I was discussing some of the research I'm doing on various properties with my father yesterday, and he made an interesting comment. He said that "the days of a traditional real estate agent may be short". And if you ponder on that comment, it doesn't take long to realize that he may be right.
Consider that everyone (who has internet access) has the ability to look at the MLS (via their favorite real estate site) and see what's on the market, how long it's been on the market, and (on some sites) what the seller originally paid for the property. One can also research the comps for a property (using Zillow or Eppraisal). These are all things that tweenty years ago, we would have had to have an agent research for us, but no longer.
So why do you need an agent?
Well, at present, the only way to access a home via the lockbox is through the use of a broker or agent... but imagine a system that would allow you to register for an access card that would allow you to view a home on your own. A system where you would use the internet to schedule an appointment (with the seller) to view the home. This way, the seller always knows who's coming and when. The only thing left to do is negotiate a price and sign the contracts... Well, the negotiating can also be done over the internet, and the contracts could be signed using a third party.What would you do with all that money you'd save?
That's right. For the grand privilege of using a real estate agent, the seller pays a 6% commission. Half (3%) goes to the seller's broker/agent and the other half goes to the buyer's broker/agent. In the future, perhaps you'd have only a fixed cost for the contracts and paper work that could be accomplished by the title company or some other agency.
Are "traditional" real estate agents going the way of the Dodo?
(Pictured above is a Dodo, a flightless bird that is now extinct)
2 comments:
You may be right- But a shift that dramatic in the industry would perhaps cause a major finaincial meltdlown akin to the Sub Prime Mess, Imagine Coldwell Banker, Cent.21, Sothebys, all going under? They would do well though to lead the story, by inovating and making them selves necessary, whereas now they are increasingly becoming less so.
Most buyers are not leaglly savy enough to navigate contracts that could get themselves in legal trouble or subject to fraud if entered into without proper training.
You make some interesting points, however, I think the agents would have to reinvent themselves as the transition happens.
Currently, many agents are helping to provide candidates for leasing rental properties. Also, things are very different in the commercial real estate space, so there would be opportunities for some there.
As far as causing a major financial incident, I don't think it would be all that significant. Initially, there would be considerable unemployment, but it would work itself out, as it did for Information Technology Professionals after the Dot Com bust.
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