Is The Realtor an Endangered Species?
NEW YORK ( MainStreet) As realtors increasingly adapt digital tools in advertising , it is more and more common that homebuyers use a variety of online interfaces to search for their dream abodes . Yet when a Chinese investor recently bought a $13 million unit of the luxury Baccarat Hotels & Residences in Midtown Manhattan without visiting New York merely communicating with his agent through social media platforms an extreme question presented itself: can Realtors be replaced by online technology?
In fact, digital tools and the Internet have reshaped each section of our daily lives and penetrated deeply into the real estate industry with no face-time required. The California Association of Realtors recently released a study showing that over 77% of home buyers used social media in 2014 in their home shopping process, 1.5 times more than in 2011.
Fredrick Eklund, a Douglas Elliman's broker, also known as a star of Bravo's reality show Million Dollar Listing New York , previously told real estate magazine The Real Deal that social media tools like Facebook, Twitter and Instagram contributed to nearly a quarter of his home-selling business.
Home buying behaviors are apparently being affected by mobile apps because of economic incentives to avoid a broker fee. For Realtors who mostly depend on the 6% commission, direct home selling that's conducted only between homeowners and buyers would also further endanger their relevance and value in the real estate realm.
"Anything could be done without the middlemanthat's a reality," says Sissy Lappin, author of the book Simple and Sold (Launched Publishing, 2012). "With technology and social media, real estate firms are fighting back with very desperate moves," she said.
A study conducted by Northwestern University in 2010 found that homeowners who sold their houses on their own can gain 4% on the selling price than those who hired brokers to sell the same properties. In a report published last September called The Future of Employment: How Susceptible are Jobs to Computerisation? developed by University of Oxford to examine the expected impacts of future computerization on the U.S. labor market, "real estate broker" was listed as an occupation with a 97% probability of being replaced by means of computer-controlled equipment. "Real estate sales agent," the person in a brokerage who acts as a sales representative in a real estate transaction, has an 86% probability of being phased out by technology.
"We used to ask travel agents [to help us make travel plans], but now all we need is Expedia," says Lappin. Having recently cofounded a website called ListingDoor.com, which helps homeowners to list their housing information, she hopes to provide a bridge to connect sellers with buyers without the need for broker interaction.