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
    anymouse vs realator, 8 Jun 2007 @ 4:26pm



    Lot's of realtors posting on the board today, wonder if that's cause it's a common secondary profession for smart people who don't want to actually work....

    ok, ok, so there is 'some' work involved, but be realistic, did it require extensive training or just a little studying and passing a test? Were the courses similar to college level courses or more in line with trade school/online degree mills?

    If you interpret the results the other way, realtors provided NO ADDITIONAL benefit to sellers over listing the home themselves. So while the relator may have got a little higher sale price for the home, this 'benefit' was wiped out by their commission, resulting in no actual benefit (and if you look at taxes and all other value related fees, you've just ended up paying MORE in taxes/fees because the realtor sold the home for more than you would have...)

    Even if this all nets out and there is no difference to the seller between using a realtor and listing yourself, which would you rather do? Blood sucking leeches, I mean realtors, are no better than any other transactional 'middleman' who expect a cut of the transaction that could have taken place without them. They fit right in there with used car salesmen, credit card companies (biggest leeches besides politicians), and timeshare brokers...

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