Dear Monty: You describe your writing as advocacy for industry reform. You also stated that technology would replace real estate agents in the future. Others have similar thoughts, but I have yet to see any of them make a dent in the industry.
I am a full-time real estate agent, and I am curious to know if you will share a more detailed explanation of how you think this will happen.
Monty: Technology races and predicting the future have always produced winners and losers. Innovation is born out of dissatisfaction.
I have said in the past that technology would replace real estate agents. I believe technology will reshape and drastically improve information delivery to real estate consumers. I believe that the technology that will affect that change already exists.
Still, both the industry and real estate consumers do not yet recognize it. For real estate agents to remain part of the real estate transaction, they must reinvent themselves.
A recent example of reinventing is the assembly line and production workers. They put down their welding torches and learned to program the machines that do the assembly and welding. Some workers were able to adapt, while many others moved on.
Real estate workers will have to accept that they are no longer the center of the transaction but can be part of it — or move on.
Changes Will Come Quickly
Over many decades, the real estate industry slowly made an easy transaction difficult with myriad rules and regulations that tipped the real estate transaction heavily in favor of the agent. The future real estate transaction is a simple online advertisement with new engagement rules that clearly benefit the consumer in various ways.
Here’s How It Will Happen
Standardization: This advancement will eliminate the current highly fragmented brokerage practice.
Negotiate online: This saves an incredible amount of time efficiently and lowers cost.
Pre-home inspection: More efficient and logical timing eliminates the dreaded second negotiation.
Simple forms: Easy to read, consumer friendly. Customers will be able to understand them and avoid surprises.
Range pricing brings more potential customers to a home.
Instant options: Vital information informs decisions with pro and con options rather than differing opinions.
All information in writing: Transparency reduces oral misunderstandings.
Transparency builds trust between parties and encourages good-faith negotiations.
Critical tools: Easy-to-understand essential data to inform consumers before contracts are signed.
No MLS: Removes the 100-year-old conflict of interest with search engine optimization (SEO).
Self-service: Customers participate in the work effort to learn more, creating even more efficiencies.
New rules: Fair, straightforward and easily understandable.
Agents will take on a customer-service role: The current real estate agency model is unworkable and removing asymmetry results in fewer misunderstandings.
Peer-to-peer transactions let parties save time and share effort, while direct communication builds trust.
Real-time education saves time, is helpful and provides instant knowledge when needed.
Small service fees will replace low-value commissions.
When Will This Happen?
Most new ideas take time to gain trust and acceptance. Amazon began selling books in 1994 and introduced refrigerator sales in 2017, 23 years later. In 1994, who would have thought anyone would buy a refrigerator online?
Consumers today have seen the selection, convenience and savings technology delivers. Amazon paved the trail for a much quicker consumer transition in residential real estate.
— Richard Montgomery is the author of House Money: An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home. He advocates industry reform and offers readers unbiased real estate advice. Click here to ask him a question at DearMonty.com, or follow him on Twitter at @dearmonty. Click here for previous columns. The opinions expressed are his own.