By consuming “direct” online, not only do you get to pocket middlemen fees; in most cases, it’s much more convenient.
When home search websites started popping up in the late 1990s, “experts” from Inman to newspapers were predicting the demise of the real estate agent. At the time, brokerages like ZipRealty and Redfin were online operations offering sizable rebates to consumers as a benefit of online efficiency.
Heck, if homebuyers can find homes for sale on their own and save many tens of thousands of dollars, who needs a real estate agent anyway? This disintermediation would certainly put agents out of business. Wouldn’t it?
While it’s true that the vast majority of today’s homebuyers search online for homes, a record percentage of them continue to use their local real estate agent to close the transaction. Even Redfin and ZipRealty have all but abandoned their commission rebate programs in favor of a more traditional brokerage approach.
The data clearly shows that despite the huge rise in online home search, consumers are using real estate agents in record numbers to close the transaction. Why?
For most people, buying or selling a home is a rare event. On average, people keep their home for seven years. It is simply an unfamiliar process.
There is a large amount of money at stake. If people are at all insecure about their ability to handle the transaction, they will not risk making a mistake with this amount of money on the line.
Real estate is not a commodity. Unlike airline tickets, every deal is different and complicated with many unique emotional and legal factors.
It’s a people business. A well-connected agent makes all the difference in finding that best house or that best buyer.
Agents bring critical local market knowledge. What’s going on in the area? What specific factors most affect value? What’s the agent on the other side of the transaction like to deal with?
Access to Pre-MLS and Non-MLS listings. Well-connected agents, such as Top Agent Network members, have special access to properties for sale and motivated buyers that can’t be found elsewhere.
Cutting out the agent may not save the consumer any money. Both the buyer and seller expect to pocket the commission savings. Plus, did you pay too much for the house, or sell too low?
Difficult for buyers and sellers to deal directly with each other. It’s an emotional process. Egos and tempers can flare. Good agents buffer and negotiate issues that buyers and sellers mess up when dealing directly.
The skilled, experienced, well-connected value-adding real estate agent is not going away any time soon! And whereas Inman once predicted the demise of the real estate agent, it is now publishing works of contributors who tend to agree. Redfin, too, has revised its business model based on the recognition that agents “are here to stay” and serve a function no one else can.
If you are a buyer or seller who tried to “go it alone,” what was your experience? Agents, what are your thoughts?