Welcome to the digital age of buying and selling real estate.
The age of self-serve buyers is upon us, and soon we'll be telling our grandkids, "back in my day, we would hire a person to help buy and sell our houses. We called them real estate agents."
It's the dawn of a new age, and all the major department stores have self-checkouts, the fast food restaurants have digital self-ordering boards and even the grocery stores let you scan your own purchases. People are being programmed to do the job themselves. The housing market is no different. The need for real estate agents in their current capacity may be coming to an end.
The bygone era of real estate agents
Before the internet really started taking shape, when you wanted to sell or buy a home, you needed to contact a real estate agent to assist you. There was a secret place where all the available homes were kept and only a licensed agent could access it. Interested buyers were not allowed to view this data. This super secret system was known as the Multiple Listing Service or MLS. If you wanted to buy a home, you had two choices: you could spend all weekend driving around looking for "for sale" signs, or you could contact a real estate agent and ask them to find you a home by accessing their secret system. If you wanted to sell a home, the process was basically the same. You needed to find a licensed agent to add your home to the secret system so other agents could find it.
How technology has impacted real estate agents
Nowadays, everything is available online. There are numerous websites for buying and selling homes and the need for a real estate agent or the MLS is quickly diminishing. Millennials, Generation Z and Generation Alpha are born into this new age of technology. At a young age, they quickly become aware that almost everything they need is available digitally. A simple internet search will reveal multiple sites that offer self-service listings for buying and selling homes. So what does the future hold for real estate agents?
One of the biggest issues facing the old-school agent is digital technology. Sure, some agents are attempting to utilize new features like virtual tours and online walkthroughs for buying and selling homes, but in reality, that further proves the usefulness of online resources. These tools are now available to everyone. Given the increasing accessibility to online real estate resources, one of the most obvious questions being asked by consumers is: why not market your own property and save the 3-6% commission that you'd end up paying an agent? Newer generations are more adapted to technology and very comfortable with trading information, products and money digitally. You even see properties being marketed on social media sites and blogs. This may spell disaster for the future of real estate agents, at least in their current capacity.
The future of real estate
You no longer need to hire someone to buy or sell a home for you. You can do it yourself with the assistance of numerous online services. However, real estate agents don't just market your home — they also assist with the transaction. You might be asking yourself, what happens when it comes to agreements, contracts and closings? It's clear anyone can market their own properties, but how do they handle the transaction with no experience?
We can expect to see new businesses pop up and provide middleman transaction services for a flat fee. A simple internet search will already show you several title companies, attorneys and real estate professionals that offer flat fee services to assist you during the real estate transaction and closing. Several new businesses already exist that provide potential buyers and sellers with the tools and resources they need to conduct the entire real estate transaction without any involvement from an agent.
Staying Competitive
As a real estate agent your knowledge is valuable. As the need for an agent evolves, so should your services. Even if a homeowner has the technology to list their own home, many will still lack the knowledge required to conduct the transaction in full. You may look to broaden your scope of services to include consultation services, document reviews and overall real estate advice. Offer services that complement and asist the market changes rather than compete against them.
Final thoughts
Life is about change and no business or business practice is set in stone. Technology will continue to advance and in doing so, we will inevitably encounter completely new ways to conduct business in almost every sector of our lives. Real estate agents aren't going to disappear overnight, but there will definitely be a reduction in the need for these types of services, at least in their current capacity, as we continue into the endless evolution of technology. Agents will be required to adapt to these changes and transform in order to keep up with these coming changes.
Given the high-stakes nature of buying and selling real estate (likely being the biggest purchase most consumers will ever make), for now, we can safely say that consumers will continue to depend on agents and feel more comfortable working with an agent rather than doing it alone.
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