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Will real estate agents become extinct over time?

Every year, the concept of real estate agents becoming extinct make national headlines and some believe technology will supplant the practice, but is that true? Agents have survived dozens of revolutions thus far and somehow remain in the field.

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Agents becoming extinct?

The news cycle is at it again with threats of the real estate agent becoming extinct, often perpetuated by self deprecating agents themselves1. People fear change, whine about making less money, and that consumers are being fed too much information.

Our human story is always changing while continuing to be joined to common threads. For tens of thousand of years, humans have breathed air, eaten food, worked, lived and died. The ways in which this happens changes over time. We used to hunt food and pierce fish. Now we eat fois gras bedside in a fancy hotel and our perfectly round, genetically modified, red apples are what our kids think are normal.

So take the full time licensed agent and brokerage. They began as small neighborhood agencies then large corporate entities. No agency law, no MLS and hand written pocket listing cards to now virtual offices, electronic signatures, paperless transactions and transparent information on the Internet of every sale in many areas. But agents are still around, despite changes.

Tying the past to the present

What are the common threads? Payment structure, knowledge of homes before they enter the MLS, agents helping consumers, managing negotiations, and generally still more knowledge of home buying process than the consumer. A person buys a home maybe twice in their first ten years of home ownership. Then again maybe 10-15 years later. So, maybe three to four times in their lives.

I personally became licensed after my first home buying experience. I didn’t have an agent, I bought an owner financed home from my grandfather, and there was no home inspection, negotiations, cma, or even a title search. My grandfather was one of those who thought he could sell it himself, along with everything else in life. After just showing up at an attorney’s office one afternoon and signing some papers, I owned a home. Several years later, lots of money fixing the half self-installed roof, a five gallon bucket used as a basement sump pump pit and more, I took licensing classes. Lucky for me, my grandfather didn’t do any CMA’s and had he used an agent, perhaps he wouldn’t have been as surprised as he was when the house was “worth” two years later way more than what he felt was the value when he priced it himself.

Why industries change

Industries typically change when the consumer starts demanding more. They haven’t forgotten about their experiences in buying a home and have recently realized the need for change. When the real estate boom of the early 2000’s started, things started changing once again and real estate seemed to be on everyone’s minds.

In 2003, MRIS (our local multiple listing system) only allowed 6 photos. Around 2006, 20 more were added for an additional fee to the agent. In 2010, agents started paying photographers to take better photos. In 2012, maybe 35% of photos are being shot with professional equipment but there are still million dollar homes with agents taking the photos… and they are still bad.

Zillow, Trulia, Zip Realty, Redfin, and independent brokerages began popping up more and more. People were waiting for and talking about this new revolution wherein agents would become extinct for fear of the virtual agent or FSBOs banding together and *gasp* selling their own houses. Flat fee service companies have emerged and threatened to take business from the full service agent. Clients got burned, they didn’t feel like they got attention from limited services, and ultimately some of these systems weren’t in their best interest.

The Silicon Valley mentality

All of these companies started out with one mission, realized that their models needed to change and have done just that. Redfin tried salaried agents, ZipRealty tried rebates and both have realized while it may be a great idea theoretically, to change a way an industry works is just not sustainable. It’s about finding the balance of traditional services, cutting edge technology and client care. The majority of the country is not located or even has the mentality of Silicon Valley, so to oust all agents everywhere in revolt – that just isn’t going to happen overnight.

While all this is going on, most successful agents are still out there selling homes and working with consumers. They have kept up enough with technology to be able to text, know the main sites that consumers are searching, and have a facebook page, but their main priority isn’t the radical change happening around them, it’s their clients.

The consumer now knows about the big sites to search, and after that, they research how to buy homes, make their lists of what they think they want/need, go to some open houses and then call an agent who (hopefully) knows the areas, home styles, prices and all the rest of the intricacies of buying or selling a home. But once this experience is over, most consumers turn off the real estate radar and probably won’t be too concerned about real estate again for another several years and then, they will check to see what the newest search sites are.

But why are we agents still in existence in 2012? Hmmm.

