Are real estate agents a thing of the past?
According to statistics from the National Association of Realtors, they might be. The number of real estate agents has dropped over 26% in less than 5 years.
And I’d trust those numbers. Over the last two decades, the NAR has spent over $90 million in political contributions. Let’s just say they’re certainly invested in their own industry.
It’s common sense that the number of agents would have dropped. After all, a lot of professions have cut jobs since the recession. But across all sectors, you’d have to dig pretty deep to find a loss of 26%. In fact, only construction workers-a notorious casualty of the housing bust-can keep real estate agents company in terms of percentage of jobs lost.
Still, if I had to choose between being a construction worker and a real estate agent right now, I might choose to get out my hard hat. Once the economy turns around, people will begin building and buying homes again, if on a more modest scale. The age of the easily mortgaged McMansion is over, but construction workers will certainly be needed again, and their industry will recover. It has to-we haven’t yet found a way to outsource home building or build supercomputers that can do it for us. And thank goodness for that.
Real estate agents, on the other hand, are facing an entirely different dilemma. The business model that has employed them for so long is expiring. Real estate agents used to give people access to listings that no one knew about. They provided a crucial link to the city or neighborhood or community where a family wanted to move. They could find you a home that met all your specifications. If you needed to sell a home, they could handle everything for you, and put it on the market in style.
But now that you can find dozens of websites with video tutorials on how to stage your home, and now that Trulia has become everyone’s favorite iPhone app, the real estate game has changed forever.
Everything that a real estate agent can do, the average consumer can now do from the cost-saving convenience of his or her own home. 90% of home buyers find their home on the Internet, and there’s no stopping the Internet when it comes to industry change. Middlemen have been disappearing all over the place. We use ATMs to make deposits, do our taxes with cheap software, rent videos from Netflix. And I can’t think of the last time I called a travel agent-can you?
There’s a quiet revolution going on in real estate. Buyers and sellers are seeing that they can deal directly with each other, and most importantly, save money. Who would you rather go to Hawaii when you sell your house-you or your agent? I don’t like to make assumptions, but I think I know the answer to that one.
The only surprise is that the real estate agent has lasted this long. At this point, the agent is the dinosaur in the deal. A few will survive, inevitably. But agents can expect that their industry will have to change or die within the next decade, because it’s only getting easier to buy and sell a home yourself and save the commission. And commissions mean thousands, if not tens of thousands of dollars of cash in your pocket.
Innovation doesn’t care about the real estate commission. Innovation has never cared about its own consequences. And we embrace innovation every day.
The American public is embracing this huge opportunity to save money and take the real estate transaction into their own hands.