OK. Everyone needs to hold their horses because clearly, RedFin and Zillow haven’t completely annihilated our Real Estate Market – and yes, there is still a need for agents and brokers. Why? This post should clarify why and how our duty as Realtors won’t be compromised by Online portals – or brokerages like Redfin.
So yes – although the gossip drama queen/king of your office may have a different side to this story, we as Realtors haven’t been totally annihilated or kicked to the curb by our clients due to the success of Redfin, Trulia, or Zillow. They still want and need our services. But at Pacific Union – we don’t view this as some mystery yet to be solved – but rather a logical response to these services entering our marketplace. Real Estate professionals are not dinosaurs – see blog post about this – and will not be as easily kicked out of the career positions they for so long and hard.
Pacific Union blogger discusses where Brad Stone, author of Businessweek.com post about Redfin and Trulia killing the role of the agent, falls short. In the end of the day, these websites are just websites – and unless they provide some additional benefit to the consumer – they will remain, regardless of their impressive web traffic, just websites. Consumers are intelligent and motivated – they can move around a keyboard with the same skill as any of us – and we cannot fail to recognize this. So – if they can do something on their own – and save money while doing so – you can bet your bottom dollar, they sure will. “That’s why Expedia.com has supplanted travel agents, online banking and ATMs have reduced banks’ physical footprints, and Amazon.com has become a behemoth in the book industry. Consumers saw the benefits and jumped aboard in droves.”
That being said, RedFin has yet to take over the Real Estate industry – despite it’s recent expansion and move to places like Orlando, Florida. With all the marketing and branding of RedFin – at this point, it is clear that RedFin simply isn’t a good value proposition to the consumer. The Real Estate industry remains to be the last true vestige of commission based sales for one reason – because not all homes are created equal. Real Estate is not a security – or a future rate that can be bought and sold – like the stock market, or a hotel room rate. Real Estate is emotional – and not every house makes a “home” for different people. That is why our job is so much fun! We see the reactions of our clients – and adjust on the fly – to ensure we are showing them property best suited to their given needs and wants. A travel agent doesn’t have the same responsibility – because selecting a hotel room, or plane seat – doesn’t require the same due diligence as buying or selling a home. Generally speaking – an isle seat costs more because out of the 3 options – most people would prefer the extra leg room – simple as that. But when discussing a home – especially in a market like San Francisco – a home (for example) up in Twin Peaks with a view of Treasure Island through Market Street might be worth a whole lot more to someone who grew up on Treasure Island than someone who did not. They might be willing to offer more – while someone else who doesn’t care about that small detail – might not. No computer algorithm can ever take away the Realtors ability to price accordingly.
Simply put – consumers want information – and they will get it, with you – or without you. In the end of the day, complete transparency is where the Real Estate market is heading – but not in a direction that will eliminate the role of Realtors. Rather, it will change the role of Realtors – from gatekeepers to an encyclopedia. It will only make for better, more educated Reatlors. Customers are smart – and they think Realtors are trying to get “one-up” on them.
For agents – we simply need to plant our foot and show the value we bring to our clients. In the end of the day – we want to close as many deals as possible – and from those deals, generate the greatest possible referral network. With bidding wars and a hyper-competative market here in SF, why would any agent worth their grain in salt ever purposely steer a client in any direction. We want to help them find exactly what they want. “In 2011, 88 percent of home buyers used the Internet as a source of information in their home searches. Good luck trying to keep a client from stumbling on a home you want to hide!” And as much poor sentiment we as Realtors feel from the public at large – we are still only as good as our next referral – and the information sources we can give to our clients.
There is a reason why For Sale By Owners aren’t the norm – and that is because the time and energy it takes to list a property is hard enough – but try doing so without the backing of a top-tier Real Estate firm. To do a FSBO without hiring an attorney is simply foolish. And the costs associated with this could wind up costing more than just paying a commission. In a city like San Francisco – which is experiencing an all time high LP/SP ratio, you want to ensure that your listing gets all the attention it deserves.
“Let’s take a look at the real world instead. According to the National Association of Realtors, homes for sale by owner netted an average sales price of $150,000 in 2012. For home sales assisted by a real estate professional, the price spiked to $215,000. That’s a whopping 43 percent difference.
We’re betting that most consumers are savvy enough to use the Internet and to understand the real FSBO numbers. So, sorry, we don’t buy the argument that hapless consumers are just being misled and misinformed and THAT is why they aren’t flocking to Internet brokers.”