What the job of a real estate agent will look like in 10 years

[Alex Tkachuk]

Predicting what the real estate industry will look like beyond 10 years is hard, but I can safely say this: Within the next decade, real estate agents will no longer be showing homes – with exclusion of the luxury market.

Buyers can already do a bulk of the home-shopping process online – from access to all available homes, detailed information about neighborhoods, to top-rated real estate professionals, including agents and lenders, to getting pre-approved. The only reason they connect with an agent is because the process requires it in order to move forward.

Millennials are the largest share of home buyers – a whopping 36 percent – and this number is expected to double within the next decade. What does this mean? Millennials have been brought up in a society of “NOW” and “instant gratification,” and this has become the catalyst for disruption to many markets, including stock trading, the taxi industry and retail, to name a few. What is important to highlight is that what is common in any disruption is that when you make something less costly, frictionless, and available, it expands the industry.

Let me elaborate on this a little.

About 20 years ago, if you wanted to buy or sell stocks you were required to call your stock broker to execute the trade. When a platform was created that provided the capabilities to each independent investor first, it reduced the cost significantly, and then the industry grew by more than ten times. The same can be said about the taxi business when Uber came into the picture and the retail industry with Amazon.

The point I am trying to make here is that when you remove the gatekeepers, and connect the silos only then will we will see true disruption in the industry.

So, what will this look like for the real estate industry in 10 years? Let’s discuss.

Increase in Number of Homes Sold

Complete disruption once we remove the friction and complexity of buying/selling a home. This includes: providing the ability to get pre-approved online with a few clicks; finding the home you like on any of the current real estate search portals such as Zillow, Trulia, Realtor.com; scheduling a showing directly on those sites without the need of an agent (which can easily be accomplished with preapproved-verified buyers); submitting an offer; and having access to all parties involved in the transaction, including vendors.

This will create a massive boom in the industry, as we can expect to go from 5 million homes sold each year, to 10 million.

Decrease in the Number of Agents

What about the two million licensed real estate agents? Well, the Danger Report commissioned by National Association of Realtors and researched by T3 Sixty, sums this up well:

“There are too many real estate agents that are simply not qualified to the level they should be. When combined with a lack of basic competency it could be destructive and harmful to both the industry and the consumer.”

I believe that we will see a very large decrease in the number of real estate agents – possibly from two million to 500,000.

The real estate agents of today and in the future though still will need to guide buyers through the closing process, providing expert advice and helping keep things on track and organized. With people making such a large purchase (likely the largest of their life), I believe having someone to communicate with in person or over the phone will always retain its value. In other words, showing agents will merge into transactional agents – instead of running around showing homes to 10 active buyers, they will sit behind their desk and provide any assistance needed over the phone to 50 home buyers going through the buying process.

The transaction process on the agent’s side will be completely digitalized where the client, agent, lender, transaction coordinators, escrow and vendors will all be connected. Real estate agents of the near future will be amazed at how inefficient the process is today – the same way we are amazed at how the process was in 1997 with the MLS Books.

Reduced Commissions, More Transactions

Yes, like all industries that have been disrupted we should expect to see commissions reduced significantly. However, this should not alarm the agents because while they will make less per transaction, the amount of transactions will significantly increase.

Agents of the future will still be able to rely on earning a substantial amount.
Agents Should Be Preparing Now

Essentially, agents will become better at their jobs because buyers will be more educated coming into the process and the tools and resources will be there to assist all parties involved.

There will be a learning curve for those established real estate agents who have been doing business a “traditional” way for several years. Those who adapt to the demands of online consumers, however, will see the most success because they will be delivering a better experience, and those experiences will lead to positive ratings, and ratings, as you know today, are the next generation of online gold.

If you haven’t begun implementing more technology in your business, I highly encourage you to start now.

Efficiency isn’t something you will see right away by adopting innovative platforms because there will be a learning curve, but once it becomes part of your business process, it certainly will change for the better. And if you are working with the right technology vendor, they will have the right amount of training and customer service available to make sure the transition is as seamless as possible.

For those worried that the job of a real estate agent will go away because of technology, I say this: If you agree to become more of an advisor to the client during the transaction, providing guidance and resources, while leveraging current technology and doing everything you can to stand out from a customer service perspective, then your job will never go away.

Innovation will continue at a rapid pace though so make sure you follow it close and become an early adopter as much as you can.