The long good-bye.
"Fifty percent of commissions when a house is sold go to the buy-side real estate agent. That worked great 15 years ago...[but] if you flash forward to today, (buyers) are doing the majority of the work themselves. So you have this disconnect."
Alex Zoghlin, CEO of VHT Inc., provider of "high quality professional Real Estate Photography", as quoted in the June 11, 2010 Chicago Tribune
"I never knew that all it took to move a buyer into a home was high quality professional Real Estate Photography. That must be some helacious fairy dust you guys sprinkle on your lenses."
Anonymous
If fifteen years ago I'd read this real estate industry vendor's admission that he was utterly clueless as to how people use his product to buy homes, I'd have been convinced that the days of the buyer's agent were numbered simply because some virtual tour provider added a few more bells and whistles to its Gold Package. But fifteen years ago I had good reason for swallowing the latest This changes everything! nonsense: fifteen years ago I'd never represented a buyer. Fifteen years ago the wondrous brand-new Internet was promising to purge the commercial bloodstream of every parasite who'd lived off the fat of the land and the sweat of the honest man's brow simply because said parasite knew something his clients or customers didn't. Now the playing field was level! Now no one had a monopoly on knowledge: everyone was an expert! Efficiencies would result! And they all lived happily ever after.
Not quite. Yes, the Internet does seem to have bounced back nicely from that nasty set-back in '01, but the 2000s were almost as much the Decade of the Agent as the Decade of the Internet. And I'll bet that technology replaces the Internet before it replaces the agent. Unless robotics comes a long long way.
Even thirteen years ago, when I first got into real estate sales, I could have read this or any prediction of the demise of the buyer's agent and been very afraid. I did, and I was. Now I just shake my head and wonder how anyone can lip-synch to this oldie and still get an audience. Especially when it's always someone like Alex Zoghlin, whose real estate cred comes from a year-and-a-half with a Chicago virtual tour provider and a stint as an "Orbitz executive". (I'm sure Alex is far sharper than the last virtual tour team I worked with, Larry, Curly and Moe.) But then, I forget that the Internet expanded the definition of "expert" to include anyone with a strong opinion on anything. I also forget that many consumers weren't around in the late '90s, at least not as consumers of big-ticket items like homes; to them, the clichés are still fresh. I also forget that many consumers grew up on the 'net and accept its awesomeness as an article of faith.
I also forget that for many the Internet is a Summer of Love that never ended. The 'net didn't die with a muffled gasp of gas lines, rampant inflation, "I am not a crook" and disco. The 'net never had its 1970s.
It would take more time than I have, and more servers than my Web hosting service could provide, to fully refute the idea that even the best virtual tour, SEO program or Web site has replaced the agent. Redfin seems to have a great site, but I know this not because I have Redfin's tire tracks across my back but because most of my clients send me listings from it. So many clients, in fact, that I quit paying good money for a listing alert. This changes everything! So instead, I'll pass on a few brief observations from my three latest transactions and let you judge whether the Internet has made home-buying a DIY week-end project.
First there's the young couple who, appropriately enough, started out using a Redfin agent. Who started out by dropping the ball on a house that would have been perfect. Which is why their friends referred them to me. Note that there's nothing high tech about this sequence of events: hype and illusory savings are just that, as they've always been. Our couple has great jobs in tech, and they're the epitome of the tech-savvy consumer. And, yes, they started out by filling my inbox with homes, but soon the tide turned and I was emailing them more homes than they were emailing me, because I was looking under every rock to find them a home, including homes they wouldn't find on the listing sites. And I think they'll agree that finding the right home (or something close to it) was light exercise compared to the full-contact work-out of beating off the competition to get in contract, get all the inspections and estimates done on time, then get the sellers to adjust the sales terms based on this boat-load of new information. All stuff I think they'll agree wouldn't have happened without me.
Then there's the slightly older couple, but still young and immersed in high tech, who wouldn't have found the right home, even though they hit Redfin daily, if I hadn't looked deep into the MLS, spotted a home just above their price range that had been on the market for months, drove out and looked at it and realized that it was overpriced but otherwise perfect and insisted they see it immediately, gotten it for them at a deep discount while staying on good terms with the seller, then saved the transaction by repudiating a bogus appraisal. All without changing into my superhero outfit.
And finally there's the single man, slightly older yet but still young, with a good job in the financial services industry, who has never, in over a year, emailed me a listing. Each house he's seen he's seen because I look at ten homes to find him one worth seeing. In neighborhoods he's never dreamed of looking in. And even if he had, he wouldn't know the pros and cons of those neighborhoods like I do.
All of which may suggest why, in the roughly fifteen years since the Internet first handed the real estate agent his hat and tried to kick him out the door, agents are still very much an essential ally of the home-buyer, even the home-buyer who's young enough and hip enough to know technology better than almost any agent. So is the Internet an empty promise? Of course not, although many empty promises have been, and always will be, made about the Internet, always to sell something. But it does mean that the Internet has, and always will have, limitations.
Both the promise and the illusion can be decoded from the headline to the Trib article I quoted at the beginning: "Tech-savvy buyers cracking real estate code". That's a little like promising that all you need to start your career as a dentist is computer smarts and a great search engine. It's a simplistic—but highly flattering and saleable—idea that the complexities of life can be reduced to a code, to be cracked by highly capable people like you and me. The problem is that, like dentistry or any other discipline, real estate doesn't have a "code", and anyone who says or implies it does is either dishonest or doesn't get real estate. Real estate has a body of knowledge that has to be learned like any other: slowly, painstakingly and sometimes painfully, by continual hands-on experience over years. Far more years than any home-buyer (or even the most obsessed blogger) has to spare or would care to invest.
And then there's the small matter of aptitude. But that's a subject for another day.