Why Real Estate Agents Have Good Reason To Fear The Web

from the marginally-useful dept

There have been a number of stories lately about real estate professionals lashing out against online real estate services like Zillow and RedFin, which are seen as threats to their traditional business. A new study done by two economics professors sheds some light on why they might be feeling embattled. In an examination of the housing market in Madison, Wisc., the pair found that homes sold using brokers did not fetch sellers any additional profits after commissions were taken out. What makes Madison interesting is that it has a thriving website of for-sale-by-owner homes, so sellers there don't have to do much legwork if they want to sell on their own. This means that real estate agents may still add value in communities where such services aren't popular, but it's value that could disappear as services like RedFin startt to take hold. Thus the agents' fear seems to have a legitimate basis, and their behavior conforms nicely to the rent-seeking tactics exemplified by similarly organized professional groups.

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  1. identicon
    Eliot, 8 Jun 2007 @ 3:12pm

    Re: Re: Real Estate and the web!

    Where there are some aspects of real estate that seem simple, do you remember when you signed your docs to buy your property?

    Do you remember that part about the loan, or asking for credits, or the large section describing the law.

    The Realtor is your local real estate expert. They'll be your tour guide to a new neighborhood, and an expert on the homes in the area. They should be aware of local trends, and they need to know the contract, backwards and forwards. This is one of the reasons houses sold by owner sell for less than listed by a realtor.

    Also don't forget, if you are in a FSBO deal, you are legally obligated to disclose anything and everything. If you forget that one year you put a bucket in the attic to stop a leak (actually happened to a client of mine), you are now financially liable for repairs and loss of value. Where I have an Error's and Omissions policy that protects everyones liability up to $1million.

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