There are many who predict the demise of the REALTOR, that one of the portals like Zillow will bypass agents and brokers and deal directly with the consumer. Just last week Zillow added a partnership with Uber to drive prospective buyers to listings. However, I think the death watch is way premature and unfounded.
Statistically the numbers show a very different picture than one of people moving away from REALTORS and going to the Internet to do it themselves. National Association of REALTORS Study of Home Buyers gave us these examples:
Average Search Time By Buyers:
2001 - 7 weeks.
2013 - 12 weeks.
Percentage of Buyers Who Used A Real Estate Agent:
2001 - 69%
2013 - 88%
Average Commission Paid:
2008 - 5%
2013 - 5.4%
Research makes it pretty clear that consumers want someone to help them through the complicated process of purchasing/selling a home.
Does that mean that nothing will change? No. I believe you have already been seeing a dramatic change in how business is being done. I believe you will also see a polarization of business models to fit different wants and needs in the market place.
In the REALTrends book, "Game Changers" beliefs on what the real estate landscape will look like are discussed.
The general idea is that you will see two distinct business models, the Counselor and the Facilitator. The Counselor is the agent who is a top professional, knows the market, knows how to interpret the flood of data and becomes that guide to maximize his/her client's experience. This is almost a concierge service level experience and will be valued by the consumer at a higher commission rate for the higher level of service. The other will be the Facilitator who will be there to serve the client who is comfortable doing most of his/her own research and processing of the data without expert guidance. They simply want someone who can facilitate the the buying or selling process to make sure things happen when and where they should. These consumers will choose this level of service expecting a discounted rate.
Today, both service levels are easily identifiable, but at present the fees are not distinguishable. That is likely to change. Think in terms of Nordstom vs Wal-Mart. Both are very successful business models but cater to different consumers and at different fees. Both the Counselor-approach and the Facilitator-approach could find that their businesses and incomes increase dramatically as they better market and brand themselves to the consumer who wants the type of services they provide. The Facilitator might end up charging less in fees per transaction but may find they have a greatly increased amount of business. Teams will likely continue to be a growing trend in both models as well.
There is one group that may find themselves on the outside looking in, and those would be the Generalists, those in the middle. Generalists are those who aren't keeping up as the experts or aren't creating operating systems to allow them to be efficient with the facilitator transactions processes. We can look to the retail world and see what is happening to the retail generalists like Sears, J.C.Penny's and Kmart to see how the world is moving away from that model.
Bottom-line is this: if you have survived and thrived in the Real Estate industry over the last ten years, you should continue to do so over the next ten years as well. If you study the opportunity and position yourself to help move the ball on these changes, you will likely see serious growth.
