{"id":398,"date":"2015-08-07T11:58:00","date_gmt":"2015-08-07T11:58:00","guid":{"rendered":"http:\/\/dev.gahomesdigest.com\/blog\/the-beginning-of-the-end-of-real-estate-agents.html"},"modified":"2015-08-07T11:58:00","modified_gmt":"2015-08-07T11:58:00","slug":"the-beginning-of-the-end-of-real-estate-agents","status":"publish","type":"post","link":"https:\/\/search4.homes\/the-beginning-of-the-end-of-real-estate-agents\/","title":{"rendered":"The Beginning of the End Of Real Estate Agents"},"content":{"rendered":"

The Beginning of the End Of Real Estate Agents<\/h1>\n

\"SoloproThe end of real estate as we know it is coming but it’s not going to happen as you might expect. \u00a0 This week Inman Connect<\/a> hosted it’s week long look at technology, real estate, success and other things, include a biologist with a wicked beard. \u00a0One of the new “scary” companies (scary to real estate agents that is) is a company called Solopro. \u00a0Basically Solopro allows consumers to shop for services in an a la carte fashion from real estate and real estate related professionals in exchange the consumer gets a fat 3% rebate. \u00a0\u00a0<\/p>\n

The real estate agents immediately go to social media after reading news that Lowes is throwing support behind this effort. \u00a0My question is how is this different then a rebate drive brokerage like Redfin or a flat fee company? \u00a0It’s another offerring that will appeal to DIYers just as these other services do. \u00a0I don’t believe this is a game changer. \u00a0There’s several reasons.\u00a0<\/p>\n

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  1. The market isn’t ready for it. \u00a0Real estate agents are still a necessary evil for even those people who hate agents. \u00a0It’s been proven time and time again that an agent adds value even if they are not that competent. \u00a0This is a case of Webvan. \u00a0Great and wonderful when it came out and yet the market wasn’t ready for it. \u00a0Now look around 13 or so years later and see all of these grocery delivery options available. \u00a0The Uber generation is alive and well now.\u00a0<\/li>\n
  2. Agents and Consumers don’t understand the terminology. This isn’t a knock on consumers in particular, but rather agents. \u00a0Agents are awful at communicating the value of the services they provide. For example, solopro has the option to hire an agent for a CMA. \u00a0For a consumer to pay for the CMA they would need to see the value of it. \u00a0Why not simply get an appraisal? \u00a0The best value-add an agent can bring to a transaction is often negotiations and there’s no option here for that other then hourly rates.\u00a0<\/li>\n
  3. Consumers really don’t want to pay upfront for much of anything. \u00a0My perspective is from Atlanta, I could however see this playing well in San Francisco where the average condo is $1 to $2 Million. \u00a0Look at the flat fee market and you’ll see their fees are largely under $1,000 to put a home on the market. \u00a0They’ve not been able to raise prices in Atlanta in over 13 years. \u00a0I think if given the choice many agents (myself included) would rather be paid upfront instead at the end. \u00a0This transfer of risk is what creates these enormous commissions.<\/li>\n
  4. Driven to Zero the lowest common denominator comes out. \u00a0 In marketplace “apps” or websites the vendors compete the only way they can, via price. \u00a0This creates a race to zero. \u00a0The only agents that are interested in a $50 CMA are those without any business. \u00a0Jarvis Team Realty in Atlanta for example often saves clients 3% or more and the amount of time we save clients makes it worth it alone to hire us.\u00a0<\/li>\n<\/ol>\n
    I’m not saying it’s a bad idea, in fact, it’s a good idea just not a “game changer” idea at this time. \u00a0The company will do well in certain markets to be sure, but it’s not going to revolutionize an industry.<\/div>\n
    \u00a0<\/div>\n

    Now that you know that Solopro isn’t a game changer you might wondering why I started off saying this is the beginning of the end. \u00a0I honestly don’t think there’s any technology that is consumer facing that will change the industry to a point where it’s widely accepted enough by consumer and agents alike to create this massive shift similar to what happened in travel. <\/strong>\u00a0The change will come from within. \u00a0As the older generation of real estate agents (currently the average agent is a 55 year old white woman) retire\/quit out of the business this new technology based generation will step in. \u00a0They will demand tools and services to make their job easier. \u00a0Lockboxes now have bluetooth, services like ShowingTime<\/a> remove the need to coordinate showings and feedback. \u00a0Companies like MyOutDesk<\/a> make it cost effective to hire an administrative staff and agents are expanding all over the country. \u00a0\u00a0<\/p>\n

    As these agents expand and demand they will unwittingly allow the very vehicle that propelled them to success become the thing that will erode their business. \u00a0Each piece of technology takes a piece off the agent’s plate but in turn, commoditizes the act down to a small monthly fee. \u00a0 In the end there’ll be nothing to stop a well funded company from bolting together or creating their own suite of products that does exactly what Solopro wants to do now. \u00a0The difference will be instead of “disrupting” the industry now, it’ll be the agents that lay their own path out of the industry. \u00a0<\/p>\n

    That sounds like a bleak future, but it’s really not. \u00a0The reality of it is that the problem with real estate is one of leadership.<\/strong> \u00a0Once the industry goes to technology and commoditization it will leave the true leaders, the true fiduciaries still standing. \u00a0Service that looks out for the best interest of the clients, saves time and money and fights for solutions cannot be replaced. \u00a0If you doubt this, use expedia and have an issue and tell me you don’t want to pull your hair out when the customer service person asks you to spell Mariott three times. \u00a0No, PROFESSIONAL real estate agents will always have a place and make a good living. \u00a0It’ll be those, the 90% of the industry, that sell 12 homes a year that will be out of business, just not now and not because of solopro.<\/p>\n

    Related Real Estate Resources:<\/strong><\/p>\n