Proptech’s Missed Potential: Why Focusing on Agents Hurt Consumers | Entrepreneur

The Shifting Sands of Proptech: Is a Consumer Focus Finally Taking Hold?

For years, the property technology, or proptech, sector has largely focused on serving the needs of real estate agents and brokerages, often at the expense of the end consumer – the homebuyer or seller. This dynamic, characterized by prioritizing those who pay upfront rather than those who ultimately drive the market, may be undergoing a fundamental shift. While the technology itself has matured, the question of who proptech serves has remained a critical, and often overlooked, factor in its evolution. The industry is beginning to observe a small but growing number of platforms prioritizing the consumer experience, challenging the established model of serving intermediaries first.

A History of Prioritizing the Agent

Venture capital-backed proptech companies historically gravitated towards the fastest source of revenue: real estate agents and brokerages. These entities controlled transactions and possessed readily available budgets for recent tools. The proptech ecosystem became saturated with products designed to enhance agent efficiency and visibility – lead generation platforms, customer relationship management (CRMs) tailored for agents, and brokerage marketing suites. From a business perspective, this made sense; agents were willing to pay recurring subscription fees, creating predictable revenue streams and manageable sales cycles.

However, this focus came at a cost. Every feature developed within this model was evaluated based on its ability to assist agents close more deals or generate more leads, rather than on its potential to lower costs or increase transparency for consumers. This divergence between promise and reality widened the gap between what proptech offered and what buyers and sellers actually received. The costs weren’t eliminated; they were simply passed on to consumers in the form of higher prices and reduced clarity, while the real estate industry continued to tout innovation.

Lessons from Other Disrupted Industries

Other sectors offer instructive parallels. The travel industry, for example, was fundamentally reshaped by platforms like Expedia and Google Flights, which empowered consumers by providing direct access to pricing information and enabling them to bypass travel agents. Similarly, fintech companies like Robinhood, SoFi, and Chime disrupted traditional banking by placing financial tools directly into the hands of consumers, cutting out layers of intermediaries. Real estate proptech had the opportunity to replicate this model, and early platforms like Zillow and Redfin did produce listings more accessible. However, both ultimately funneled consumers back into the traditional agent relationship when it came time to complete a transaction, leaving the underlying structural issues unresolved.

The AI Paradox: Enhancing Existing Incentives

The current excitement surrounding artificial intelligence (AI) in proptech presents a similar challenge. While AI offers impressive capabilities – automated valuations, predictive market analytics, and instant comparable property data – most of these tools are built on platforms originally designed to serve agents. This means that even with AI-powered enhancements, the fundamental incentive structure remains unchanged. AI may lower the cost of information, but if the platform itself is monetized by those who benefit from consumer confusion regarding pricing and processes, the core problem persists. This isn’t disruption; it’s merely an upgrade to the existing system.

As noted in Entrepreneur, AI’s potential in proptech is significant, but its impact is contingent on the underlying business model.

A Consumer-First Approach Gains Traction

However, a shift is underway. A growing number of proptech platforms are beginning to build directly for consumers, adopting business models that align their revenue with a positive end-user experience. This includes flat-fee structures instead of percentage-based commissions, direct access to Multiple Listing Service (MLS) data without requiring an agent, and transaction tools that empower buyers and sellers to control the process.

Companies like Ownli are pioneering this approach, offering a platform that recognizes many buyers and sellers don’t need full-service agent representation for every aspect of a transaction. They provide tools and access for a flat fee, a more transparent model than traditional commissions. Houzeo is another example, offering flat-fee MLS listing services with a seller-focused interface that gives individuals control over showings, pricing, and negotiations. These companies aren’t aiming to dismantle the industry; they’re simply building for the consumer, the party that should have been the focus all along.

The Sutton + myAbode Partnership and Brokerage Consolidation

While a consumer-first approach gains momentum, the industry is also witnessing significant consolidation among brokerages. The recent partnership between Sutton and myAbode, uniting 12,000 brokers on a single platform, as reported by Connect CRE Canada, demonstrates a trend towards larger, more technologically integrated brokerages. This consolidation could potentially accelerate the adoption of proptech solutions designed for agents, but it also raises questions about whether it will further entrench the existing intermediary-focused model.

The Importance of Trust Accounts and Broker Responsibility

The increasing complexity of real estate transactions, coupled with the rise of proptech, also highlights the importance of proper handling of trust accounts. As HousingWire recently reported, even good intentions are not enough to protect brokers from trust account violations. This underscores the need for robust regulatory oversight and compliance measures as proptech continues to evolve.

Looking Ahead: The Future of Proptech

The proptech companies poised for success over the next five years won’t be those that create the most visually appealing dashboards for brokerages. They will be the ones that finally discover how to generate revenue by genuinely improving the experience for the consumer. This is a more challenging business to build – sales cycles are longer, average revenue per user is lower, and access to the existing real estate infrastructure is more limited. However, it’s also the version of proptech that can deliver on the industry’s long-standing promise: a faster, cheaper, and more transparent way to buy or sell a home. The model is proving viable, and now requires more companies willing to embrace it. The Inman 2026 Power Players and New York Power Brokers, as highlighted by Inman Real Estate News, will likely be shaped by this evolving landscape.