Calm down, agents aren’t going anywhere

Perhaps the original intention was there to change everything, but from where I sit, today there are a lot of amazing people making huge advances to the real estate business but not making anyone extinct. The agent isn’t going anywhere. Calm down. 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 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. Broken pieces get fixed or enhanced and the real reasons for helping people find a home in which to live continues to remain. There always needs to be a common thread. There will be a future in real estate, and the agent will continue to be there. Perhaps in different roles, but still there.

1Letter to WSJ from agent

Amanda Lopez is a real estate broker and founder of Style House Realty in Baltimore, Md. She has worked in the real estate industry for over 6 years and prior to that studied advertising, branding and web design. Refusing to believe the real estate industry had to be bland and boring in design and appeal to everyone, she set out to bring some style and technology into the mix. Amanda can most likely be found with coffee that got cold, great shoes, her mind in the sky and her evernote app open.

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10 Comments

10 Comments

  1. mikec (@blogboy2)

    March 21, 2012 at 3:28 pm

    Customer care will always be needed. And only a real estate “human being” can really offer that. Thank you, Amanda

  2. Lesley Lambert

    March 21, 2012 at 11:36 pm

    I have been doing this since we had to pick up our MLS book at the Board (for 23 years now) and it was 2 weeks or more out of date. I love the technology that has developed and have never felt that any of it was going to replace me or put my career in jeopardy.

    I am not a door opener or a gate keeper. I am a negotiator, a trusted advisor. I am an expert and a resource. I am a professional who knows more about buying and selling real estate than any individual can know. I am a skilled negotiator who will, assuredly, make a better deal than anyone else could. I am a tiger in my field and I cannot be replaced by any program. I am not worried.

  3. Ted

    March 22, 2012 at 12:40 am

    The short answer is NO. Most of the taunting I see about how technology is going to kill the real estate agent is usually from the same people who jump from one MLM to the next and try to sell real estate at the same time. Always convinced they can make 10K a month in their spare time, looking for the magic lead fountain.

    Houses don’t sell themselves, houses wont sell themselves and Government requires a license because sellers and buyers do bad things to each other when left unsupervised. Will some models change? Sure and for the better, but probably one of the more larger examples of why Brokerage will continue is looking at Keller Williams. KW is out-pacing the big nationals each year of the down market while the big nationals are mimicking the numbers out of NAR. You can change the model – but commission sales is commission sales.

    Even if sellers agreed to an upfront retainer for real estate services the top agents would still command the market, just like the top in any field and the retainers for the top would cost more than the retainers for those not at the top.

    Look at the stock trading industry and financial planning …. Has eTrade put the traditional Stock broker out of business? Has eTrade abolished the need for licensed security dealers? Nope.

  4. Norm Fisher

    March 25, 2012 at 12:34 am

    If this Internet thing ever catches on, we’re done!

    Some of the world’s brightest minds have tried to displace agents and they’ve failed. Real estate agents have been around a long time and they aren’t going anywhere soon.

  5. Mike Muranetz

    March 26, 2012 at 11:34 am

    Greta post Amanda! We REALTORS® have to welcome change. I love technology & gen X & Y people do, too. As a baby boomer, they like it when I can relate to them including social media. Still, many believe they can sell/buy on their own using the internet but little do they know, marketing is only part of the process. Here in Edmonton, less than 10% of homes are sold privately which also includes family members selling to other family members. Those are pretty low results! Saying all that, we REALTORS® will still be needed for a long, long time.

