Connect with us

Opinion Editorials

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.

Published

on

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.

Continue Reading
Advertisement
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.

Leave a Reply

Your email address will not be published. Required fields are marked *

Opinion Editorials

The actual reasons people choose to work at startups

(EDITORIAL) Startups have a lot going for them, environment, communication, visible growth. But why else would you work for one?

Published

on

Startups meeting led by Black woman.

Startups are perpetually viewed as the quintessential millennial paradise with all of the accompanying perks: Flexible hours, in-house table tennis, and long holidays. With this reputation so massively ingrained in the popular perception of startups, is it foolish to think that their employees actually care about the work that startup companies accomplish?

Well, yes and no.

The average startup has a few benefits that traditional business models can’t touch. These benefits often include things like open communication, a relaxed social hierarchy, and proximity to the startup’s mission. That last one is especially important: While larger businesses keep several degrees of separation between their employees and their end goals, startups put the stakes out in the open, allowing employees to find personal motivation to succeed.

When employees find themselves personally fulfilled by their work, that work reaps many of the benefits in the employee’s dedication, which in turn helps the startup propagate. Many aspiring startup employees know this and are eager to “find themselves” through their work.

Nevertheless, the allure of your average startup doesn’t always come from the opportunity to work on “something that matters.”

Tiffany Philippou touches on this concept by pointing out that “People come to work for you because they need money to live… [s]tartups actually offer pretty decent salaries these days.”

It’s true that many employees in their early to late twenties will likely take any available job, so assuming that your startup’s 25-and-under employee base is as committed to finding new uses for plastic as you are may be a bit naïve—indeed, this is a notion that holds true for any business, regardless of size or persuasion.

However, startup experience can color a young employee’s perception of their own self-worth. This allows them to pursue more personally tailored employment opportunities down the road—and that’s not a bad legacy to have.

Additionally, startups often offer—and even encourage—a level of personal connection and interactivity that employees simply won’t find in larger, more established workplaces. That isn’t symptomatic of startups being too laid-back or operating under loosely defined parameters. Instead, it’s a clue that work environments that facilitate personalities rather than rote productivity may stand to get more out of their employees.

Finally, your average startup has a limited number of spots, each of which has a clearly defined role and a possibility for massive growth. An employee of a startup doesn’t typically have to question their purpose in the company—it’s laid out for them; who are we to question their dedication to fulfilling it?

Continue Reading

Opinion Editorials

How Peloton has developed a cult-following

(OPINION EDITORIALS) How has Peloton gotten so popular? Turns out there are some clear takeaways from the bike company’s wildly successful model.

Published

on

Man riding Peloton bike with instructor pointing encouragingly during workout.

Peloton is certainly not the first company to gain a cult-like following–in the past we’ve talked about other brands with similar levels of devotion, like Crossfit and Yeti. Now, full disclosure: I’m not an exercise buff, so while I’d vaguely heard of Peloton–a company that sells stationary bikes–I had no idea it was such a big deal.

I mean, it’s not really surprising that an at-home bike that offers the option for cycling classes has grown so much during the pandemic era (a sales growth of 172% to be exact). But Peloton has been highly popular within its fanbase for years now. So, what gives? A few factors, actually.

Vertical Integration

If your company really wants to guarantee the vision and quality you’re aiming for, one of the best ways to enact it is through vertical integration, where a company owns or controls more than one part of its supply chain. Take Netflix, for example, which not only distributes media, but creates original media. Vertical integration lets companies bypass areas that are otherwise left to chance with third-party suppliers.

Peloton uses vertical integration–everything from the bike to its Wi-Fi connected tablet to the classes taught are created by Peloton. Although this may have made the bike more expensive than other at-home exercise bikes, it has also allowed Peloton to create higher quality products. And it’s worked. Many people who start on a Peloton bike comment on how the machine itself is well-built.

Takeaway: Are there any parts of your business process that you can improve in-house, rather than outsourcing?

Going Live

But with people also shelling out $40 a month for access to the training regimen Peloton provides, there’s more going on than simply high-quality craftsmanship.

Hey, plenty of cults have charismatic leaders, and Peloton is no exception. Okay, joking about the cult leader part, but really, people love their trainers. Just listen to this blogger chat about some of her favorites; people are connecting with this very human element of training. So much so that many people face blowback when suggesting they might like training without the trainers!

The trainers are only part of this puzzle though–attending live classes is a large draw. Well, as live as something can be when streamed into your house. Still, with classmate usernames and stats available while you ride, and teachers able to respond in real time to your “class,” this can simulate an in-person class without the struggle of a commute.

Takeaway: People want to see the human side of a business! Are there any ways your company could go live and provide that connection?

Getting Competitive

Pandemic aside, you can get a decent bike and workout class at an actual gym. But the folks at Peloton have one other major trick up their sleeve: Competition. Whether you’re attending a live session or catching up on a pre-recorded ride, you’re constantly competing against each other and your own records.

These leaderboards provide a constant stream of goals while you’re working out. Small accomplishments like these can help boost your dopamine, which can be the burst of good feeling you need while your legs are burning mid-workout. With this in mind, it’s no wonder why Peloton fans might be into it.

