CRM in Real Estate/Property Management: Vertical Markets Spotlight

In an uncertain economy with very high interest rates, large, competitive, and volatile would all be apt adjectives to describe the U.S. real estate market. Given those descriptors, real estate agencies find themselves under intense pressure to identify, nurture, and convert leads. CRM software has the potential to ease those demands, but its use has delivered mixed results thus far.

The real estate market is large. More than 1 million agencies operate in the United States, and in 2024, they are expected to generate $236.4 billion in revenue, according to IBIS. However, sales are growing at a low rate—just 2.2 percent.

Compounding the business challenges, the number of competitors and agents is rising at faster rates, squeezing agencies’ finances and making it difficult to build thriving businesses.

Therefore, they need to adjust. “Financially, real estate companies are prioritizing efficiency over growth in a challenging economy,” notes Mukesh Mirchandani, senior vice president of solution engineering at Freshworks.

REAL ESTATE’S OBSTACLES

Real estate agents face many hurdles in closing each deal. Time management is a big one. Typically, they need to juggle multiple tasks simultaneously, such as meeting clients, showing properties, completing oodles of paperwork, and marketing their services.

Effective communication is also crucial in real estate transactions. Agents must keep clients informed about the status of their property, address their concerns promptly, and maintain clear and transparent communication throughout the buying or selling process. Furthermore, reaching clients in a timely manner can be difficult because individuals and agents have such busy lives and communicate through so many channels.

Real estate transactions also involve extensive paperwork and many types of documents. Tracking such items can be time-consuming and often inefficient.

The industry is closely monitored as well. Agents need to be patient and very detail-oriented to ensure information is accurate and complies with legal and regulatory regulations.

Finally, marketing has never been more important in differentiating and attracting potential buyers and sellers, but it has also become quite complex. Because of the internet, agents have to be available seven days a week, just about 365 days a year. In addition, flexibility is important. They need to be able to contact individuals via text, email, phone call, and other channels.

Essentially, these companies need to work smarter. They must manage their time effectively, prioritize tasks intelligently, and meet deadlines consistently.

After the sale, managing the property and keeping residents happy are other areas of responsibility. Property managers, whether companies or individuals, are expected to continue generating leads by reaching out to prospective residents and effectively marketing the property. Managing a maintenance request for one resident while juggling a lease signing with a future resident is also part of the job.

While there are a lot of CRM systems for the real estate and property management industries, some features are common to them all. For example, most modern CRM providers primarily use the cloud to host, manage, and update their software, which is especially important since employees spend a lot of time away from their desks.

CRM IMPROVES OPERATIONS

CRM has the potential to streamline real estate agent business processes, starting with sales prospecting. “Many real estate firms have been struggling because new inventory is so low, so it becomes important for them to respond to new opportunities immediately,” notes Tami Cannizzaro, chief marketing officer at Thryv, which counts about 100,000 realtors as clients for its CRM products.

Agents deal with multiple clients who are at different stages of the buying or selling process. CRMs help them organize, categorize, and prioritize contact data. These products consolidate customer information and provide agents with a single source of truth and a full 360-degree view of each prospect and customer. The staff then uses the information to cultivate relationships with previous, current, and prospective buyers, sellers, and third parties. These solutions enable them to respond to individuals in a personalized manner; improve the customer and partner experience; cultivate new leads and cohorts; and retain existing ones.

Increasingly, CRM systems have been extended to support real estate marketing and sales initiatives. The goal is to make it easy to visualize and track clients through the sales funnel, from start to finish and ongoing service. The solutions provide agents with integrated sales management, marketing, and customer service features. Tying the traditionally autonomous applications together simplifies processes, boosts conversion rates, and increases client satisfaction.

The extended solutions provide agents, prospects, and clients with more timely information. For instance, Real Geeks CRM automatically notifies agents by email or text whenever the website generates a new lead.

Social media has become a primary way of generating leads. “Realtors want to make sure that their properties are found online,” Cannizzaro says. So realtors use this channel to publish listings, promote showings, and gain followers. They generate content and share industry updates and tips virtually. The idea is to grow agents’ following and nurture prospects into long-term clients.

