We’ve written about Quora.com and its question slash answer slash wiki community of users and their potential uses in the real estate industry. One of the topics I follow is “Real Estate Agents” to monitor consumer sentiment regarding the profession.
Recently, a Quora user asked “Will technology replace the need for human real estate agents in the next 10-20 years? Why or why not?”
Before I share my personal beliefs, it was interesting how the community weighed in.
The business of real estate will change
Quora user Lanny Baker who has no bio but whose Facebook profile is that of Zip Realty’s CEO, (so we cannot verify whether or not it is actually Baker, but nonetheless), Baker said, “Looking at the growth and scale of eBay Motors, eTrade & Charles Schwab, and TurboTax & QuickBooks there are at least a few interesting examples of technological solutions encroaching on well-entrenched human-powered services (used car sales, stock brokerage, tax and SMB accountancy), . Most of these are higher frequency activities for consumers than is residential real estate, which means the incentive to seek out a more efficient alternative, and the market opportunity for those alternatives, may be bigger in these other areas. In each of those examples though, the conventional wisdom for a long time was that “people will never do this online, it is too big, too complicated, the risks are too great.” And then, that changed…”
RealDirect CEO Doug Perlson said, “I believe the role of the real estate agent is changing, and while the agent may not “go away”, I envision a platform that lets sellers distribute their listing to every place a buyer may be looking (search, classifieds,social nets, MLS), use interaction data to allow the seller to make informed decisions on what to do next (pricing, etc.), and provide CRM like tools that make scheduling and contacts seamless through the sales process (think Open Table for home showings). A seller can use these tools to manage the process with the help of a real estate “consultant” who unlike a typical agent is motivated by commission, but is a salaried professional.”
Paperless Real Estate specialist Jessica Stoner pointed to the reasons time won’t change why consumers hire Realtors and answer the question simply, “Yes and No. There will remain a role for the the traditional full service agent. This will still be sought by a portion of the public. However, the online power of the people is changing real estate forever.”
Real estate and technology attorney Elizabeth Baum points to technology as more of a catalyst, “I don’t think technology will completely replace real estate agents in all transactions, but it will fundamentally change the role of the agent. There will always be some need for quality facilitation of a complicated (or at least intimidating and costly) transaction, and there will always be people who would prefer to outsource a lot of the steps involved in a real estate transaction (ie., sorting through the MLS, getting a house ready for sale).”
Agents aren’t going anywhere
Max Cangelosi, a consumer who is not involved in the real estate industry said, “With today’s technology in a vacuum….no. But I think it’s certainly possible in the residential space given the consumer protections in place.” Cangelosi continued with examples ranging from LegalZoom contract use to Zillow’s true understanding of a home, ending with “I think that the issue is less about technology as there are hundreds of thousands of incredibly hard working agents who built their careers in this industry.”
Austin Realtor Malita Jones points to the value proposition of agents, saying, “I always say it’s not about finding the house – it’s about representing clients through the contract process – I work on contracts and the house buying / selling process constantly – even my smartest clients get really confused on how things are handled or who pays for what – or what to do and not to do to keep themselves out of court in a few years.”
Agentleaf.com CEO Matthew Holder said, “Its unlikely. A great example is Kelly Blue Book for cars. No matter how sophisticated Kelly Blue Book is at determining fair market vale (about as accurate as Zillow is at predicting home prices) people will still feel the need to negotiate. People will also feel the need to be protected from liability, which is where an agent comes in. This could only be replaced by a more sophisticated market structure where incentives and knowledge was more easily shared…not likely to happen since the incentives are towards hoarding information. There are many things that can be automated, but the future of real estate is in making the agent’s job easier, cheaper, and increased efficiency in the market.”
Where do you stand?
I lean toward the camp of a shifting value proposition of Realtors with technology acting as an aide to the industry rather than a replacement.
Do you think consumers can be swayed to believe that technology will replace Realtors or is the public level headed enough to see a simple shift? Where do you stand?