On Line Brokerages
From Global Startups to Trump’s newly issued pay freeze for Federal Workers, things look like they’ll be getting tougher for many people in the workforce. Then there are the predictions of the ‘death of the real estate agent’ where researchers at Oxford University, estimated the potential for artificial intelligence computer algorithms to replace agents is estimated at between 97 and 99%. It’s no wonder customers and agents alike are unsure what lies ahead.
In a time where scalability earns angel investment into online startups, it’s no surprise that many speculators are trying to get into the game as an Internet middleman. Redfin, Rex, OpenListings and PurpleBricks are each making a play at their cut of billions of dollars of real estate transactions. While each offers slightly different rates to consumers and compensation plans to agents, what they have in common is this: Get the local agent to do the job for less and promise the kickback to the customer.
Sold For Less
Without a doubt there are circumstances where having your home sold for less is, well better. There are others, when having an opaque insight into the plan to sell your home, an agent with little knowledge and limited professionalism is -just less. For consumers trying to navigate this new market, it’s tough to know where to turn. Interview both traditional and online Brokerages and agents. But is that enough to make savvy decisions about how to sell your home? The new options have just increased the bar of what a home seller or buyer needs to research and know to be an informed client. Not to worry; let me see if I can help.
You have probably heard of some of the new online only brokerages aiming for a cut of the business. Technology start ups are spending millions trying to understand the new demographics for determining real estate success. As consumers use the world wide web, Google and others are measuring psychographics, the art of how real estate demand is a factor of personality, values, opinions, attitudes, interests, and lifestyles. So where’s the hurdle?
Location, location, location
This phrase is likely to remain a truism, and agents have long chosen their geographical area and learned it in detail, street by street, neighbor by neighbor. While an agent can recall that 211 Jones street was more valuable because of the kitchen remodel and high end touches, that level of expertise isn’t easily typically flexible in computer models, until artificial intelligence. But even with sophisticated algorithms, are you comfortable with a brokerage in New York telling you the value of your home in Carpinteria and paying an agent $800 to sell your house online? With no incentive, will these agents have reason to study a nuanced market and serve you as a professional agent?
There is no doubt that the increasing interconnectivity online, mobility and work flexibility will have an impact on the Real Estate industry. It will shift the way we sell homes in the way that Expedia changed making travel plans. I the end the consumer will need to do more herself, and get less service to save a few bucks. Professional Real Estate Brokers like myself will find niche ways to serve the population that needs help and guidance through the very decision process of how to interview and agent and choose a Brokerage. Others will move into other new business ventures and the unlucky few will get caught up in becoming low paid contract workers for huge faceless corporations whose main clientele in their stockholders, not the homeowner.
Can’t We Get Along?
According to an article co-authored by 8VC most Brokerage owners “believe that successful real estate platforms will augment agents with data and tools to accelerate their business and serve their clients better.” With AI doing everything from writing articles for the NY Times to diagnosing rare diseases, it’s tempting to think anything we can do a machine can do better. But as Joe and Drew put it, automation can only take you so far, “Certain tasks should and will be automated, such as scheduling and paperwork. But coordinating with other agents, staying up to date on local politics, gauging sentiment, and persuading clients requires a human touch.”
If your considering buying or selling your house anywhere, I can help. Engel & Völkers has offices worldwide.