behind the curve when it comes to using the power of the Internet, mobile devices and apps.
Some technology hopefuls are changing that, as industry professionals consider the value of new technologies and a wealth of online real estate services drag real estate into the digital age.
“I felt that real estate was lagging a bit when it came to harnessing the power of the web,” Doug Perlson, founder of RealDirect.com, an online real estate brokerage that lets users buy and sell real estate with the click of a mouse, told Broker’s Weekly in this week’s broker profile.
Companies like RealDirect.com, and competitors RedFin and Zillow, and are among the online brokerages that aim to offer the ease of the Internet without sacrificing the hands-on attention many homebuyers demand. But the idea is not to replace traditional brokerages.
“We respect the job of the real estate broker and agent and… we truly appreciate it,” Perlson said. “We think tech can provide efficiencies that will help us to do our jobs better, and if we can do that we are able to make the buyer and seller happier.”
The so-called “Generation Y’ers,” aged roughly 21 to 35 years old, are an obvious target for the online services and apps that have flooded the market. For many young, first-time renters, the act of mailing a rent check to a landlord seems tedious, if not archaic.
You don’t need to be a social scientist to understand that the older people are, the less likely they are to embrace the new; but you also don’t need to plaster Justin Beiber posters across your walls to be familiar with the advantages of web-based payments.
And while teens and Generation Y use the Internet most for socializing and entertainment, older generations use it more as a tool for information, emailing, and buying products, according to recent data from the Pew Research Center.
Members of Generation X, aged roughly 36 to 47 years old, are significantly more likely than any other generation to do their banking and shopping online, the Pew Research Center data shows.
Specifically, 80 percent and 65 percent of Generation X’ers shop and bank online, respectively, compared with 71 and 57 percent, among Generation Y’ers. Regardless of age, New Yorkers can relate to the sometimes-irritating process of writing a rent check and then having to wait several days – if not weeks — for the deduction to hit their bank accounts.
That’s why web platforms like KliknPay and ClickPay Services, Inc. have come online to give landlords the ability to safely and securely offer online rent and other payments.
“I think old habits die hard,” said David Schwartz, founder and principal of Sugar Hill Capital Partners, an investment and asset management firm that started using ClickPay almost one year ago.
Sugar Hill operates 30 buildings and some 600 units in Harlem and Brooklyn, and since introducing online rent payment, roughly 25 percent of Sugar Hill’s tenancy has started to pay online, Schwartz said.
“We are very tech-oriented, everything is in the Cloud, and we believe tech makes us different and gives us an advantage,” he said. “The experience has been very, very good, and it’s really all about giving tenants more choices.”
The ClickPay platform allows tenants to make electronic real estate-related payments via ipad, computer or mobile device, with the balance hitting accounts within 48 hours.
ClickPay, with clients now spanning 40 states, has nearly doubled its business in the last year, and has accepted payments from more than 200,000 units. “It’s like an E-ZPass for rental payments,” said Tom Keirnan, who founded ClickPay in 2009 with Steven Van Praagh, referring to the popular electronic highway toll collection system.
In the past, Keirnan built secure web and e-commerce systems for the likes of banking and retail bigs like AMEX, Home Depot and Macy’s.
Resistance to change in the real estate world, particularly in New York, and specifically among landlords, stems from some of the legal complexities surrounding rental and leasing agreements.
But that’s changing, Kiernan said, as “tenants are demanding it, and that demand is being fueled by online shopping and banking.” Property managers can also save hundreds and even thousands of dollars a year using paperless billing, he added.
The tide is turning. Real estate consultants Jack Jaffa & Associates is another company that has embraced online bill-pay methods, recently partnering with the company PayLease to provide clients with online payment options.
“Our management clients are now able to simplify the acceptance and processing of rental payments through an easy-to-use interface,” the firm said in a statement. “This service enables managers to save an enormous amount of time, money, and administrative hassle by streamlining the rental payment process in a manner that benefits both the landlord and tenant.”
In order to reach out to both Generation Y and X, brokers are doing their part to use all the tools needed to compete in a digital world. Smartphones and tablets allow agents to field online queries quickly, which keeps them ahead of competition and prevents the loss of crucial leads.
Tablets, lighter and easier than traditional laptops, are slowly becoming a mainstay, as agents can show renters listings with ease and to stay on top of advertising on social media platforms, oft frequented by both Generation Y and X. “That’s just the direction the world is going in,” Keirnan, of ClickPay said.