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Are real estate agents becoming obsolete?

Consumers’ increasing use of the internet to assist them in buying and/or selling a home has facilitated the growth of several non-traditional models (fee-for-service brokers, discount brokers, FSBO, broker referral networks, etc.). UpNest (I work here) is one of many new services dedicated to better serving the interests of home buyers and sellers by challenging the traditional way of doing things. However, we rely on top-notch partner agents to deliver value to our customers and are absolutely convinced they do. Agents are increasingly finding that they have to COMPETE  (not merely on commissions but on services, marketing skills, tech chops, communication skills, etc.) and prove their value to prospective clients. That’s exactly what they do on our platform.

Efficient markets are at the mercy of Darwinism (it’s survival of the fittest) and there’s no reason the real estate industry will be spared. Experienced, top agents who are committed to the profession F/T and offer value to their clients will remain and the rest will not – hence, I trust that natural selection will come to pass. Zillow’s recent launch of Agent Finder will put even greater pressure on agents to differentiate themselves through superior service.

According to the Association of Real Estate License Law Officials (ARELLO) there are ~2M active real estate licensees in the U.S. Are they all going away? No. Even with alternative models vying for their attention and all the technology and information at their fingertips, 91% of sellers use a real estate agent and 98% of buyers who used an agent said they were a useful information source. [Highlights From the 2014 Profile of Home Buyers and Sellers]

Other posts in this thread have already covered the value good agents bring. A good way to assess whether agents offer enough value to ensure they don’t become extinct, is to see what happens when you take them out of the equation [source:]:

  • FSBOs typically have a lower median selling price: $208,700 compared to $235,000 when using an agent
  • Over 80% of FSBOs fail and end up listing with a real estate agent

Such stats make a strong case for hiring an agent and signal that good, experienced agents who stay on top of trends and technology will be in demand for a long time to come.