The internet has changed everything. Including the real estate world. This isn’t exactly headline news as the likes of online services such as Zillow and Trulia have been around for some time. But, it is news when buyers or sellers can work strictly with an online-only agent as opposed to the traditional agent/seller or agent/buyer relationships that have traditionally been the backbone of the market.
Some foreign markets are beginning to see a new era that relates to online-only agents. As an example, the U.K. online market has really taken off and is projected to grow to 50 percent of the total market. Another report from the U.K. showed that online agencies are growing 3.75 times faster than that of traditional agents. There has been some talk of U.K. online firms looking into launching in the relatively untouched United States market within the next few years. Each online-only model varies in the services they offer and prices charged. For example, the online agent may charge extra to show your home or they may charge more if they have to take photos of your home.
How the Internet has Changed Real Estate
Real estate continues to evolve as the internet offers more and more possibilities. For not only home buyers and sellers, but also agents as well. One huge advantage that the internet offers is exposure for a property.
A ‘traditional’ agent has many advantages over the online agent platform. To begin with, you are dealing directly with a real person that can help you navigate the local real estate waters. Additionally, as a local agent, we know the area as opposed to an online service that may be unfamiliar with the neighborhoods, schools and area amenities. Online real estate also takes the personal touch out of a transaction. A local agent offers the convenience of meeting face-to-face and being there for a buyer or seller every step of the way.
One of the biggest hurdles that we see for an online firm is to accurately price a property. If they are unfamiliar with the local market, it can be extremely difficult to provide an accurate price for a listing or determine a fair purchase price for the buyer. An additional hurdle is handling other parts of a transaction such as the home inspection and closing. The traditional real estate ecosystem is continually evolving as online real estate services offer the ability for buyers to access the MLS online and connect with an agent.
While real estate sees some unconventional things such as a house being sold without ever going on the MLS, it may not be 100 percent ready for a completely online agency. While many potential homebuyers turn to the internet to begin their home search, eventually the search is taken to a live person to help in sourcing the perfect property and to handle the real estate transaction. According to the National Association of Realtors (NAR) 2015 Profile of Home Buyers and Sellers, 9 out of 10 buyers relied on the assistance of a professional agent. For now, the National Association of Realtors (NAR) will continue to be strong voices against the idea of online agents taking off in the United States.
A variety of other types of businesses have been affected by the growing use of online services. However, the real estate industry in the United States hasn’t yet fully embraced the idea of buying or selling a house online 100 percent. As Americans, we buy many other things online, but dealing completely with an online transaction may have its challenges.
The online real estate market may appeal more to younger generations such as Millennials as they are used to doing (and finding) everything online. There are some existing sites like ForSaleByOwner.com that offer online real estate services, but it’s not associated directly with an online agent.
Let’s face it. Each local market is unique and each buyer and seller are also unique. Real estate agents can serve as a compass to aid clients through each challenging step of a transaction. Real estate is usually the biggest financial decisions that anyone can make within their lifetime. While cutting costs can be a motivating factor for utilizing an online service, in the end it may not be worth the savings for the additional issues that may come along with it.