Dear Monty: We recently closed on our new home. We were pre-approved, and we shopped online for many hours using real estate websites and other websites to learn more about neighborhoods around homes that interested us. We used municipal websites, crime maps, and Google Earth as examples of helpful resources. After two months of searching, we zeroed in on a home with an excellent video presentation and decided to look in person. We contacted the listing agent for an appointment. While we toured the house on our own, she met us and talked with the owner, a friend. The rest is history. It struck us that we did all the work, so this is a serious question. All she did was open the door, visit with her friend for 45 minutes, and went to her home office to complete the form. We signed online a short time later. Why did we need a real estate agent?
Monty’s Answer: First, background to put the conversation into perspective. Throughout history, humans have been innovating. Gutenberg invented the printing press in 1450, well over 500 years ago. The first known inventor was Thales of Miletus, who invented mathematics over 2000 years ago. No one knows who originated the wheel earlier in Mesopotamia. Innovation is the result of dissatisfaction. The more knowledge we gain over time, we notice new ways to improve.
Innovation has happened faster since Sir Timothy Berners-Lee brought the World Wide Web to the public in 1991. They did this using knowledge gained from earlier inventions. This invention is the transmission of information very quickly over the public-facing internet. It ushered in the iPhone and many applications to improve and inform the world.
Your question answered
We do not need real estate agents. According to the National Association of Realtors (NAR), in 2022, ten percent of all home sales were sold by the owner without an agent. Those ten percents know that an agent is not necessary. You realized this through your experience. You used technology tools to gain the same information as the agents. That diminishes their value. The other ninety percent do not realize this, or they know it but have not acted on their knowledge. When Apple introduced the iPhone, not everyone bought one. There are still people that do not have one. This observation suggests that agents will be with us until people realize what’s happened.
In fairness, she also had to place the owner’s home in the multiple listing service (MLS). The MLS is another service that has lost value with the advance of technology. Technology has allowed observant home sellers to find the information they need to price their homes without the MLS.
The industry can still save itself
The real estate industry is one of many industries that has fallen behind. There are others currently facing extinction. Ironically, the real estate industry itself has made the transaction complicated. You, and many others, have proven the obsolescence using the methods you used to buy your home. The fact is that buying or selling a home today is easy.
NAR must find new and better ways to add value. They could start by making the MLS efficient and public-facing. They could police their members and purge the agents revealed in this special NAR report. These agents prey on uninformed consumers. In the process, they could stop trying to protect commissions everyone knows are not worth the cost of the service. Finally, they must recognize that houses positioned correctly in a new tech world sell themselves.