Do We Still Need Real Estate Agents?
There is growing sentiment that real estate agents will be replaced by technology. There are constant rumors that Zillow will become a real estate brokerage putting agents out of business. There are thoughts that apps will make agents useless. The travel agent, the stockbroker, and many other professions have seen their businesses change forever due to technology advances. Will real estate agents see the same fate?
I do not think so. However, I am a real estate broker, and completely biased on the subject. While I am biassed, I also have a lot of knowledge in regards to the industry. Here are some reasons that real estate agents may not be as replaceable as some may think.
- In most cases the buyer of a home does not pay their agent, the seller does. This makes it a no-brainer for the buyer to use an agent. https://investfourmore.com/2014/03/31/real-estate-agents-get-paid-much/
- Because the buyer gets to use an agent for free, the seller needs to pay for at least the buyer's agent if they want to reach the majority of home buyers.
- It is not in the seller's best interests to let the buyer have representation while they do not. It can cost the seller a lot of money by not knowing how to negotiate price, inspections, appraisals, and more.
- Every house is different. It is in a different location, in different condition, and the seller has different motivations. This makes real estate hard to value. One of the biggest mistakes homeowners make is listing their house for too much or for too little. This one mistake can cost much more than the commission a real estate agent makes.
- The process of selling a home is very complicated. The contracts in most states are over 20 pages long with all the disclosures. Real estate agents have limited ability to practice law if they use state contracts. If a homeowner goes at it alone, they could really mess something up. Not to mention how much time it takes them to figure out everything they need to do. They are usually better off hiring an attorney and then how much money are you saving?
- Besides the contract, there is a lot involved in selling a house from marketing, to showings, to collecting earnest money, chosing a title company, etc..
In the end, it is cheaper to hire a real estate agent to sell or buy a house. Not to mention all the time and headaches they save you. I just did a video on this subject as well.
Good posting here. I agree with all your points. Any problem if I copy and make some modifications and do a similar video and posting?
Sorry, for the late reply! Go ahead
Thought you would enjoy.
https://steemit.com/realestate/@realestatecoach/treat-your-clients-like-you-would-treat-your-mom
This may be very relevant where you are as well. We are seeing more seniors moving to South Carolina because Florida has hurricanes and heavy home owners insurance. In Columbia SC, we avoid almost all hurricanes and typically are not hit hard with tornadoes either. Plus the cost of living is wonderful.
https://steemit.com/living/@realestatecoach/help-seniors-enjoy-homeownership
How does a showing even work without a buyer's agent? I just call up and you give me the key code? That's not going to go very well.
Right, usually the seller has to meet the buyer there, which means they have to aline their schedules and brings in even more problems that I did not even talk about!
Would buyers agents then refuse to show the home if you did that? I didn't know you could do that.
Lots of buyer agents will require the FSBO to sign an agreement that they will pay the buyer agent commission before introducing their buyer to the property. Otherwise, the buyer may be responsible for the commission of their agent depending on the agreement. FSBO often are tough to work with because they are fearful you are taking advantage of them as you have a big knowledge advantage over them. At least that has been my experience. A builder or experienced investor can be a different story and can be a smoother transaction.
Exactly and that is why it is so hard to sell a FSBO when they won't pay buyer's agents.
I agree with you 100%...real estate agents are still needed because they reduce the work that was meant for the buyers to do, of which those apps and technology they claim to have cannot do. Lol, I'm also biased on this cuz I'm a student of estate management and wouldn't like my course of study to go out of fashion
I believe the human side of the agent will keep the agent need for the next few centuries. Now, if AI develops in the way it might, then they would be in trouble.
We are seeing the real estate brokerage model changing heavily. I do think the real estate industry will experience a lot of changes but there is so much involved between emotions, finances, laws, people to coordinate with, schedules, and again emotions when hiccups occurs that I do not see the real estate agent going away. Zillow and Trulia do not really want this either because that is how they get all their data. They leverage the real estate agents efforts by paying for their data and then selling lead data back to them.
Very true on Zillow. It would take so much regulation and management for them to start a brokerage.
Let the pros take over the process.
In as much that this particular group of individuals are a cut or let say eaten more from a deal, they are still very much relevant in this line of business. They sort and connect buyers to what ever kind/type of property needed at any given time.
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Check out Propy.com They are coming for your job..
A lot of companies have tried, but that one is not even meant to replace agents