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
    S. Taylor, 19 Jul 2007 @ 11:23am

    Re: Real Estate Agents

    Old Guy, you hit on something here. Undoubtedly there are alot of folks out there who just don't have the time to show thier house and do all the extra detail work that an agent can do. Since there are so many houses on the market now for buyers to choose from, does a FBSO honestly think that a buyer will view the house based on the sellers convenience. I'm very sorry, but as a Realtor for 16 years, I know most buyers don't have any patience, most won't come back on the following weekend when it's convenient for the FSBO seller to show. Most ( and this is very true) will have already bought a house by the next weekend! Some people will surely have an easy time of selling or buying FSBO's, but you may want to do a bunch of research before you go it alone. In 2004 there were over 40% of FSBO transactions that wound up with an after sale dispute or court case. Do you think that maybe this figure might be so high because a private seller couldn't possibly have the time to study all the laws, disclosure issues, etc.. like the brokers do? Yeah. So the point is, go it alone if you want to, no one could blame you. But If you're in a time crunch and you don't sit at home all day waiting to show your home, you may want a Realtor. Stat's show 20-27% higher sales price with Realtor listed property. (National Association of Realtors)

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