  6. ladygolfer

    March 28, 2012 at 4:22 pm

    The only real estate agents that will become extinct are the agents who don’t know how to sell property “to customers”, or “for customers”. After all, the whole purpose of hiring a real estate agent is to either buy a property or sell a property and in some instances manage a property. I have a lot of friends who are real estate agents. They all know how to show real estate but not all of them know how to sell real estate. I know which ones I would call if I was selling my home or buying a home. It’s the agent with a sales strategy. It’s the agent who doesn’t offer excuses for why a home hasn’t sold, but offers advice to facilitate a sale. Excuses such as “it’s a slow market”, “its tough for anyone to get financing”, or “the other homes in the neighborhood have lowered their price” are merely a way of saying they are not competent enough to sell real estate. I will hire the agent who hasn’t had a sign on a property I have driven past every day on the way to work for the last three years. (how long has that sign been in front of your neighbors house?) I would never call an agent who complains about the customers they are serving for either taking up so much of their time or not being willing to lower their price, nor would I hire an agent who doesn’t know the benefits of every neighborhood they have a listing in. If they can’t name the benefits of living in my neighborhood before I give them the listing then they won’t be marketing the benefits after I give them the listing. Its easy to sell a trendy neighborhood but takes sales skills to sell the average neighborhood with cookie cutter houses which is what most of us live in. I would not use an agent that doesn’t serve both buyers and sellers so they understand both perspectives. The agents I would contact usually have a house sold within 45 days or less regardless of the market conditions, and they know the market so well they can find the right house for a buyer in 45 days or less. They don’t have to continually lower the price to get a property sold because they priced it right to begin with. If a seller doesn’t like the price the agent recommends then the agent I would hire would have the integrity to not put their name on the listing because they know they wouldn’t be able to sell it. These agents know the values and benefits of the properties they are selling and showing, and they point out those values and benefits to potential buyers and their agents. They get out and look at every new listing in the neighborhoods they specialize in regardless of whose sign is in the yard. They do this to understand the competition and to also know the properties that are out there for buyers. They give the right advice to sellers so the home will show best, and aren’t afraid to be critical when a property doesn’t show well. They take good pictures that show the homes best assets. The description of the home is accurate and interesting so it stands out among the many homes competing to be sold in the same price range. (How many times have you seen the phrase “stainless steel appliances” in a description? yawn…) Unfortunately, the sales strategy of a lot of real estate agents for home sellers is to place it on the MLS, put a brochure with pictures and information in a box in the front yard, stick a real estate sign in the ground and a lock box on the door, and then keep dropping the price until someone buys it. They do not attend the showings when an agent brings a potential buyer and they rely solely on the information the MLS regurgitates to market the home to the buyer’s agent. They do not network with buyers agents outside of their own office nor do they have a network of potential real estate investors that may buy the home as an investment. They do not drive by their listings to make sure the yard looks appealing or offer advice for creating more home appeal. They wait for a seller to call to refresh/refill the brochure box. In other word’s they don’t work the listing! An agents’ strategy for working with home buyers is to check the MLS, print out brochures of potential homes, schedule the showings, take the buyer to the home, open the door, and walk around with them offering no knowledge of the home other than what was shoveled into the MLS by the listing agent. These are NOT- repeat NOT-sales strategies! Any home seller or buyer is capable of doing the same thing, which is why so many real estate agents will become extinct. Their extinction will be the result of their own choices in how they approach their job, improve their sales skills, and work their listings. Anyone can sell a home in a booming economy, but it takes a real salesperson to sell a home either to a customer or for a customer in a down economy like we have now. The reason so many homes still remain unsold is because the agents don’t have any sales skills other than lowering the price. Meanwhile, home sellers have figured this out and see no reason to give 6% and 6 months to an agent when they can lower the price of the house themselves to move the house faster and make more money on the sale. Using the strategy of lowering the price until a home sells damages a real estate agent’s credibility and business. Relying only on lowering the price to sell a house means smaller commissions. It also the hinders an agent’s ability to acquire future listings from home sellers in the same neighborhood. Home sellers never hire the agent who sells for the “least amount”-they hire the agents who sell in the “least amount of TIME” for the highest price. Lowering the price also hinders the buyers ability to get financing because the comp sets for the market area have been lowered by agents who continually lowered prices on homes sold previously. The next person in the neighborhood who wants to sell a home must now start with a lower price. The agents are cannibalizing themselves out of existence. If an agent is only selling PRICE then they are not a “real” real estate agent.The customers you are working with-whether buyers or sellers-have changed in the last twenty years. Unfortunately, a lot of real estate agents sales capabilities and skills have not changed in that same time period. If a real estate agent isn’t offering services that customers can’t do for themselves then they are redundant. Anyone who isn’t willing to admit this is trying to believe their own propaganda. The way homes sold twenty years ago doesn’t work in today’s world. Twenty years ago our parents had very few technical skills. Only 2% did their own research or had access to the tools to find homes or sell homes on their own. Not every home had a computer and a printer with which to develop brochures. Many did not have access to the internet with it’s MLS research and marketing capabilities, and even fewer had cell phones so that an interested buyer could contact them direct any time day or night to ask questions, schedule a showing, co-op with an agent, etc. Most home buyers and sellers have access to all of this now. Today, 77% of all buyers research homes on the internet before contacting either the home seller direct or the listing agent. Those exponentially rising percentages will make most real estate agents extinct-especially those without any selling skills. There’s no excuse for a real estate agent to not have sales skills today because anyone can take a sales course or do research for better selling on the internet. The home sellers and home buyers have done just that. This is not rocket science.