Thryv real estate CRM, for example, publishes listings on platforms, including Facebook, Twitter, Instagram, Google+, and LinkedIn.

In addition, CRM applications enable realtors to build a local presence in new locations. Lofty’s Social Studio takes the guesswork out of social media engagement by automating the creation and execution of local content.

Other marketing features found in CRMs include the ability to automate the creation of social media ads and generate audience email and other channel lists. A new capability, included in Lone Wolf’s Lion Desk CRM platform, for example, is video texting to nurture leads and showcase properties.

CRM systems enable real estate executives to plan and more closely track their marketing campaigns. These companies use data analytics and artificial intelligence to consolidate information, gauge trends, and make needed adjustments. Realtors collect information about how well the different channels work.

Granular reporting helps to identify pipeline weak points. Lone Wolf’s Property Base includes analytics that help agencies determine the effectiveness of their marketing campaigns. They can track the progress of various channels, and consolidated dashboards illustrate the performance of their marketing campaigns, so they spend their money wisely. Essentially, the analytics improve lead generation.

Real estate companies also deploy CRM solutions to streamline business processes, which increasingly means that artificial intelligence performs tasks and makes decisions that agents or employees previously had done. “In the coming years, I expect that AI-first experiences will drive the real estate and property management industry forward,” said Freshworks’ Mirchandani. These systems automatically send out reminders so agents do not forget an important name, anniversary, event, or task.

The influence of such items has been growing with the latest AI tools, specifically generative AI. These solutions are gaining so much attention because they work with much larger volumes of information (hundreds of billions of words) and larger data models (hundreds of billions of parameters) than previous AI systems. Therefore, they possess impressive and unprecedented power.

The Lofty Assistant, for example, provides a number of automated features. It automatically calls, texts, or emails information, such as a reminder about a meeting later in the day. Agents can query the Lofty knowledge base and learn more about how to execute new or unfamiliar tasks.

Lofty Assistant also fields inbound calls, answers typical questions, and creates new leads based on feedback. If a lead is deemed high-quality and sales-ready, Lofty Assistant can immediately transfer the information to an agent to begin further engagement.

INTEGRATION DEMANDS INCREASE

Legacy systems were designed and run in a vacuum. One department worked with information, but others would know little to nothing about it. CRM tentacles have been branching out, so information flows more freely and easily from one solution to another. For instance, Freshworks has 1,200 application integrations.

Real estate companies, like most vertical industries, have unique needs. Properties are typically listed in Multiple Listing Service. “Another huge driver can be integrations to industry-specific applications, such as lease management apps, property management platforms, and such,” Mirchandani says.

The goal of any CRM deployment in this industry is to provide employees, buyers, and sellers with frictionless connections to all information. However, adding such features has been challenging. Research shows that almost one-third of CRM implementations fail . A few large chains acquired CRM solutions specific to real estate to deliver such capabilities, but experienced mixed results.

In 2019, RE/MAX acquired Booj with the goal of building an end-to-end suite of real estate business applications. Three years later, the real estate franchisor decided to shut down Booj and reduce its workforce by 17 percent by the end of the year.

The realtor replaced that system with Inside Real Estate’s kvCORE, a suite that bundles nine functions, including CRM, web development tools, and a lead-generation application.

In February 2019, Compass acquired Contractually, a real estate CRM software and contact management solution. The solution linked lists of homes sold in an area to other property indexes to determine which properties might be good targets for future listings.

Real estate companies are under pressure to grow their businesses. Increasingly, they rely on their CRM systems to streamline workflow. The systems have become large and complex. In some cases, suppliers have developed their own CRM solutions with mixed results. CRMs have potential to help real estate companies improve their operations. However, these tools are complex, and integrations with new systems can be challenging. 

Paul Korzeniowski is a freelance writer who specializes in technology. He has been covering CRM issues for more than two decades, is based in Sudbury, Mass., and can be reached at paulkorzen@aol.com or on X at @PaulKorzeniowski.