Hello BP community,
What are your thoughts on the real estate market going completely virtual in the next 5-10 years? Zillow purchasing Trulia for close to $3B shows the rest of the world they have something up their sleeves. The real estate agent and wholesaler could eventually be squeezed out as home owners will have a platform to sell their homes direct to end buyers. Does anyone have plans on how they will adapt? Is anyone okay with sharing some of their thoughts on this? Thought provoking feedback appreciated! Thanks!
I agree with an implementation of the buying process online.
But not many end buyers will purchase a house to be rehabbed.
And there are a lot of property owners that doesn't even consider selling their properties, until a wholesaler asks him to do so.
Let's wait and see!
The work of a real estate agent has already changed. There is not much skill in matching buyers with MLS listings. But the real work begins afterwards. Life will become very hard for hobby realtor. That is my guess.
Any one who totally trusts a Zestimate is the fool being separated from his money. Read their disclaimer. Even they have concerns about their Zestimate.
There are new startup companies coming out that will try to buy and sell without the use of the MLS, but even they are leveraging the use of local real estate experts. The Realtor association is a beast and will take some time before traditional homeowners are comfortable selling without an agent.
Hmm easy as it sounds i do not see this happening. Look at tesla ( i know i know its cars not houses ) many states made laws making illegal to sell cars via internet sales only. and that was just cars imagine what the states/government will do when it comes to houses. People over look what realtors really do. imagine a bunch of people typing up contracts to sell a house and how many legal issues it would cause. I know willow could very easily add contracts but that is still counting on the everyday average person with no schooling to type in the correct wording to protect themselves and not get sued. Id venture to say zillow is happy making the millions/billions they already do off of us agents and advertising.
The answer is not to look at it as an absolute either/or existence. I see them both coexisting and reliance on real estate agents going down but very slowly.
I already see in my market some wholesalers and other sellers listing properties on Zillow and getting lots of leads. At the same time, Zillow is helping some agents get a lot of business too. One of the agents that I work with advertises on Zillow and his business has exploded since he started advertising on Zillow.
The business will get more competitive for agents with Zillow because when you go to Zillow it shows reviews for real estate agents and if you have one bad one, that can really hurt the business opportunities. May be instead of 80/20 rule for agents, it will be more like 90/10.
I agree with you @Emerson Miranda I don't think true wholesalers (who actually get OFF market properties) will be pushed out. They are in many cases responsible for the sale of a property which otherwise would have sat a rotted away.
@Andreas W. I agree with you as well. Unless you are an agent who has a wealth of knowledge regarding the business and process of buying/selling a home you may end up sitting on the sidelines. To cough up 3-6% commission to an agent who opens my door so a buyer can view my home is an expensive service. As people become more engaged with the idea of buying and selling online I believe the middle man who can't adapt will be forced to take a back seat. Of course I don't see this happening tomorrow or next week but 5-10 years from now...we could be looking at a huge change in the real estate industry.
@Justin S. Time will tell. Direct to consumer sales is the wave of the future. With social media reaching over 3 billion people worldwide...you are witnessing a new form of the "middle man" in the making.
@Jeremy Davis A company like Zillow will never settle for what they are currently making..whether it be millions or billions...spending $3 Billion to acquire a competitor shows they have plans on seriously impacting the real estate market in the near future. As far as contracts, one could easily contact a closing attorney to write up a contract that protects their interest for a fraction of the cost you would pay an agent. I've purchased and sold over a dozen properties using the same contract. Just changing the address, dates, and purchase price.
@Sharad M. If you can't beat them.. find a way to join them and PROFIT!
Thanks everyone for your feedback!
Real estate agent advertising makes up the bulk of our (Zillow's) revenue. We have zero intention of cutting out agents or brokering real estate. Agents are the ones writing checks to Zillow.
Zillow and Trulia combined capture about 4% of what agents spend on advertising. There is still PLENTY of room for growth in the advertising arena.
While it's not true for investors, the simple fact is that buying and selling real estate is an infrequent, expensive and emotional process for most home buyers and sellers. It's difficult to imagine an app or a website replacing agents for the vast majority of buyers and sellers.
No doubt that technology is changing the role of real estate agents. The good ones are moving from providers of the data to interpreters of the data. The buying process is tricky and convoluted for most people -- who buy a home every 6 - 8 years on average. There will be a need for agents / consultants to guide folks through that process for quite some time.
I 100% agree with Jay, I think agents who get licensed just for a fun part time job will get squeezed out and full-time agents who make themselves a resource of information and guidance will prevail. People who do not make a business out of real estate do not spend the time learning everything that we all here do. They are going to need that source of info, giving piece of mind, rather then going through a complex transaction alone. Zillow gives us a much better picture than the old books at a grocery store though! :)
You have to remember that we are all answering this from the skewed perspective of real estate investors who buy and sell homes regularly. The average consumer moves every seven years or so and is way less comfortable marketing a home, negotiating a sale, completing contracts, and making sure the transaction makes it to closing without a hitch. For people who do this regularly, real estate agents add little value. However, for the vast majority of home buyers and sellers, agents are great hand holders and integral to the transaction.
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