The city of Pittsburgh has three rivers (Monongahela, Allegheny, and Ohio) that converge in the middle of town. These rivers all have a glorious history and they are the true foundation of this great city. Steel mills may have come and gone, but the rivers have been and always will be part of Pittsburgh.<\/p>\n
Like Pittsburgh, the real estate industry has three historic rivers of thought that are converging. The three rivers of thought in real estate are automated agent selection, agent demographics, and agent professionalism.<\/em><\/p>\n There is a renewed effort in the real estate space to find an electronic way to connect buyers and sellers with Realtors\u00ae. We\u2019ve been talking about this for years and still there has been no successful\/effective way to fully automate the find a Realtor\u00ae process. Many see this as the great battleground\/goldmine in real estate today. If someone gains control of this process, they will have successfully inserted technology between Realtors\u00ae and their clients.<\/p>\n Frankly, this seems unlikely to happen, at least on a grand scale. According to a survey by the Illinois Association of Realtors\u00ae<\/a>, less than 10% of homebuyers found their agent through technology while 50% relied on a recommendation from friends or family. <\/p>\n Someone may gain a small foothold with automated agent selections, but real estate is still a people business despite the massive influx of technology in the past 20 years. In addition, the other two rivers of thought are problematic to the automated agent selection process.<\/p>\n We have talked for years about the increasing average age of Realtors\u00ae and the lack of a diversity in the membership. The general worry is that buyers are getting younger and more diverse while Realtors\u00ae get older and remain predominantly white. Will Realtors\u00ae become \u201cout of touch\u201d as this trend continues, or is this irrelevant?<\/p>\n First, it should be noted that the average age of a Realtor\u00ae actually dropped to 56 years old this year (from 57). This is the first drop since 2007, according to NAR\u2019s 2014 Member Profile. A decade ago, the report showed an average age of 52.<\/p>\n The increase in average age is easy to explain \u2013 Realtors\u00ae don\u2019t retire. As the saying goes, \u201cRealtors\u00ae don\u2019t retire, they just become listless.\u201d Forty percent of NAR\u2019s members are 60+ years old. That mass of above average members pulls the overall age of members up naturally. The fact that the average age actually went down in 2014 indicates a strong surge of younger members.<\/p>\n The lack of diversity in the Realtor\u00ae world has always been surprising. The organization is dedicated to fair housing practices and has no underlying prejudice that I have detected in the past 20 years. Despite this, 85% of members qualify themselves as \u201cwhite\u201d on the NAR survey and that number goes to 91% for the over 60 crowd. The younger section of the membership (under 40) is a little better at 75%.<\/p>\n This lack of diversity makes automated agent selection more difficult. Realtors\u00ae demographics simply do not automatically match with typical buyers and sellers.<\/p>\n And then there is agent professionalism\u2026 another topic we have discussed (complained about) for years. In 2009, NAR developed some strategies aimed at improving the professionalism of members. Required training, testing, and agent reviews were all part of a proposal that never saw the light of day.<\/p>\n NAR is taking on the topic again and we can expect some action this time<\/em>. Only time will tell if the NAR Board has the boldness to approve major changes, but NAR leadership has shown a willingness to embrace change in the last two years (for example, Realtor.com and the new Core Standards). <\/p>\n Research, however, shows that the problem is more of a lack of self-confidence within the Realtor\u00ae ranks than it is in the public\u2019s eye. A 2010 survey by the Pennsylvania Association of Realtors\u00ae <\/a>showed that 48% of homebuyers strongly agreed that Realtors\u00ae are professional, but only 33% of members thought the same. In addition, that same survey showed that the public strongly considers Realtors\u00ae more knowledgeable (58% to 43%) and more ethical (39% to 33%) than members.<\/p>\n Will NAR finally take action on defining professionalism and requiring members to live up to that standard? If they do, how will this help the process of automating agent selection?<\/p>\n What the Realtor\u00ae organization does in the coming months about professionalism will be interesting, but how this concept converges with demographics and automated agent selection will be compelling. If we actually define what is meant by \u201cprofessional\u201d and we can figure out a way around the lack of Realtor\u00ae diversity, someone may be able to move forward with automated agent selection. But, is that what we really want?<\/p>\n1. Automated Agent Selection<\/h3>\n
2. Realtor\u00ae Demographics<\/h2>\n
3. Agent Professionalism<\/h3>\n
What Will This Convergence Look Like?<\/h3>\n