Technology Roadkill: Stock Brokers, Travel Agents, &
“God is dead.”
“Nietzsche is dead.”
Experts have been predicting the demise of Realtors longer than I can remember.
Like stock brokers and travel agents a generation ago, advancing technology — and the democratization of information — were supposed to render Realtors obsolete.
Instead, it’s For Sale by Owners (“FSBO’s”) that appear to be endangered.
According to Harris Insights & Analytics, the percentage of home buyers and sellers who used a Realtor in 2018 rose to an all-time high, 90%.
That’s up 5% from 2014, and 9% from 2001.
What accounts for the decline of FSBO’s?
Here are my three theories:
One. Greater transaction complexity.
Twenty-five years ago, the standard Minnesota Purchase Agreement, including all Addenda (Financing, Inspection, etc.) and the Seller’s Disclosure, was less than 10 pages long.
Try, 30-35 pages.
While you don’t need to be an attorney to expertly navigate (and negotiate) all that . . . trust me, as a former corporate attorney and now veteran Realtor, it helps.
In fact, drafting real estate contracts involves so much law that Minnesota Realtors actually have a statutory exemption to practice law without a license.
Evolving Job Description
Similarly, as recently as five years ago, using social media to market homes was hardly a thing.
Now, fluency in social media is practically a job prerequisite for Realtors and their brokers.
Of course, the flip side of that coin is . . .
Two. Information overload.
Thanks to the Internet, there’s more information than ever available to the public about the housing market.
The bad news?
Thanks to the Internet . . . there’s more information than ever available about the housing market.
To digest and act upon all that info, consumers (still) need good agents.
Three. Bigger home price tags = higher cost of mistake(s).
One of the truisms about purchasing a home is that it’s the biggest financial transaction most people will ever make.
With home prices at or close to all-time highs in many markets today, that’s still the case, only more so.
Even if Sellers don’t live in Manhattan or San Francisco, just one not-so-big mistake can easily shave $10k (or $50k!) off their home’s sales price.
In other words, a lot more than the typical Realtor’s commission.
Risk(s) of Complacency
None of which is to say that Realtors can become complacent about their long-term viability.
To remain relevant, brokers and agents must continually leverage new technology, stay close to their clients, and not just meet consumers’ wants and needs, but anticipate them.
In short, if Realtors don’t continue to deliver value to consumers . . . they will become roadkill.
Just like scores of now-defunct professions like stock brokers, travel agents, etc.
See also, “Minnesota Realtors and the “Unauthorized Practice of Law”; “(More) FSBO Mistakes“; “FSBO Mistake #1 (and #2, #3, etc.)”; “FSBO Mistake #4“; “FSBO Mistake #37“; and “Realtor Job Description 2018.”