If a buyer can find a home without a Realtor and a seller can find a buyer without a Realtor, why aren’t all Realtors obsolete?
This question is based on the perception that the reason to hire a Realtor is to locate the “other half” of the transaction. Let me explain.
A Realtor’s Roll
There was a time when a large part of the Realtor’s role was to escort buyers in the Realtor’s car on Saturday and Sunday afternoons to available homes. The Realtor would show those homes that the Realtor believed to be the best match for the buyer. In today’s real estate market, it is very common for the buyer to call the Realtor and tell them which house they would like to view. What changed?
The old service model became obsolete with the Internet. No longer is the Realtor the exclusive holder of information when it comes to homes for sale. Like so many other industries and professions, real estate changed once consumers could directly collect their own data. The onset of disruptive innovation in the residential real estate industry was facilitated by data providers such as Zillow and Trulia.
This disruption has been good for consumers as well as for business. Consumers come into the real estate market more prepared and well educated about the inventory and opportunities available. Realtors use the Internet as an efficient and worldwide marketing tool with which they can expedite and maximize the sale of homes to the benefit of their sellers.
The Benefit of Having a Broker
The experienced, skilled Realtor is more critical than ever to the success of the sale. In the National Association of Realtors 2016 survey of buyers around the country, 61 percent of buyers stated that the most significant benefit in working with a Realtor is their knowledge of the buying process. The second most significant benefit was the Realtor pointing out unnoticed features and faults with the property; and the third is the negotiation of better sale contract terms, including price. For-sale-by-owner homes sell for a median sales price of $185,000 and the median sales price in a Realtor-participative transaction is $210,000.
Just as financial advisors, accountants and attorneys have not become obsolete despite the establishment of E*Trade, Turbo Tax and Legal Zoom, the most knowledgeable Realtors will remain significant as counselors and negotiators in a residential real estate transaction. However, these developments have held each industry and professional accountable to bring more value.
If a Realtor provides no more service or opportunity than the real estate websites, that Realtor does not add value and becomes dispensable. Consumers will be drawn to the Realtor who can offer: an analysis of the data available, strategy to navigate real estate sales and purchases in a tight market, help in maximizing their return and opportunity. Advocacy and negotiating skills of a Realtor are a significant benefit to the current consumer. Today’s successful Realtor constantly monitors and minimizes their client’s risks and liabilities.