About 4 years ago, one of my clients asked my opinion about a technology that would allow someone to buy a home online without using an agent. I told him “Buying a house is not like buying a car or booking a trip. I think people will use agents to buy homes.”
I still believe this. A house is not a commodity.
If I fly to Las Vegas on Delta or Southwest, I am basing my decision on price. The flight is a commodity to me. Now, my husband, who is a loyal Delta customer, would book on Delta regardless of the price. For Delta frequent flyers, travel is not a commodity. Free upgrades to First Class and a special lounge create value. When we traveled to Europe, we used a travel agent. She provided value in helping us book tours, hotels, and even restaurants. Her expertise was of value to us.
To stay relevant as a real estate agent, I must provide value to my clients. I need to have an understanding of the inventory, historical insight on each neighborhood, knowledge of market forces, and local connections with stagers, handymen, insurance agents, and the right lender for the particular property. This is especially important for my clients who do not live in Park City full time.
The Use of Technology in Real Estate
Brad Inman predicts the following uses of technology in real estate (in bold, followed by my opinion):
- The sale of seller leads to agents. You may not know that Zillow and other real estate websites make their money by charging agents a fee for buyer leads. That means that the agent you click on could know nothing about that particular listing and may not even have an expertise in the area where the home is located. In the near future, people who want to list their homes for sale will be able to stumble upon listing agents the same way.
- Computer-generated comparative market analyses. While this may provide a broad brush stroke, it can’t replace local knowledge of inventory. This would include specific location (corner, views), nearby planned developments, home condition, and floor plan.
- iBuyers and Instant Offers. I recently sold a $95,000 condo in Park City to a lovely physician from Salt Lake City. He did not buy this condo sight unseen, but he did write a check to pay for it at closing. I have found that buyers like to see what they are buying even if it means flying out to look at the property after the offer has been written.
To answer my own question, I believe that real estate agents who provide value will not go the way of the travel agent. On the other hand, agents who deliver “commodity” type services should be nervous. They can easily be replaced by technology.
When Agents are Replaceable by Tech
- Agents working in markets they do not know. I have had Salt Lake City agents call to show my listings. They are not members of the Park City Multiple Listing Service and do not have access to our e-keys. What value are they providing their clients?
- Agents who buy online leads. To me, this really cheapens to role of the real estate agent. I recently had a clientcontact me directly to view one of my listings. An hour later, an agent contacted me and told me he was representing the client because he paid for the lead through Zillow. I said, “Well then you should be present at the showing.” Long story short, the buyer had no interest in working with this Zillow agent, did not want him at the showing, and didn’t care that the agent had “paid” for the introduction.
- Agents who don’t provide value to their clients. I am amazed at the iPhone photos, non-existent property descriptions, and unresponsive agents who are impossible to contact to schedule showings.
Providing Real Value in Real Estate
Below are a few examples from the last 2 months where I provided value to my clients:
- I helped a buyer get two professional opinions from foundation specialists to ensure the home he is purchasing is not sliding.
- A seller needed to replace a broken sliding glass door that was no longer made. I helped him find a latch that we special ordered from the east coast so we could repair the door without replacing it.
- I helped clients navigate flood insurance for a condo they are purchasing.
- I helped a client who is purchasing vacant land secure an architect and builder.
These examples are in addition to market preparation and advertising listings, helping buyers select properties to purchase, writing and negotiating offers, etc.
What services do you think agents should provide to increase their value to clients?