  7. Ray Pepper

    March 31, 2012 at 6:43 pm

    Seattle is a bit ABOVE AND BEYOND the rest of the country in technology and consumer saavy. I assure you the real estate Agent, as we know it, is coming to an end because the consumer is demanding it. Our numbers along with so many other differnet type technology driven Real Estate offices are taking market share while rebating the consumer for their assistance in their purchase or sale.

    Good Luck to all you Dinosaurs because the Buffet is coming to an end and don’t be caught at the end of the line or there will be no food left!

  8. Gord McCormick

    April 9, 2012 at 8:20 am

    great article! reminds of the of the mid-late ’90’s predictions from the experts that traditional retail stores were going the way of the dinosaur with the advent of the internet….it doesn’t appear that has happened…

  9. be_shh

    May 22, 2012 at 4:02 am

    https://www.myteamruby.com is a top Raleigh real estate agent. If you want to know more about realtors there’s a helpful blog on her site.

  10. Ryan

    September 23, 2018 at 9:00 pm

    In a fast appreciating market, when selling a home is considerably easier, these types of questions get asked and “disruptors” pop-up. When times get tough and skill is needed to sell a house, those agents with the skills will always be called upon.

    Computer modeling and “zestimates” can only take you so far. You need, and will always need, an impartial third party who knows the market and market trends to accurately price a property.

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Opinion Editorials

How the Bullet Journal method has been hijacked and twisted

(EDITORIAL) I’m a big fan of the Bullet Journal method, but sticker-loving tweens have hijacked the movement. Worry not, I’m still using black and white bullet points with work tasks (not “pet cat,” or “smile more”).

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bullet journal

It’s taken me some time to come around to the Bullet Journal method, because it took me some time to fully understand it (I have a tendency to overthink simplicity). Now that I understand the use, I find it very beneficial for my life and my appreciation for pen-to-paper.

In short, it’s a quick and simple system for organization tasks and staying focused with everything you have going on. All you need to employ this method is a journal with graph or dotted paper, and a pen. Easy.

However, there seems to be this odd truth that: we find ways to simplify complicated things, and we find ways to complicate simple things. The latter is exactly what’s happened with the Bullet Journal method, thanks to creative people who show the rest of us up.

To understand what I’m talking about, open up Instagram (or Pinterest, or even Google) and just search “bullet journal.” You’ll soon find post after post of frilly, sticker-filled, calligraphy-laden journal pages.

The simple method of writing down bullets of tasks has been hijacked to become a competitive art form.

Don’t get me wrong, I like looking at this stuff because I dig the creativity. But, do I have time to do that myself? No! For honesty’s sake, I’ve tried just for fun and it takes too much damn time.

With this is mind, this new-found method of Bullet Journaling as an art is something that: a) defeats the purpose of accomplishing tasks quickly as you’re setting yourself back with the nifty art, and b) entrepreneurs, freelancers, executives, or anyone busy would not have time for.

Most of these people posting artistic Bullet Journal pages on Instagram are younger and have more time on their hands (and if you want to spend your time doing that, do you, man).

