Are the internet and sites like Zillow making the Real Estate Agent obsolete? Not likely.

15 Replies

For quite some time now there have been many people saying sites like Zillow and Trulia were going to make the real estate agent as obsolete as the analog television or the travel agent.

I don't buy it. Either do the numbers, and as we all know numbers never lie.

Speaking of numbers, is zillow ever right when it comes to home values? 

Ok maybe that last jab at zillow was a low blow, but how else could I work in this Kevin Hart meme? 

In 2014 ONLY 9% of homes were sold for sale by owner. Of those measly 9% of FSBO sales 44% of them already knew the buyer. Zillow has been around for 10 years now. When is zillow going to put the real estate agent out of business?

What percentage of homes were sold for sale by owner in 2004? The year before zillow was founded. 14%!

Out of curiosity how do they get those stats?

Especially the one on know the buyer already?

Lastly do purchases via wholesaler show up as fsbo?

I can tell you one thing, as hot as the market is now, I will try to sell my flips via fsbo at least a week or two before turning over to an agent. The last 2 flips buyers have tracked me down via tax records which led to my
website which led to my phone number.

I'm closing one tues realtor free.

I only use Redfin... 

The almost instance access to MLS is key to me plus all the tech factors.

Think UBER for Real Estate...

Flavio

Yeah let's talk about that. I have yet to have a request to check on something found on Zillow where the information was accurate. Maybe they're out there, but I sure haven't seen them. Usually the property was sold long ago.

Just last week I was asked to check a Zillow listing at XXX West Gray in Houston. I was confused by the narrative which said something like "just a few steps from the white sandy beach and crystal blue waters of the Caribbean." West Gray is 60 miles from a beach, and it's not white sand, and the water's not blue, and it's not the Caribbean. So anyway I called the listing broker and he said "oh that's a property we're trying to sell in Mexico." He had no idea how the listing got on Zillow. And when I asked him what was at XXX West Gray, he told me that was his office.

The agent is now involved in many more transactions.  IMO, the leaders of our industry have leveraged technology pretty well to improve customer service.  

Real estate isn't one size fits all - that's where the real estate agent's expertise and experience adds a ton of value.

Originally posted by @Shawn Thom :

Out of curiosity how do they get those stats?

The NAR does a random nationwide sample.

Originally posted by @Fred Heller :

Yeah let's talk about that. I have yet to have a request to check on something found on Zillow where the information was accurate. Maybe they're out there, but I sure haven't seen them. Usually the property was sold long ago.

Just last week I was asked to check a Zillow listing at XXX West Gray in Houston. I was confused by the narrative which said something like "just a few steps from the white sandy beach and crystal blue waters of the Caribbean." West Gray is 60 miles from a beach, and it's not white sand, and the water's not blue, and it's not the Caribbean. So anyway I called the listing broker and he said "oh that's a property we're trying to sell in Mexico." He had no idea how the listing got on Zillow. And when I asked him what was at XXX West Gray, he told me that was his office.

 Haha so did you make an offer?

It really depends on the area. In the greater Seattle area, the zillow prices are pretty on point. But I know some places in california where they are not even close. So it all depends. But real estate agents are not going to be obsolete. Some people think all you have to do is show people homes and your a real estate agents, and so many agents themselves believe that and thats why so many of them suck! lol. Real estate agents make their money in the bidding and negotiation of the deal. Making sure they sell the house but at the same time get the best deal. 

Sold our last four deals FSBO. Might try a R/E agent this summer for a change. Seems to be getting more popular. Ya I know all the stuff about FSBO's selling for less than if they used an agent. However I know I got my comps right, because...I used Zillow.

I only use Zillow for three things:

  • To get an easy link to the county records of a property
  • So I can see a different/previous set of pictures of sold properties (since they're sometimes taken down from Redfin/MLS)
  • They have a better map interface than most other websites

I never use Zillow's numbers/estimates/specs.

Account Closed, I'm assuming you're talking about the Zestimate being accurate?  I haven't seen that to be very true in Seattle.

