Will Realtors go the way of the DoDo bird?

[Anonymous]

I don't think realtors are nearly as valuable as they were 10 years ago with all the info on the internet. The only issue is that the "public" does not have access to all the data in the Multiple listing serive website. Do you think there will be a time when using realtors will be the exception to the rule (for the rich, for those who are time crunched, etc)?

[Anonymous]

You really think that the only value a realtor adds is giving information to a potential buyer/seller?

[Anonymous]

Mainly, yes.

[Anonymous]

No, I don't. Buying and selling a home is too big for most people to handle without a representative.

[Anonymous]

It really should and the role of realtors compared to the % they take is out of whack. I remember listening to a lecture in business school over a decade ago about this issue and how established systems can work to sabotage innovation. When on-line listing and real estate services first came on line which created a way for you to list your house without going through a realtor and for buyers to get access to house listings with a realtor there was belief that agents would go out of business. What happened was that the realtors and agents did everything that they could to avoid showing houses that were sold through traditional realtors. In a hybrid market, there were buyers who were not shown options or told that there may be issues with that property. The realtors didn't save their cut of the business by providing more value but by reducing the value of the competitors..interesting difference.

A much better business model for consumers (both sellers and buyers) would be a flat rate real estate attorney service that would provide contracts, negotiations and closing services. A separate service that would be far more valuable in getting your home sold than your traditional real estate agent would be a staging and pre-inspection service that would be flat rate or time and materials to help sellers present their homes in the best possible light, understand the comps in their area and what types of things make a different in their market. Every agent that we have ever worked with has not had any of the above skills even though they were well regarded and successful.

Agents want you believe its either use them at their terms or you do everything else. This is stupid as there other potential business models that would better serve the public.

[Anonymous]

It is a guild system and like all guilds they will fight tooth and nail to preserve their role. They may succeed by placing many legal and other obstacles in the way of people who want to do without them.

But yes, from an economic perspective they play no useful role, just increase frictions by placing massive costs on people who would like to buy or sell. Their value-added in the days of redfin etc. is close to zero.

[Anonymous]

Why do I think someone is talking to themselves here?

[Anonymous]

I certainly hope so.

If nothing else, they should charge flat fee and compete on price (via internet/tv ads/etc.).

If you can't comparison shop something (like medical service) it leads to inefficiency and waste.

I hope realtors who give poor service to cheap houses and more to expensive homes should be extinct in 10 yrs.

[Anonymous]

I've already posted, but the economy is full of things people could do themselves but pay others to do. We're a service economy.

You can change your oil put go to Jiffylube instead.
You can write your own will but hire a lawyer instead.
You can buy your own car but use a car buying service instead.
You can cut your grass but hire someone instead.

[Anonymous]

Anonymous wrote:I've already posted, but the economy is full of things people could do themselves but pay others to do. We're a service economy.

You can change your oil put go to Jiffylube instead.
You can write your own will but hire a lawyer instead.
You can buy your own car but use a car buying service instead.
You can cut your grass but hire someone instead.

The cost of these things is a lot more proportional to the service than realtor fees. If agents lowered their fees to be commensurate with the amount of work they do, your analogy would make more sense.

[Anonymous]

Anonymous wrote:I've already posted, but the economy is full of things people could do themselves but pay others to do. We're a service economy.

You can change your oil put go to Jiffylube instead.
You can write your own will but hire a lawyer instead.
You can buy your own car but use a car buying service instead.
You can cut your grass but hire someone instead.

And BTW, how many people use a "car buying service"? I've never even heard of that.

[Anonymous]

I sure hope they do- or at least change the commission structure. We've bought and sold three houses. Each time we bought, I found the house in the listings. When we sold, our agent spent no more than 6 hours on the listing, going over the contract, closing, etc. If you divide the amount of commission we paid by the number of hours the realtor worked, it would have been thousands an hour.

[Anonymous]

I think realtors are valuable but the %age system makes no sense, especially in this area where the average house price is very high and selling houses is reasonably easy. Obviously a little different in markets where houses are $100-150k and may sit on the market for a very long time.

[Anonymous]

They should. Most have the intellectual capacity of the DoDo.

[Anonymous]

I agree that the service some realtors provide is out of proportion to their value, but comparing them to other services that people can do for themselves leaves out an important detail. People who sell their houses may not be totally comfortable opening their properties to potential buyers who are unaccompanied in the house. Since many properties for sale are vacant, and the expectation is that buyers can tour the house while it is empty, there is an issue of ensuring safety and security of both people and property during viewing. In simple terms, without a realtor, who will let you in, and who will be responsible for the property's security while you're viewing it?