Will Zillow Replace Realtors? (Future Of Real-Estate Career)
Will Zillow Replace Realtors or Will Real Estate Agents Become Obsolete? The future of real-estate agents is a big issue in the real estate agent career. Is Zillow instant offers a threat to real-estate?
With apps like Zillow, Redfin, and Trulia, I am often asked by people outside the industry, “Aren’t you afraid the real-estate career is threatened?”. My answer is “Not really”. Truth be told, the real-estate agent career is just as vulnerable as any other career to technology, but I’m going to try and break down both sides of the argument:
Ways the traditional real-estate agent could be phased out:
%100 Technology – Literally EVERYTHING is moved online. Everything from the contracts, to the showings, to the appraisal, home inspection will all be moved online. The only issue with this is that there still is physical limitations and robots (or the end user) would have to handle all of this. Not to mention that there is no agent to properly fill out forms and protect the end user from risk. Overall, real-estate is a physical entity and this has yet to be digitized.
Hybrid (Discount broker) – This has already become a reality for the most part, BUT discount brokers makeup a very, very small portion of real-estate sales. There are many reasons that people choose to use discount brokers:
– Discount broker handles very little of the transaction. The vast majority of people aren’t comfortable with this and/or don’t have the time to do showings and stay current on the market, contract, etc.
Corporate Model *In my opinion (IF ANY) this will kill the traditional real-estate agent*
-Redfin is the first company to implement this model. They have %1 selling commission and hire brokers on a salary basis. The only issue with this is that buying brokers still want that juicy %3. Commission based brokers also tend to work way harder because they can make WAY more money. Salaried employees tend to have a totally different mindset.
Reasons why the traditional, commissioned based real-estate agent still exists.
Time – This is the same reason HVAC technicians still exist. People don’t want the hassle of showing the house, understanding contracts, and/or learning real-estate principles.
Moving Parts – In a real-estate transaction, there are MANY moving parts. One thing could cause a transaction to go sour and it’s up to the agent to correct it.
Contracts are complicated – The vast majority of end users have no idea what paper work is involved in real-estate. I’m not a statistician, but there are probably millions of ways to fill out an offer. Not to mention real-estate involves negotiating with other humans.
Risk – End users are usually not comfortable with handling a real-estate transaction.
Loans – VERY few people understand how loans. A real-estate agent can help explain various concepts involved and protect consumers from risk associated with over-leverage.