It may have taken longer than with other industries, but realtors are starting to see the impact of the Internet on their incomes. While the Internet has provided easy access to much more information for realtors to do their job better, it has also given the same information to homeowners looking for ways to save while looking for a new home.
Specifically, sites like HomeGain and Zillow are showing realtors that their industry will need to change or they will be reduced in numbers. Since these websites are giving away precious real estate information for free, commissions are dropping for realtors.
What is the main motivating factor to sign on with a realtor? In one word, information is the key reason why most homeowners will choose a realtor for their home buying and home selling needs. After all, realtors have access to information the average person cannot obtain. However, with the appearance of HomeGain and Zillow on the marketplace, access to the information has now become public knowledge.
In the past, you simply could not buy or sell a home without the use of a realtor. Their access to the National Association of Realtors’ multiple listing services was essential to buying or selling your home in an appropriate amount of time at a price that suited the homeowners. Only real estate agents knew what homes in the area were being sold for and they were only willing to share that information for a commission, the standard 6 percent.
Now, however, real estate information has become available online and become available for free. Any average homeowner can get a estimate on their homes value through RealEstateABC, Zillow and HomeGain. Or they can get an offer on their house from sites like ExpertHomeOffers. Should a homeowner want to put their home out there for public access, they can easily place their property information on ForSaleByOwner and other sites.
Accuracy, however, is the drawback for these websites and currently, the saving point for realtors who might worry about the future of their careers in the face of these daunting information sites. Currently, Zillow can be slightly off on homes in neighborhoods where fewer properties sell. These sites will be more accurate in neighborhoods who have had a number of sales recently to better gauge comparables in the area.
However, a realtor will have a similar problem in a neighborhood that rarely sells properties and websites like Zillow have an advantage they are not biased. Whereas an overzealous realtor might inflate home estimates to win over prospective clients, Zillow and other similar websites tell it exactly like it is, for better or worse.
Another down side of not using a real estate agent in a new home purchase or to sell a home is that a real estate agent can protect your best interests. Home owners rarely buy or sell real estate and most need help through the process. It can be complicated and if you make a mistake it can cost you thousands.
However, if you need to sell your house fast you would be much better off selling to a local home buyer in your area. They exist in every major city in the nation and they buy multiple homes each month. They mostly deal with people who are facing foreclosure, moving out of state or recently inherited a home, but their service is free.
The change in the real estate market mirrors what happened with traditional stock brokers whose monopoly on trading information was threatened with the advent of investing websites. Just as these stock brokers had to change their offerings and lower their fees, so too will realtors have to change in order to be a viable and important part of the real estate market. Rather than fight these informational websites, realtors will have to find ways to make their services invaluable for the homeowners who will need their marketing skills and experience in the real estate market.