The Push and Pull Forces on Real Estate Agents
For real estate agents today, work can often feel like being pushed and pulled in opposite directions all at once.
On the one hand, new technologies like automation and big data analysis are set to shake up the industry, as they already have for many other sectors, and some even wonder if agents will ultimately be replaced by these advanced technologies.
Agents are often asked to provide even more personalized value for their clients today than they did in the past. In some cases, this means on-the-go availability for answering questions from clients and vendors, or to schedule requests for new showings. At other times, agents are expected to be even more knowledgeable about the latest local market and neighborhood trends, with any gaps in knowledge being criticized from the sidelines.
It’s a dilemma in which agents are simultaneously told both “we don’t need you” and “we need you more than ever.”
A Tale of Two Articles
This point is well illustrated by two recent articles. In one, a real estate tech firm startup aims to replace agents with robots and big data systems. In the other, a school district turns to agents for help improving its image.
Jack Ryan, CEO of REX Real Estate Exchange, recently told Long Island’s Newsday that real estate fees are “just crazy high” compared to other industries. A former Goldman Sachs partner, Ryan told the news outlet REX charges a selling fee of just two percent, rather than the traditional selling commission of five or six percent, in its operations in California and Long Island. Ryan pointed out that stock trades through a traditional brokerage used to cost investors 12 cents per share, but now command less than a penny per share.
Another Long Island firm, EasyKnock in Sag Harbor, N.Y., commands only between one and 1.5 percent sales commission, does not use brokers, and even forgoes listing client homes on the Multiple Listing Service (MLS) of Long Island. The article notes that most buyers start their search online without an agent, and says agentless tech firms are just looking to take that to its logical conclusion.
At the same time, stories of the importance of agents are plentiful. In Pasadena, Calif., NPR reports that the local public school district enlisted the aid of area real estate agents to share accurate and up-to-date info about district education quality.
Despite a typical home price of $1 million, Pasadena public schools have reportedly struggled with reputation. About half of area students reportedly attend private school or a public school outside the district, the highest rate of any similarly sized district in the nation. Officials say lower ratings for area public schools are skewed.
So the district created a “Realtors’ Initiative” program a few years ago to get help with their reputation from local agents. The superintendent hosts a monthly lunch with interested agents, school officials visit brokerages to answer questions, and agents even have the opportunity to volunteer in area schools. All of it happens so that agents can be more knowledgeable about local school amenities and programs when their clients ask about Pasadena schools. According to the article, progress is being made, as more buyers are educated about educational opportunities in the district.
Automation Is Part of Industry Disruption
In a sense, this push and pull that many agents feel is just the “disruption” of the industry that’s talked about so much. REX does have a point: automation technology can help sell homes — it’s true that 90 percent of buyers first begin their search online, and the scale of REX’s system, which can reach up to 50,000 homebuyers, compared to a typical agent’s rolodex of a few hundred, is advantageous. Ryan told reporters, “By refining the selling process, we have turned buying and selling real estate into an easy process, not one that consumers dread.”
However, it seems unlikely that real estate agents will go the way of the dodo anytime soon. Recently, Inman made a list of all the work juggled by today’s real estate agents. As the agents reading this know, the agent role is characterized by wearing many hats to facilitate the sale. There are inquiries, emails, texts, the monitoring of MLS activity, database maintenance, marketing, scheduling showings, meeting new clients, setting and keeping appointments, negotiating offers and managing the sale, plus all-round problem-solving duties. Some agents are even learning to fly, as aerial drone photography becomes the latest must-have in real estate marketing.
All told, the demands of being a real estate agent are increasing, not decreasing, as technology advances the field of property sales. “Discount brokers have attempted to be around for many, many years,” Joe Moshe, a brokerage owner in Plainview, N.Y., told Newsday, “and they just fall away because it is important to provide good personal services to the seller and the buyer. At the end of the day, most people are still relying on the value a real estate agent provides.”