Hmm, but things might have changed recently.  A couple of months ago, Zillow's accuracy rating in Seattle was two stars:  http://www.zillow.com/zestimate/#acc

@Nghi Le

   really? you think so? Man I dont know, everytime I go back and look at past comps on neighborhoods... the zestimates are pretty close. They may not be so close now, becuase homes frequently get into a bidding war and the house sells 30k overzestimate and over 80k over county accessor values. I understand that other parts of the country zestimate is ridiculously off, but in seattle its pretty close... not too far off form what people are paying. 

In Seattle, I have noticed estimates for some condos on Zillow tend to be way off, generally a lot higher than what they should be.  

For single-family, they seem relatively close.

Thanks for this hilarious article. Zillow home pricing is very odd, I don't know where they come up with their numbers. 

Does that "only 9% of homes" that are sold FSBO include the number where a buyer comes with a buyer agent? Or is their FSBO 9% number only no agent involved at all? While we have sold a few FSBOs with no agent ever involved, the most likely scenario is FSBO where a buyer agent comes and says they will work with you for 2-3% or a set fee. If that doesn't count in the 9% number, then it would be nice to know what that total percentage is, all sales with no listing agent involved.

I do not think real estate agents will ever disappear and may actually provide a valuable service to inexperienced buyers and sellers who do not want to learn the process themselves, but I do think the profession must evolve into a much less expensive service as it makes no sense to charge a seller 5-7% of the sales price when many sellers can now so easily market the property for free themselves using postlets, for example, and recent sales data is more easily available to the average seller.  The 7% is worth it possibly if there is a problem with the property, like on a major highway or next to a corporate park, or if you move out of state and can't be there to show it yourself.   But with more and more states and localities adding transfer taxes or grantor's taxes along with other fees involved, the costs to sell a home these days are huge, and the pressure on sellers' bottom lines will cause something to give somewhere, the weakest link likely being agent fees or involvement. 

No matter how you look at it, there will always be new ideas, challenges and competition in any industry.  This is not bad but only the opposite as it motivates creativity and opens new levels.  

Zillow is not the problem but only part of it.  Is having too many real estate agents creates saturation and smaller pieces of the pie? Or, more collaboration to share the pie? It surely goes both ways.

As mentioned above, personalized customer service and going the extra mile are the keys to have more referrals. Buyers, rely on agents for a source of trusted information which can't be found by FSBO.

At the end of the day, when I see a house offered FSBO, I call my real state agent to work out the details.

Just my 0.02 cents.      

I think many miss the mark in understanding brokers and agents roles.

A lot of experienced investors might do FSBO's on re-sales. Even if that's the case there reaches a point where the investor understands it is important to work on their business and not in it. They make more money having experts in key positions of their business and doing everything themselves would actually cost them more money then make it.

For example I pay for a tax accountant, website team, etc. It's not that I couldn't do these things if I spent umpteen hours on it but I make A LOT of money transacting commercial real estate deals. I cannot touch my earnings per hour doing any other activity. So it makes sense to have experts on my team getting things done fast for me that they do everyday. What would take me a week or a month to solve they do in hours or days. Removing those roadblocks helps me excel even further.

A big majority of the population in the residential space sell or buy once every five years. A lot of contract changes and regulations happen in that time. I haven't looked at residential in about ten years. A friend of mine bought a residential property recently and the amount of paperwork and disclosures I had seen since last time was incredible. More crap to look over from our friendly government helping us means a lot of hand holding for buyers and sellers in the residential space. The landscape is ever changing and I believe that brokers and agents will always be there to serve a need. Cost and what brokers/agents are worth is in the eye of the beholder. I think I am worth every penny for what I do in the commercial space. 

For example if I have 50 clients that believe in me where I make millions a year then I do not need the other 500 naysayers who try to devalue what I do and are a pain to deal with.

I can tell you that many of my colleagues are having record years including myself. I have been hearing brokers/agents are becoming obsolete for decades. I used to have an engineer neighbor across the street say that brokers/agents were ( useless blood sucking vampires! ) lol

Some people see a dying industry. I see a thriving industry reaching heights never seen before with endless opportunities. You can create what you envision and believe if you put time into it and not buy into the negativity of others.    

  

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