But, it goes against the simplistic method of Bullet Journaling. The intent of the method.

And, beneath the washi tape, stickers, and different colored pens, usually lies a list of: put away laundry, feed cat, post on Insta. So, this is being done more for the sake of art than for employing the method.

Again, I’m all for art and for people following their passions and creativities, but it stands to reason that this should be something separate from the concept of Bullet Journaling, as it has become a caricature of the original method.

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Opinion Editorials

The perfect comeback to that earnest MLM guy you meet at every coffee shop

(EDITORIAL) We’ve all been cornered by someone that wants to offer us financial freedom for joining their pyramid scheme, but we typically freeze or just reject them. There’s another way…

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The following editorial was penned by Chris Johnson who offers the perfect comeback to that stranger who approaches you in Starbucks or that person you haven’t talked to since high school that wants to discuss your financial freedom:

Last week, I was at Starbucks, doing some marketing work. This was apparent to all who could view my laptop by the big 72 type “Marketing” headline that I was working on in my browser.

A man sharing a table, with no apparent laptop of his own, was taking interest in what I was doing. He was mid-40s and he was ambiently stalking and sizing everyone around him up. He was swallowing and always “about to talk.”

Finally, after I looked up to collect my thoughts, he broke my reverie.

“Are you in marketing?”

See, our man (Justin was his name) had just stated a business, an e-commerce business. He was vague on his details.

I knew where this was going. We all know.

Anyone that’s ever worked from a Starbucks has met Justin.

Justin mentioned a couple of his relatives, also with businesses. And, without asking what type of clients I serve, told me that they’d be a great fit for me. He’d love to introduce me, if we could just exchange contact info.

I knew exactly what he was doing. As God as my witness, I knew the only place where this interaction would possibly go. I wasn’t, not for a minute, fooled by the promise of referrals that would never happen.

Of course, I give it to him, not because I think there’s any hope that this will work out. But because I want to know. We exchange texts, and I save his contact info.

He excuses himself and gets into his 2002 rusty Kia, and drives off.

The next day, I get a call with the ID: MLM GUY STARBUCKS 2019.

“Chris, we met at Starbucks,” he says, “This is Justin. And I was wondering if you were open to financial opportunities for your family.”

Well, knock me over with a feather. This was such a surprise.

Without a plan in my head, I said “Justin, are you in the Amway organization? Because if so, I have been waiting for your call.”

Justin confirmed that yes, he was in Amway. And he was really glad!

“Justin, I’ve got some great news for YOU, would you like to hear about it?”

“Sure,” he goes.

“OK, well, you have to be open – and committed – to improving your relationship with Amway. Is that something you’re open to right now?”

“Yes,” he said, “Definitely.”

“Great. So let me tell you about what I do with the Amway people I meet. See, I’ve made a really profitable career out of helping them, and it’s turned into the focus of my life.” This is, of course, a lie, but we were even because Justin got my phone number on the pretext of referring me business.

“OK, so the deal is this. One of the problems with Amway is that it turns you into someone that has to monetize all of your family and friends. And when that happens, you become less about the relationship, and more about the money. Has that happened to you?”

“Yes. Yes it has.” Justin admits.

“Yes, great, this is what we’re hearing.”

The words tumbled out of my mouth: “See all over America there are Amway distributors, just like you. They are chained to various Starbuckses. This is the old model, there’s simply no freedom.

They have to fight tooth and nail to get appointments and most of ’em don’t go anywhere. For most of the Amway owners, this isn’t working once they pitch all their friends and all their family.

So I’ve created an organization called Amway Freedom. All you have to do is sign up. By signing up, you agree to automatically pay $5.00 per month to me, to be free of Amway.

But the REALLY good news is that you can sign OTHER people up, and keep half of the money for your family and your freedom. And when they sign up, half goes to support the reps, and the other half goes to support your opportunity!

From what I hear, over 1.5 million Americans signed up for Amway at some point. Tell me, Justin, if you got just 1% of that market – 15,000 people to pay you $5.00 a month without you having to do anything, would that change your life?

