Are real estate agents necessary? We’re drowning in data…all kinds of data…about every conceivable topic. Whatever the question, Google, Bing or some other place on the web will have an answer. But with an abundance of data come challenges; how to determine credibility, how to understand it, how to organize it and how to apply it. It is entirely possible to have too much data; so much so that a home seller or home buyer in Atlanta can suffer paralysis by analysis. An engaged, professional real estate agent can filter through the mounds of data and ensure that a client acts with full faith and confidence.
The post crash real estate market is nothing like the pre-crash real estate market; and I don’t mean with regard to values. Technology, the internet, mobile phones and transparency have transformed real estate. Despite continued efforts by the real estate industry and the National Association of Realtors to the contrary, the “iron curtain” of secrecy around real estate is being pulled down. Today’s buyers and sellers can access almost as much data as agents…but without the ability to process and apply this valuable information you’re hunting with sling shots instead of sniper rifles.
Buyers have benefited the most from the data explosion. From their couch they can casts wide nets in order to learn as much as possible about what type of property they want, what’s available and what they can afford. Often, they’re not “finding” a place to live as much as they’re “ruling out” places they don’t want to live. This important initial phase has been transformed by the Internet more than any other part of the buying process. Before the technology explosion, the discovery process was very laborious, limited and inefficient; consumers would scout properties by looking at magazines, driving around neighborhoods, talking to friends and family, and looking in the newspaper. Now demographic information for any zip code can be had in seconds.
Agents used to control listings, buyers had to contact them to either review the books (way back) or get emails from the MLS. That’s long over, sites like this allow free MLS searches; buyers see everything an agent does. Today, 98 percent of all home buyers go online to see homes for sale (NAR 2013). They typically browse listings on at least 6 to 12 different sites in their research, considering price, location, photos and visual attractiveness. And 93 percent are self-directed at this point, conducting their research without the help of an agent. Many prefer to remain self-directed so they can educate themselves before committing to a relationship with an agent.
Sellers tend to see the data they want to see, which can lead to problems. Selling a home is more complicated than buying; there are several layers and several outside variables. The abundance of data has empowered sellers, some elect to go it alone or use discount brokerage firms. The challenge for them remains not collecting data, but properly interpreting and applying it. While this clearly isn’t rocket science, there is much more to selling a home that putting in on the MLS and waiting. Sellers need to look at their home as a buyer will; on line, at the photos, read the narratives, pull the demographics and comps. Sellers also have the remember the challenge of dealing with the buyer agent, appraiser, inspector and other people in the mix. Data is a big part, but just as large are all of the steps down the road.
Transparency has disrupted the real estate industry, try as they could NAR and the rest could not stop progress. This is good for the consumers and good for the professional agents. However, the challenge now is for consumers to use this data appropriately.
Disruption is a good thing, especially in real estate. However real estate is a more than booking a flight on line or pricing a car – real estate involves many more variables and no two more unpredictable than buyer and seller. Flat fee and virtual service companies have emerged, discount brokerages, even “full service” firms that offer rebates back to clients. Of course some folks will go that route and in some cases, they will do better than dealing with a sub par opportunity agent and find success. However, cries that the real estate agent is soon to be obsolete do not resonate.
There will always be consumers who can “do it themselves,” and why not let them? If they have the motivation, skills and knowledge, why not? It’s never going to be the norm because the average person doesn’t have the time, can’t keep up with trends or laws or just has no interest in taking on one more thing in their busy lives. Laws change, marketing changes, contracts change, photo quality changes, technology changes, and consumer behavior changes. But for most people dealing with a home purchase a mere 4-5 times in an entire life, keeping up with these changes is not feasible.
I want the smart client, the client that wants to see the data, that wants to discuss a pricing strategy and that has a definition of success. I enjoy the give and take on line with those independent types; I’ve even helped them knowing they were not going to use my services. So what? Does it kill me to toss a line every one in a while? There will be a future for real estate agents and the professional agent will continue to be in the mix. Perhaps in different roles, but still there.