agents are not going anywhere
Issue 102 - September 23rd, 2022
Real estate is always a hot button topic since it is such a personal part of our daily lives, but the topic of “real estate agents” can be an even more heated topic of discussion.
It seems like the world has a love/hate relationship with real estate agents:
“They are going extinct”
“They make too much money for just opening the door”
“I can do this myself and save money”
And the list of things goes on and on…
BUT the reality is the AGENT is becoming more important, and there has been a steady trend of agents being involved in MORE transactions since 2001 even with the innovation in the industry and models like iBuyers becoming more and more mainstream.
According to National Association of REALTOR data:
87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69% in 2001.
90% of sellers were assisted by a real estate agent when selling their home.
iBuyers like Opendoor and others account for less than 2% of total market share in the entire industry
I have been involved in the residential real estate industry for about 15 years, and I have constantly challenged myself to think about the future of our industry at all times. Since my beginning days, the main difference I have seen in top producing agents is that they understand their ROLE is changing. The role is no longer “property finder” as much as it is “home search/sale consultant”. Consumers have just as much data about homes as agents do in today’s world.
The differentiating factor in good agents is people who keep up with industry trends, neighborhood happenings, serving as on-going resources for their clients pre and post home sale, and always keeping their clients informed of market dynamics on macro and micro levels.
The agents earn their keep, in my opinion, when advising sellers about staging, photography, or improvements needed to the home before listing. OR, when representing buyers in an evolving market like today….buyer’s agents advise on great mortgage partners, best ways to structure a contract to win, and help their clients navigate a transaction end to end.
Sure, tools are popping up to help the DIY sellers and buyers, and this has honestly always been a part of the market, but this will never become a meaningful percentage of home sale transactions at least in my lifetime.
Agents continue to serve as a resource to their clients outside of the transaction piece as they continue to share home-affiliated vendors with clients, trends in pricing in their neighborhood, and other services and data surrounding their clients’ homes that could be useful. Relationships with previous clients are the best place for referrals, and the best agents realize their work continues well after a successful home purchase or sale transaction.
We will not go from agents being involved in roughly 90% of home transactions to ZERO as some people like to predict, but I do think we have to understand that their roles are changing. Agents are some of the most hard-working entrepreneurs in our country, and I know they will always find ways to evolve and stay relevant as the world changes around them.
Improving the tools and brokerage platforms for agents to run their business is the biggest opportunity in the entire industry to improve the transaction process for everyone involved. If the agent’s workflow improves then consumers benefit as a result. Win/Win!
Newsworthy Links To Share
“Even tech billionaire and Republican mega donor Peter Thiel thinks housing prices and rent are too damn high in Florida. Thiel, a Miami Beach transplant from Silicon Valley, warned conservatives that soaring real estate prices in Florida make the Sunshine State more like California than they would like to admit. Speaking at the National Conservatism conference held at Jeffrey Soffer’s JW Marriott Miami Turnberry Resort & Spa in Aventura on Sept. 11 and 12, Thiel said that if conservatives are going to have a ‘high-growth alternative’ to states like California, the real test will be if real estate prices come down.” The Real Deal
'Inherently Suspect’: Why Is Dual Agency Everywhere In U.S. CRE When It's Banned In The UK? (Bisnow)
Starbucks To Open 2,000 Stores In 3 Years, Spend $450M To Upgrade Others (Bisnow)
Extra Space Storage Inc. (EXR) acquired Storage Express and its 107 remote-managed properties, further expanding the company’s reach throughout the Midwest.
For First Time, Opendoor Selling Homes for a Loss (Mike DelPrete)
Unsurprisingly, Dwell Magazine is Now Selling Its Own Prefab ADUs
Compass cut more jobs, part of cost-reduction moves by the real estate brokerage as it aims to turn a profit even in a weakening US housing market. (Bloomberg)
Look inside a NYC woman’s 80-square-foot, $650-per-month apartment: “Today we tour the SMALLEST apartment in New York City at 80 square ft, which is the size of a parking spot,” reads the caption on YouTuber Caleb Simpson’s video tour of Alaina Randazzo’s Midtown home. Since posting on September 13, the roughly 6-minute clip has racked up more than 1.5 million views. (NY Post)
Mortgage demand rises for the first time in six weeks, despite sharply higher interest rates- Mortgage applications to purchase a home increased 1% for the week, but were 30% lower than the same week one year ago. (CNBC)
Real estate tech company DeedPath announced the launch of its save-to-own option program, providing small investors a new way to choose and buy a future rental property.The company says customers can choose a property, and DeedPath will inspect, evaluate and buy the property for them. Customers will contribute 5% of the purchase price and make monthly payments to build “equity credit,” which will be used to later purchase the home.
Real Estate 3.0 – The Ownership Revolution (NFX)