Would $75,000 per month change your life?”

Justin said “Um, well, this isn’t really what I was think-”

“Look Justin, this isn’t for everyone. I know that. Most people won’t be able to take advantage of this opportunity. They only think of the problems. They can’t imagine how this could work, a business with no merchandise and freedom.

But, Justin, you’re helping people get free of the endless random meetings… the Starbucks bills… the gas expenses. You’re turning your story of struggle into a story of success. Are you ready, Justin?

This is my business,” I said, “And this is what I want for you, Justin. Are you ready to join your challenge and fight for the freedom of 1.5 million people that have tried Amway?”

“Um…” Justin said. “I just don’t.”

“I see. This might not be working for you, Justin, and that’s 100% OK. Take all the time you need. But, if you sign up today, I’ll offer you the EXCLUSIVE market rights to help free people from Younique, Herbalife, Infinitus and over 30 other household brands. That makes a market – just in America – of 20 million Americans! Doesn’t that sound great, Justin? If you captured just 1% of that, that’s 200,000. And that business would earn 1 million every MONTH.

All without products to store, all while helping people.

Will you be paying with a Visa or Mastercard?”

Justin paused for a moment. “This was a waste of my time,” he finally said.

“You don’t really have a business!” he spat.

Well done, Justin, well done indeed.

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Opinion Editorials

Funny females are less likely to be promoted

(CAREER) Science says that the funnier a female, the less likely she is to be promoted. Uhh…

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Faceless keyboard warriors around the world have been — incorrectly — lamenting that women just aren’t funny for years now (remember the “Ghostbusters” remake backlash?).The good news is they are obviously wrong. The bad news? When women dare to reveal their comedic side in the workplace they are often perceived as “disruptive” while men are rewarded.

That’s right. Women not only have to worry about being constantly interrupted, receiving raises less frequently than men despite asking for them equally as often, and still making nearly $10,000 less than men each year, but now they have to worry about being too funny at the office.

A recent University of Arizona study asked more than 300 people to read the fictional resume of a clothing store manager with the gender-neutral name “Sam” and watch a video presentation featuring Sam. The videos came in four versions: a serious male speaker, a humorous male speaker, a serious female speaker and a humorous female speaker.

According to the researchers, “humorous males are ascribed higher status compared with nonhumorous males, while humorous females are ascribed lower status compared with nonhumorous females.” Translation: Male workers earn respect for being funny while their funny female coworkers are often seen in a more negative light.

There are, of course, several reasons this could be the case. The researchers behind this particular study pointed to the stereotype that women are more dedicated to their families than their work, and being perceived as humorous could convey the sense they don’t take their work as seriously as men.

Psychiatrist Prudy Gourguechon offered another take, putting the blame directly on Sam the clothing store manager, calling out their seemingly narcissistic behavior and how society’s tolerance for such behavior is “distinctly gender-based.” She says these biases go back to the social programming of our childhoods and the roles mothers and fathers tend to play in our upbringing.

So what are women supposed to do with this information?

Gourgechon’s status quo advice includes telling women to not stop being funny, but “to be aware of the the feelings and subjectivities of the people around you.” While recommending an empathetic stance isn’t necessarily bad advice, it still puts the onus on women to change their behavior, worry about what everyone else thinks and attempt to please everyone around them.

We already know that professional women can have an extremely hard time remaining true to themselves in the workplace — especially women in the tech industry — and authenticity is often a privilege saved for those who conform to the accepted culture. We obviously still have a long way to go before women stop being “punished” for being funny at work, but things seem to be progressing, however slowly.

Former First Lady Michelle Obama shared her thoughts last year on the improvements that have been made and the changes that still need to happen, including encouraging men to step up and do their part. In the wake of the #metoo movement, CNBC recommended five things men can do to support women at work. There are amazing women in STEM positions around the world we can all admire and shine a spotlight on.

All of these steps — both big and small — will continue to chip away at the gender inequality that permeates today’s workplaces. And perhaps one day in the near future, female clothing store manager Sam will be allowed to be just as funny as male clothing store manager Sam.

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