Real Estate Agents Obsolete?
I keep thinking about how obsolete real estate agents are going to be/are already becoming, but can't quite wrap my head around how/why. I just feel like car salesman, stockbrokers, etc. are all in the same boat, and aren't necessary other than at the very high net worth/luxury level.
I think real estate agents are the same, but can't put my finger on how they're going to be replaced.
If anyone thinks the same thing feel free to share your thoughts.
You can already see it now. Owners and management companies have in-house leasing teams. On top of that, it is cheaper and more efficient to post your own apartments on Zillow, Streeteasy, etc. The real estate agent provides ZERO value these days. Both landlords and tenants don’t want to pay a broker fee. Tenants are also smarter and more tech-savvy now because they know you can easily find the management/owner’s contact info online and usurp the agent process. The coffin in the nail is the impending broker fee ban in NY. Brokers are crying to the courts that this will cause a mass dislocation of jobs. Honestly, most real estate agents don’t make real money anyways. They rather deal directly with each other. Car salesman will still have a place because most states don’t allow car manufacturers(Ford, BMW, Lexus) to sell their own cars. They have to partner with dealerships. I guess this promotes competition and creates jobs.
Totally agree, using agents for rentals is becoming useless quick. Just not sure how the sale process will take place without them in the next 5-10 years. Perhaps more people doing FSBO with some sort of online company that looks over contracts for a few hundred dollars a piece?
It would be interesting to see say Zillow start to offer this more as a service. They currently seem to be the only real competitor to the MLS service in terms of listing inventory
I believe for now, sales agents are safe...but not for long. Eventually, because of information is ubiquitous, some startup will offer to help FSBOs at a cost, maybe like 1% of the sale or a fixed rate of $5,000. Still significantly lower than the typical 6% agent commission. Also owners are becoming smarter and in certain markets they see that there is a shortage of supply. As long as you post a decent home online for a fair price, it’ll sell in under 90 days. I think highly priced homes above $2MM will still be a market where sales agents can make money because often times the owners of high value properties just simply either don’t have the time to conduct a sale on their own or they are simply disinterested and rather just pay the fee.
Had a fairly high up MD at a top brokerage in multifamily investment sales say that platforms like Ten-X will definitely cut into their profits. Should be interesting how this plays out going forward.
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Haven’t dealt with them on commercial but in buying your own real estate they provide very little value and end up making more per hour than high powered lawyers a lot of times ... especially if you live in a housing market where its really hot and inventory is low. I mean, there’s literally three homes for sale in a particular range, why do you need someone to sell it or represent you in looking at three homes?
Think it’s simple enough. When you’re looking for a lease do you typically go on Zillow/Craigslist or call an agent? Some people still would still rather have an agent market online and do tours for them but it’s getting was easier to market it yourself now.
I’ve seen major pushback recently.
I’m looking at homes in Westchester, and every property is now listed on some different forum. I think it is nobody’s real interest to aggregate these one one platform. Even buyer’s don’t want wholly efficient markets, they want a deal, or a find. They don’t want to pay top dollar. Seller’s don’t care as much because the average turnover is over 10-years, that’s a lot of appreciation, and it’s a lot of work to do FSBO. Also, one typically doesn’t want the owners to interface with buyers.
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