Are real estate agents going to be replaced?

Question

Hello fellow bp members. I recently read an article talking about an app with a flat fee service meant to save on commission and be a better way to purchase homes. I was wondering if technology will replace traditional real estate agents?

What's your guys thoughts?

Steve Vaughan · Answer

Not likely.  As Russell mentions, people just don't know enough to transact their largest investment safely on their own.

I talk to a lot of FSBOs and mom and pop DIY landlords and avg Jack and Jills.  These are people that want to do it themselves. They are clueless on multiple levels.  No app will change that.

I know when I buy a FSBO, I will be doing ALL of the work.  Fill out these disclosures. I'll open escrow with this EM. My inspector is coming next Fri. Get the seller info sheet back to title. Send in the 35R. Get that carpet changed with this guy. Get jimbo at this number to patch the roof and install flashing.  Etc.  Guess what? My buy price reflects this work.

Russell Brazil · Answer

It is unlikely. Technology drives changes in the business, but hasnt replaced agents.  Technology hasnt even had a measurable impact yet on the fees that agents charge.  Average commissions are inversely proportional to the number of licensed agents in a market, which fluctuates with the economy. When the economy is hot, the number of licensees increases, and fees go down. When we are in recessions, the number of licensees shrinks and fees go up.  This has been the only measurable affect on fees.

And while many on this board may not need agents, they are biased then towards thinking that technology will eliminate them like in other industries.  But any agent doing even a moderate amount of business can tell you, the average consumer of buyers and sellers need tons and tons and tons of hand holding to buy or sell a house.  The only thing that would change that is not technology, but rather a major major cultural change.

Tom Shallcross · Answer

I share the same sentiments with the above responses.  One big point @Russell Brazil makes is our point-of-view is probably skewed.  Maybe you might not need an agent because you've made xx purchases, but many individuals only make a very small handful of real estate transactions in a lifetime and will need a trustworthy agent to hold their hand.  Home purchases are emotional for non-investors and there is a need for the human interaction to solve all the nuances that occur when making what could be the largest investment of their life.

Technology will play a major roll in continuously improving the overall experience, but it still feels we are a distance away from replacing agents.

Frank Wong · Answer

Technology has certainly improved the way buyers find information.  Almost all the data is available online.  I don't think that technology is replacing agents anytime soon, instead, it has actually helped improve the experience and made everything more transparent.

People care about their time, getting the right information, trust it will be done, and efficiency.   A top agent knows this and will take care of these needs.  When a client needs something now they call their agent.  This is where technology at this time can't replace.  My clients can call me and know that I will get the information they need or solve their real estate issue asap.  The trust and bond are there and they know I'll jump over a mountain for them.

Could agents be replaced in the future with AI, robots, and self-driving cars?  I think that is certainly a possibility and I think the rest of the world will change along with it.  At that time, I will have all the investment properties I want and be at a different stage of my life where it won't affect me.  Always have to adapt to the changing environment.

Keith A. · Answer

there are just some times of the year where I need to rely on my rockstar agent. I haven't found anything that would replace someone to do the showings and do all she does when I am really busy. During such times I have found that an agent is worth every penny and irreplaceable.  I doubt I will ever reach the point where I would let a potential applicant use a keyless entry pad to tour a property without me or an agent. Must have a human with them.

Are real estate agents going to be replaced?

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