Technology is everywhere and its reach continues to extend further into almost every industry. The real estate industry is no exception.
As technology grows it is making the home buying and selling process more efficient and faster. Today, home searches begin on the internet, home showings can happen virtually, and signing paperwork can be done with e-signatures.
Buyers and sellers can take more control of their real estate journey than ever before. But can technology eliminate the need for a real estate agent?
What Technology is Available to Buyers and Sellers
The internet is a wonderful tool to find information about virtually anything. Real estate listings are no exception. Websites such as Realtor, Zillow, and Trulia allow you to search for homes for sale in any area of the world, at any price point, and with any range of specifications you desire.
These websites also allow you to calculate your monthly mortgage payment and get pre-approved for a mortgage. Most of these websites also have apps available so that it is even easier to find a home by setting notifications for when a home that meets your specifications is listed.
But are these websites enough to help buyers actually purchase their home? And are they enough to help sellers effectively sell their home in a time efficient manner? Maybe and maybe not. It is one thing to search through hundreds of homes for sale. It is quite another thing to negotiate price, request repairs, and close on a home on your own.
What if you choose to go the For Sale By Owner route? Choosing to sell your own home may seem like a good idea because you will remove that pesky real estate agent commission fee, which averages at 5.8% of a home’s sale price.
However, when you list your home as FSBO you are also setting yourself up to pay for and handle details such as marketing your home, hiring inspectors, appraisers, attorneys, scheduling showings, negotiating, staging, photographing, completing paperwork, ensuring proof of funds or pre-approval financing, and communicating with interested buyers.
In the end, the average FSBO home sells for $58,000 less than homes listed with real estate agents.
If you have real estate experience then selling your home on your own may be appropriate. Websites like Zillow allow you to list your home for free while other websites require a fee. However, for the average homeowner with little extra time and not much real estate know-how it may be too much to handle.
What does a Real Estate Agent do for Home Buyers?
As the world of real estate changes in response to new technology so do some of the aspects of a real estate agent’s job. Now that homebuyers can find listings online, they are more prepared but also more overwhelmed than ever before.
A real estate agent’s job is to help buyers search through the tons of information they have access to. This includes answering questions, helping to ensure all legal documents are in order, and navigating unexpected road bumps. In addition, real estate agents act as a liaison between buyers and sellers.
They handle complex offers, counter offers, and negotiations. Real estate agents know and understand how to use pricing strategies and draw on the latest real estate trends to assist their clients.
Finally, real estate agents investigate financial offers to ward off any unforeseen purchasing issues. All of these aspects of a real estate agent’s job cannot be done by an app or other form of technology, which is why 87% of buyers purchase their home by working with a real estate agent or broker. .
What does a Real Estate Agent do for Home Sellers?
Selling a home can be a long drawn out stressful process that most homeowners do not want to navigate along. According to the National Association of Realtors, 90% of home sellers partner with a real estate agent when selling their home.
Not only do real estate agents bring comfort to a stressful home selling process, they also assist sellers in staging their homes for showings and marketing the home using their network of local experts.
Real estate agents list homes on the multiple listing service, guide homeowners through the selling process, coordinate inspections and appraisal services, navigate complexities in the closing process, and work to get their clients the best offer for their home.
What about an iBuyer?
iBuyers or instant buyers, are tech-enable companies that purchase properties online and generally sight-unseen. iBuyers are a good fit for any homeowner who is in a rush to sell their home or just wants to avoid the hassle of traditional home marketing.
An iBuyer provides an almost instant sale and is easy to use. iBuyers also guarantee a sale and do not require any home preparation or repairs. In addition, using an iBuyer allows sellers to choose the best closing date.
Keep in mind that an iBuyer does have its downsides. There is always the possibility of deduction if an inspection finds big necessary repairs. There is no negotiating and the seller makes less of a profit. iBuyers are not available in all areas and some have high service fees.
Can Technology Replace Real Estate Agents?
It may be easier than ever for homebuyers to search for their next home, but technology does not fill in enough gaps to make the role of real estate agents obsolete. Real estate agents won’t be replaced by technology anytime soon. Buying or selling a home is a person to person business.
Real estate agents are known for their personable attitudes, the attention to detail, and their power of persuasion. They guide, inform, and assist people in selling or purchasing a home all while working behind the scenes to list, market, and show homes in their area. Real estate agents are present for one of the biggest moments in buyers and sellers lives.
In addition real estate agents can work hand in hand with other agents during a home sale to get their client the best possible deal. These are interactions that cannot be replaced by an app or selling tool. In addition to using personal relationships to buy and sell homes, real estate agents take the difficult work out of the real estate process.
Financing, paperwork, inspections, contracts, showing, and marketing are all taken care of by real estate agents. Essentially the agent is the buffer between home buyers or sellers and the complex parts of the real estate process.
Real estate agents won’t be going anywhere anytime soon. According to the U.S. Bureau of Labor Statistics, real estate brokers’ and sales agents’ employment will grow by 4% from 2020 to 2030.
While some may try to sell their home on their own and a small percentage of individuals will opt for an iBuyer, the traditional home selling process will remain the dominant approach to home buying and selling.
Real estate agents provide much more than what technology can offer simply because they bring a level of security, trust, and knowledge to the real estate process that cannot be matched by technology.
Additional Issues That Only a In-person Real Estate Agent Can Handle
While advancements in technology have made it possible to conduct many real estate transactions online or over the phone, there are still instances where a human real estate agent, with a published guide, working face-to-face is invaluable. The need for personal contact becomes particularly essential in the following scenarios:
Complex Negotiations: Some real estate transactions involve intricate negotiations, especially when dealing with multiple parties, contingencies, or unique circumstances.
Emotional Support: Buying or selling a property can be an emotional process, especially for first-time homebuyers or sellers. Human real estate agents can provide empathy, reassurance, and guidance throughout the transaction.
Home Showings and Open Houses: When selling a property, having a real estate agent conduct in-person home showings and open houses can be highly beneficial.
Local Market Knowledge: Real estate agents with in-depth knowledge of the local market can provide valuable insights and advice during face-to-face meetings.
Personalized Recommendations: Meeting face-to-face allows real estate agents to understand their clients’ preferences, lifestyle, and unique needs better.
Property Inspections: When representing a buyer, real estate agents may need to attend property inspections to identify potential issues and assess the property’s condition.
Building Trust and Rapport: Face-to-face interactions help build trust and rapport between real estate agents and their clients.
Legal and Contractual Matters: During the closing process, real estate agents often assist their clients with various legal and contractual matters.