Takeaway: Is there a way to cater to your audience’s competitive side?

Conclusion

At the end of the day, of course, Peloton also has the advantage of taking a unique idea (live-streamed cycle classes built into your at-home bike) and doing it first. Plus, they just happened to be poised to succeed during a quarantine. But that doesn’t mean you can’t learn from what Peloton is doing right to build your own community of fanatics. There are plenty of people out there just waiting to get excited about a brand like yours!

Continue Reading

Opinion Editorials

How a simple period in your text message might be misinterpreted: Tips to improve your virtual communication

(OPINION/EDITORIAL) Text, email, and IM messages may be received differently depending on your communication style and who you’re communicating with. Here’s some ways to be more mindful.

Published

on

Black woman smiling in communication talking on phone and laptop in front of her.

Life is full of decisions, learning, hopefully some adventure, and “growth opportunities” through our careers and work. One that some of us may have never considered is how our text, email or IM communication comes across to the receiver – thus providing us a growth opportunity to take a look at our own personal communication styles.

It may have never occurred to us that others would take it a different way. After all, we know ourselves, we can hear our voices in our heads. We know when we are joking, being sarcastic, or simply making a statement. The way we communicate is built upon how we were raised, what our English teachers stressed, and even what we’ve been taught through our generational lens.

NPR put out an article recently, “Are Your Texts Passive-Aggressive? The Answer May Lie in Your Punctuation”. This article discussed what to consider in regards to your punctuation in text.

“But in text messaging — at least for younger adults — periods do more than just end a sentence: They also can set a tone.” Gretchen McCulloch, a linguist and author of the book Because Internet: Understanding the New Rules of Language, told NPR’s All Things Considered last year that when it comes to text messaging,”the period has lost its original purpose. Rather than needing a symbol to indicate the end of a sentence, you can simply hit send on your message.”

While it may seem silly that the receiver would think you are mad at them because you used a period, here are some things to consider in our virtual communication now that we are all much more digital:

  • There are no facial expressions in a text except for emojis (which, even then, could be left up to misinterpretation)
  • There’s no sound of voice or inflection to indicate tone
  • We are emailing, texting, and sending instant messages at an alarming rate now that we are not having as many in-person interactions with our colleagues

Gen Z (b. 1995 – 2015), who are the most recent generation to enter the workplace, grew up with much quicker forms of communication with their earlier access to tech. They’ve had a different speed of stimulation via YouTube videos, games, and apps. They may have never experienced the internet speed via a dial-up modem so they are used to instantaneous results.

They also have quickly adapted and evolved through their use of Facebook, Instagram, Snapchat, and now TikTok. The last two platforms are designed for pretty brief attention spans, which indicates our adaptation to fast communication.

Generational shaming is out and uncomfortable but necessary conversations around diversity, equity, and inclusion are in (which includes ageism). You can’t just chalk it up as “those kids” don’t understand you, or that they need to learn and “pay their dues”.

So if you are of an older generation and even a manager, here are some considerations that you can take regarding your virtual communications:

1. Consider having yourself and your team take a DiSC assessment.

“The DiSC® model provides a common language that people can use to better understand themselves and to adapt their behaviors with others — within a work team, a sales relationship, a leadership position, or other relationships.

DiSC profiles help you and your team:

  • Increase your self-knowledge: How you respond to conflict, what motivates you, what causes you stress, and how you solve problems
  • Improve working relationships by recognizing the communication needs of team members
  • Facilitate better teamwork and teach productive conflict
  • Develop stronger sales skills by identifying and responding to customer styles
  • Manage more effectively by understanding the dispositions and priorities of employees and team members

This quiz is designed to help you identify your main communication style. It helps you to be more conscious of how your style may come across to others. Does it builds relationships, or create silent conflicts? It doesn’t necessarily mean you have to change, but you can adapt your style to best fit your team.

2. Always ask your direct reports about their preferred method of communication (call, text, email, IM, meeting).

Retain this information and do your best to meet them where they are. It would also be helpful to share your preferred method with them and ask them to do their best to meet you where you are.

3. Consider putting composed emails in your drafts if you are fired up, frustrated, or down right angry with your team.

You may feel like you are being direct. But since tone will be lost virtually, your message may not come across the way you mean it, and it may be de-motivating to the receiver. Let it sit in drafts and come back to it a little bit later. Does your draft say all you need to say, or could it be edited to be a little less harsh? Would this be better as a meeting (whether video or phone) over a written communication? Now the receiver has a chance to see you and have a conversation rather than feeling put on blast.

And finally, be curious.

Check out Lindsey Pollak’s books or podcast on the best ways to work with a variety of generations in your organization. Lindsey is a Multigenerational Work Expert and she does a great job explaining her research to drive multigenerational workplace success. She gives ideas on what all employees, managers, and even corporations should consider as we experience so many generations and communication styles in the workplace at the same time.

You may laugh that your children or employees think you are mad at them when you use a period in a text. But there’s a lot more behind it to consider. It may take adaptation on all sides as communication styles and the “future of work” continue to evolve.

Continue Reading

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!