Recently one of our salespeople asked our broker of record how he thought the role of the real estate professional would unfold in the future.
Big and highly financed technology companies have been and continue to make efforts to seize the real estate industry and in some ways attempt to bypass the real estate salesperson. Other technology sites are trying to capture potential buyers in most cases and sell these leads to real estate salespeople. Still other tech avenues involve a combination of agent and technology services at a discount.
As well, these large tech companies consider real estate “an appealing target for disruption.” That’s because of the fragmented nature of real estate, these companies claim. Fragmented is certainly one way to describe the industry. Possibly a better way to portray it is that real estate is hyper local. National figures talk about nationwide average prices and number of sales. That’s fine to see overall trends, yet what really matters to buyers and sellers is what is going on given market conditions, number of sales and prices on a local level. Take that one step farther and a home’s value is not based on averages but on comparable homes sold relative to the home’s neighbourhood.
According to the 2018 Profile of Buyers and Sellers, an annual study conducted by the National Association of Realtors, the following highlights how Buyers’ use Real Estate Professionals:
Eighty-seven percent of buyers recently purchased their home through a real estate agent. Most wanted to have an agent help them find the right home
About 41% used an agent referred by a friend, neighbour or relative.
90% of buyers would recommend or use the agent again.
The following are Seller highlights from the same study:
63% used an agent that was referred or one they previously worked with.
85% would definitely (69 percent) or probably (17 percent) recommend their agent for future services.
Transaction Becomes More Complex
What’s more the real estate transaction continues to grow in complexity, requiring the help of a savvy real estate professional who can counsel, negotiate and help solve problems as they surface. So the most practical role of tech sites is their ability to identify potential buyers and in some cases sellers; in other words: to generate leads. Beyond that the one-to-one experience between the client and the real estate professional continues to be pivotal in successful buying and selling and the reduction of stress and anxiety that can play a part in the transaction for the most part.
Many top real estate people continue to invest more in technology annually. They also continue to employ traditional methods of obtaining business: direct response advertising, staying in touch with past clients and centers of influence, open houses and more. They see technology as another effective tool in their arsenal. Many casual salespeople seem to view it as the shiny new object to catapult them into more sales.
As well, the iBuyer concept for instant transactions, introduced in 2014 in the US, accounted for .2% of US transactions in 2018. That included 15,000 purchases and over $10,000 sales, this according to analyst Mike DelPrete.
Lastly, and in our experience, any attempt to buy a home sight unseen is anything but a good idea. Enhanced photography, in some cases digital staging and omission of negative features of the home can lead to disappointment at the very least, possible litigation and attempts to back away from the sale. None of the advertising and photography can take the place of physically walking through the property and neighbourhood and getting a feel for what is being purchased with a REALTORS® third eye.
Bottom line: Real estate professionals will continue to play an important role in successful buyer and selling.