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Will Realtors be replaced by technology by the year 2031? You respond

There is always talk of disintermediating the real estate industry, but could it happen by 2031? Some say yes, others emphatically say no. What say you?

There is always talk of disintermediating the real estate industry, but could it happen by 2031? Some say yes, others emphatically say no. What say you?

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.”

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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.”

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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?

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

33 Comments

33 Comments

  1. Joe Manausa

    March 8, 2011 at 9:05 am

    Lani, I think “replace” is a little strong, but certainly “redefine.” I see real estate agents evolving to more of a customer service solution, since the research and property selection tools on the internet are growing very fast. Perhaps a cross between a current “transaction coordinator” and a (other industry) customer service rep for pre and post closing Q&A.

    • Lani Rosales

      March 8, 2011 at 9:16 am

      I agree, although I think the most skilled negotiators will end up in the top producer spots as much of the rest can be aided with tech. Thoughts?

  2. Matt Thomson

    March 8, 2011 at 9:42 am

    We’ll be replaced, but it won’t take til 2031. Think about it. There’s already self-check lines in many grocery stores. What we do isn’t any more complicated than grocery checking. I mean, if you can purchase groceries all by yourself, and if you can buy a $12,000 car with no legal ramifications whatsoever all by yourself, why will it be another 20 years before you choose to buy a $300,000 home with tons of legal ramifications all by yourself.
    Spooky.

  3. Matt Thomson

    March 8, 2011 at 9:46 am

    You really need a “Delete” button on this blog for guys like me who it send before we think.
    Despite my dripping sarcasm, I am fully aware that our roles will change, as they already have dramatically in the past decade.
    Consumers are given a ton more information, and in many cases are better at sorting through the data than many real estate agents. That may be a result of the buyers knowing more of what they want so they can sort better, it may sadly be that many consumers feel the need to educate themselves while agents stop learning once they get their license.
    Changing roles doesn’t mean being replaced. Keeping up with tools and learning how others are using those tools and keeping a fiduciary rather than functionary mindset should keep agents in business for many many years.

    • Lani Rosales

      March 8, 2011 at 2:19 pm

      “Changing roles doesn’t mean being replaced,” you say and I agree!

  4. Lynda White via Facebook

    March 8, 2011 at 9:52 am

    Hee hee and I just commented on that very question on Quora about an hour ago! 🙂 No, we will always need the human touch.

  5. Joe Sheehan

    March 8, 2011 at 10:28 am

    As I was thinking about this question, I realized that if I am still above ground in 2031, I will be 76 years old. Hopefully I will be living in a warm-all-year-round climate and the most worrisome thing on my mind will be what restaurant offers an early-bird special and a good seniors discount. 🙂

    • Lani Rosales

      March 8, 2011 at 2:20 pm

      Joe, that’s an interesting point and one that must be nice to think about. I’m not a Realtor but I’m still in my 20s so I should probably think about Robots while you think about buffets, deal? 😉

  6. Jill Kipnis

    March 8, 2011 at 2:30 pm

    This is such an interesting question, and I wish I had a crystal ball! While technology has certainly changed industries including publishing (with eReader devices) and music (the downfall of the physical album), it’s hard for me to picture undergoing such a huge transaction like buying or selling my home without the assistance of a Realtor. I think Realtors will increasingly use technology to help with the paperwork for each transaction, but the process of pricing a home, staging a home, working with an inspector, etc. requires the human touch of a Realtor.

    At least in today’s market, I think we can agree that using a Realtor is critical:
    realtor.com/blogs/2010/12/31/realtor-expertise-is-critical-in-todays-market/

    –Jill Kipnis, Community Builder @Realtor.com

  7. cbass

    March 8, 2011 at 4:16 pm

    yes, but probably much sooner. most will soon be playing checkers in the park with former travel agents, book & music store owners, and blockbuster employees.

    • Jonathan Benya

      March 9, 2011 at 1:24 pm

      I’m so sick of the comparisons being made between Realtors and every other occupation that has been supplanted online. It’s a completely different ball of wax, guys! Yes, the role is evolving, yes it will continue to evolve, but replaced? Hardly!

  8. Jonathan

    March 9, 2011 at 2:57 pm

    Choosing a property is inherently a community decision. People love to share that experience with someone, or get advice from a trusted source. That want to be assured that they are making a good decision. For that reason I don’t think technology will replace Realtors.

  9. TJ Bell

    March 9, 2011 at 10:52 pm

    “Real Estate Consultant” sounds pretty 10 dollar an hourish to me with some of the work being outsourced to a call center in Thiruvananthapuram.

    I think that’s the real issue. The industry will continue to change but will the value proposition be there in 10 years for people to pay $12,000 in commissions on $200,000 transaction.

  10. Ralph Bell

    March 10, 2011 at 12:41 am

    I see mortgage brokers being replaced before REALTORS. I see the current compensation of REALTORS changing. But I also see pink elephants and flying monkeys.

    Regardless of what you think or not think about the future, REALTORS as always will have to adapt to change if they want to be successful.

    And maybe by 2031 HUD will finally accept the use of electronic signatures 31 years after the Electronic Signature Act was passed. And finally by 2031 my local MLS will allow you to access it with a web browser other than Internet Explorer.

  11. Missy Caulk

    May 3, 2011 at 7:33 am

    A few years ago, our GMM (General Membership Meeting) at the Ann Arbor Area Board had a newly relocated Google Executive in to speak.

    He said, he thought he could do it on his own, armed with Google Maps, the listings,the values etc…

    …but he couldn't because he still needed someone to let him in the houses.

    Rather than call all the listing agents he chose a buyer agent. I know the agent he chose and he is NOT technology minded at all, now retired.

    • Lani Rosales

      May 3, 2011 at 10:02 am

      Missy, that is SO telling. What a great story to tell clients! 🙂

  12. matthew holder

    May 3, 2011 at 10:14 am

    Hey all.

    I feel Realtors have more to fear from being replaced by attorneys than tech. People are quick to compare the real estate industry, which deals with selling assets of extreme variance from home to home and neighborhood to neighborhood. Cars, hotel rooms, etc. have a much smaller (and more manageable) variance between feature sets, which makes it easier to comparison shop and create fairly accurate valuation models. Combine that with the life decision and high investment of purchasing a home and you have one hot mess to sort out with a clean tech solution.

    Has anyone considered that real estate agents are the most efficient solution? And that tech will help increase their efficiency and help them further focus and specialize their efforts?

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