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
    Chris, 15 Jun 2007 @ 1:26am

    Real Estate Agents are there for a reason. Sure FSBO.com could show your listing to tons of people. That's simply a listing. But houses aren't used cars. They're the biggest investment most people make in their lifetime. Sure, put your ad on craigslist. See what happens. You'll get calls from 150 different people trying to low ball you. Agents have been around the block. They know exactly what the houses in the area could fetch, they know if your bank is screwing you on your interest rate, and they know who is ready to make a serious offer and who is simply doing it for personal entertainment.

    A website just shows off the house. I think yea, realtors will definetely lose the monopoly on listing information. But you don't buy a house from the picture in the paper or online. You need to visit open houses, etc. If anything, I would think realtors would take over the different websites rather than be afraid of them.

    They have their own place in the service industry. If websites did all this, then yea I'd be worried if I was an agent. But they don't.

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