Are real estate agents becoming obsolete?

Question

Are real estate agents becoming obsolete? If not, then what do you think are characteristics/ skills they should have for you to work with them?

Jon Holdman · Answer

Its a sketchy proposition to base your value solely on access to secret data.  That may work for now, but its likely to be only a matter of time before even Texas makes this data public.

You don't have to look very hard to find many examples that support the conclusion that real estate agents, as they currently exist, will go away.  Travel agents are one of the best comparisons.  Once upon a time it was very difficult to find data on travel destinations or to book a complicated trip.  That wasn't even very long ago.  I recall booking a trip to Hawaii in 2002 with a travel agent.  Since then I've been back twice more, as well as numerous other trips that I booked fully on my own.

Real estate transactions are complex and are done very, very infrequently for most people.  So there will continue to be the need for some time for people who can facilitate that part of the business.

But even now the listing side of the process is being devalued by flat fee listing companies.  Automated valuation engines like zillow aren't particularly accurate at present.  But neither are agents or appraisers.  Wasn't very long ago that even computer scientists said driving a car was too complex of a task to EVER automate.  Yet look where we are in that regard.  Watch TV ads for luxury brands and they're all touting their automation.  If you think listing a property on the MLS is a more complex task than driving a car you are, IMHO, fooling yourself.  I foresee a time in the not very distant future where sellers can directly create their own listing on the MLS.

The buyer's agent side of the business has more value, I think.  Even that is HIGHLY devalued vs. when I bought my first house in 1987.  In those days the only way to get listings was directly from an agent or driving around.  Now its all online and searchable in ways that even agents couldn't in 1987.  So prospective buyers can search and find candidate properties easily.  Actual showings, though are problematic.  If you're a seller you really don't want random strangers showing up and going through your house.  So I could see some sort of function emerging that is essentially a security function.  Someone who vets buyers (though that is also amenable to automation) and then accompanies them for showings.

More generally, ANY job that involves doing the same thing over and over - i.e., "routine" tasks - is VERY likely to be automated in the coming years.  White collar or blue collar, doesn't matter.  If your job is routine rest assured someone is trying to automate you out of a job.

Something else to consider is exponential growth.  As humans, we tend to view change linearly.  Exponential growth is a whole different ball game.  It can look linear over short time periods.  But its not.  Change happens slowly then very quickly.  So, for quite some time it looks like change is only happening at a slow pace.  Then at some point a tipping point is reached and it changes radically over a seemingly short period of time.  Nothing about real estate is particularly unique.   Its subject to the same forces that give us iPhones and Uber.

Roy N. · Answer

I do not think real estate agents/brokers are going to go extinct any time soon, but I do think the herd will be culled.

There will always be good ones - like the fellow with whom I met today, who took me through a new {potential} investment area.   He has both lived and invested in the area for 20-years.  He knew the boundaries of neighbourhoods - this block good, that one bad - and was able to identify the good, bad and vastly over-priced.  He also indicated several properties he expects to come on the market in the next six to twelve months and why: several of them where bought poorly based upon speculation in the local economy 4-5 years ago and are not being managed well; another bunch are part of a single portfolio where the owner is in his late 70s and has no heirs.

However, for every excellent agent/broker, you are going to have to wade through four who will make you either wonder why they are not working at something else or certain they should stick to pretty houses.

In the commercial space, you will bump into fewer misplaced agents.

@Bryan L.

It swings both ways.  We've had an agent cost us $10K because he spent too much time reading his own press and did not know when to get out of his, and our, way.  In the long term, it cost him way more as none of our business has ever gone back that way.

Zach Sikes · Answer

I don't believe real estate agents are becoming obsolete. Our roles have definitely changed though. In the past, the agent controlled the data. Now, the buyer has more access to information about properties through the Internet. The agent's value now comes down to market expertise, marketing, listing preparation, convenience, peace of mind, and service.  As long as agents continue to add value, they will not become obsolete.

Joel Owens · Answer

Ryan maybe that has some merit in the residential space for little houses.

My clients buying commercial properties millions to tens of millions in sales price that is not the case. They want service and someone to help them. People with this kind of money have people do things for them because their time is very valuable.

Victoria Winters · Answer

Hi Dave,

Your question:  "Are real estate agents becoming obsolete?"  My answer, no.  Perhaps when states make the decision to no longer collect license fees from agents, I may change my answer.  Aside from my rather blunt answer, real estate agents provide much needed services to both sellers and buyers. Depending on the information source, there is an increase of people becoming newly licensed.  In fact, investor agents can utilize their license in many ways to enhance the success of their investment business and provide more service to others as a result.

When an agent presents an opportunity to purchase a property, perhaps listed or not, that fits the buying criteria, I believe that is reason enough for an investor to want to do business with an agent.  It is helpful to utilize an extra pair of eyes.

Joseph Chen · Answer

They communicate well. The real estate market is time sensitive, so you need an agent who will let you know quickly where you stand with your current buying or selling situation so you can move on quickly to another property or potential buyer.

They’re proactive.  Good agent should be proactively calling potential buyers, communicating with existing customers and constantly chasing new leads.

They listen. As a client or customer, you’re the one who should be doing most of the talking and making sure that your agent understands your special requests and needs. A good agent should be asking all the questions not the other way around.

They’re client motivated.  A good agent will always have their clients needs as their top priority.

They can adapt to their clients needs. It’s the responsibility of a good agent to suss out the clients preferred method of communication so they don’t feel either ignored by silence or pressured by too much communication.

They know their clients time frame.

They know their customers selling motivation.

AND

They aren’t afraid to give you their last 20 clients as references.

Dev Horn · Answer

Short answer:  NO - far from obsolete!

Bryan L. · Answer

I don't know, you tell me.  i recently saved a client $2000, and another $3000.  but hey, don't use a realtor if thats what floats your boat.

Ryan Harthan · Answer

I think that the value of real estate agents is certainly going down.  As an agent myself in Texas, one of the main reason buyers must use an agent is because Texas is a nondisclosure state - we don't disclose the nature of the sale of real estate to the public.  Therefore the only way to figure out what a house is worth is to use an agent.   But like every other profession 5% of the professionals conduct 95% of the business.  I guess ideally you're supposed to use an agent for their knowledge of the transaction.  I also see that a lot of investors are going to spend a couple hundred dollars getting their license if they're going to be investing a couple hundred thousand.

Joel Owens · Answer

Dave not even close.

I am having record years.

Now are mediocre brokers/agents becoming obsolete?? That is a different question. Just like any field the best rise to the top. If any field out there contracts the weak at the bottom get cut out first.

Are real estate agents becoming obsolete?

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