Tuesday, February 20, 2018

Are real estate agents becoming obsolete? Asked and answered.

For residential real estate brokerages, the beginning of a new year can bring many changes.  It's agent recruiting season.  There are several big conferences.  Everybody (including me) wants to weigh in on how the industry will change in the coming year and future.  

This year, the r.e. industry talk has all been tech, tech, and more tech, such as:  Artificial intelligence will make agents obsolete.  Agents need more tech tools.  For brokerages, "my tech is bigger than your tech" is the new rallying cry.  Even the head of Keller Williams has stated, "We are no longer a real estate company.  We are a tech company."  What does this mean, and how will it impact home buyers and sellers?  Regardless of what you hear, I believe tech will have little impact, that it hasn't already had (Docusign, Zillow, Redfin), on residential real estate.

This is coming from an agent who loves technology.  I had a website in 1998, before most people even knew what a website was.  I've had this blog going since 2008, for pete's sake.  Docusign enabled me to start my own brokerage.  My social media footprint is strong, and I've tried (and paid for) lots of shiny new stuff along the way.

So, if I love tech so much, why am I flying in the face of industry "experts"? Because agents in wear at least two hats.  Sure, you can find a home online.  If you're a seller, you can create video walk-throughs and hope nobody pesters you to actually see the house.  But the second part of any real estate transaction is negotiating, shepherding, and managing the sale.  It is an even bigger part of a transaction than the initial find/buy, and it takes a client-centered, individual touch that no tech can provide.  As an example, here is a post from the online blog Quora:

Sean Hess
I am a Realtor and a Broker, and if you could just jump online and buy a house you wouldn’t need me. Actually, there are auction sites where you can buy a house online, so you really don’t need me.

But I will always have a job, and I chalk it up to human nature.

Buying a house should be easy. You should be able to go out and find a house you like, and then buy it. But there’s so much drama.

Here’s some of the issues I’ve seen pop up over the years:

A buyer wanted to buy a house near the beach, and yet seemed astounded when I advised her that she needed flood insurance.

I had a seller tell my customers as that some river rocks around the house made it “termite proof.” I had to convice these customers that there is no such thing as “termite proof” in Florida.

The first thing almost every buyer asks when they sign a purchase agreement for a home is, “How do I get my money back if…” (the question is always open ended). In other words, they’re already thinking of backing out before they’ve even made the offer. 

In a sale where I had the buyers, the sellers claimed on a written disclosure that the home never had termites, yet proudly presented receipts for work done to repair “extensive termite damage.”

I’ve had the sellers in a transaction swear a home was termite free. After termites were discovered and a pest service came out to fumigate, the neighbor strolled over and said, “Well, they’re finally doing something about those termites.”

After a lender told me three days before closing that the buyer’s paperwork was good and we would close on time, the lender literally disappeared. I had the sellers and it was a very rough month until we could close again with another lender.

I once had a couple lose a house because they put off some required paperwork in order to go play bingo.

At a home inspection one of my partners attended, he opened the door to find a man with a gun drawn. The seller didn’t bother inform the tenant (with the gun) that people were coming over that morning. The tenant thought someone was breaking in.

Is a pattern emerging here?

So why do you need a Realtor? 

You would think it’s the marketing, the access to all of the homes, knowledge of certain neighborhoods, the understanding of contracts, or all the background expertise about inspections. But it’s not.

Because in every real estate transaction at least one of the parties visits Crazyland somewhere along the way. And that’s normal.

The Realtor’s core value, the sole reason we exist, is to keep the other side honest and to massage away problems when they happen.

A real estate sale is probably the highest dollar transaction a regular person will ever be involved it. It creates a huge amount of stress.

Because of this stress I often see people at their very worst.
Something goes wrong and they get so upset with the other party that they are willing to cut off their own nose to spite their face.

They break promises and lie because they think telling the truth will cost them money. Usually it ends up costing them money anyway and it always takes a Realtor to iron things out. With grace and with tact.

So even though I’m the business of selling a staple product (food and clothing being the other two), I actually owe my job to human nature.

Honestly, I would rather deal with sane people. But when one of my agents comes in with a transaction blowing up I tell them, "That's our job, that's the reason they need us. Let's go save somebody's world again..."

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