(NEW YORK, NY) — The rise of technology in the real estate industry questions the importance of real estate agents.
Apps such as Zillow and Trulia give prospective homebuyers the ability to browse through listings at their own convenience without the help of an agent.
Not only can homebuyers search for homes on their own, but online mortgage lenders give them the option to get pre-qualified for a loan long before they’ve found the perfect place.
While homebuyers are doing most of the work themselves, agents are still called in to finalize the transaction and collect 3% commission. A call that is causing many first-time homebuyers to question the importance of including an agent at all.
The importance of an agent
Yes, technology has transformed the home search process. Homebuyers can search for new listings and property information all in the comfort of their own home, bed, car, etc.
But that’s just about all they can do. Once a buyer has found their perfect home, they need to call an agent to show them the place, negotiate with the seller, and submit an offer.
Evan Harney, president and CEO at PadXchange, refers to this as getting to the “one-yard line.”
The time that the agent is involved in the process is significantly shorter.
“With all of the information that’s out there, buyers can get the process pretty far down the field on their own,” Harney said. “Then they call in the agent to write up the offer, and the agent basically pushes them over the goal line and gets their commission.”
Harney decided to create a solution that allows homebuyers to finalize the process on their own.
Along with Navy veteran, Josh Hinkson, the two created PadXchange, a digital platform that lets buyers set up showings with available agents in the area. Not only that, but once buyers have found their perfect home, the platform gives them the tools to write an offer, submit it, and track their closing process. Once the transaction is over, they get a commission refund of around 1.25% of the sales price. A number that is significantly less than the traditional 2.5 to 3% commission rate.
However, according to some, agents are crucial to the home buying process now more than ever.
Nick Bailey, president and CEO of Century 21 Real Estate, believes that the initial search is only a small portion of the home buying process.
“Today, consumers need access to see properties and then help analyzing the data and negotiating through a process that is the most complex it’s ever been,” Bailey said.
While the internet has allowed homebuyers to become more knowledgeable of the market, a skilled and experienced agent is crucial when it comes to saving time, staying organized, and negotiating the best deals.
Hinkson believes that this real estate technology revolution does not take agents out of the equation, but instead allows agents to do their business better and more strategically.
The amount of technology at the doorstep of the real estate industry offers an endless amount of possibilities for agents.
Technology, if used to their advantage, can allow agents to be more effective. They can target prospective buyers in less time, provide more data to clients, and better understand specific markets.
And, while agents are having to do away with traditional real estate mechanisms, there are some things that will always be needed in the home buying process such as negotiating skills, experience, and the desire to find perfect homes at perfect prices.