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How Are Online Real Estate Sales Services Affecting Traditional Realtors?

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There was a time, not so long ago, where if you wanted to buy or sell a house, you had to find a realtor. Buying and selling real estate required specialized knowledge, both legal and financial, not to mention access to the listings, which only realtors enjoyed. And then the internet arrived, and realtors find their role is changing, and faster than anyone expected.

Caught In The Middle

The first problem is the simplest: If an owner wants to sell, they can do so directly, no brokerage fees required. While FSBO (for sale by owner) sales are still complicated, it's much easier to find buyers now than it was before the internet. In some cases, all a seller needs to do is fill out a form and a service will do the rest.

The second, however, is more complex. Much of what used to be industry trade knowledge is now freely available online. Anybody can get a sense of the overall sales trends in their neighborhoods, where prices are heading, how long a property has been on the market, and other useful decision-making tools. It goes beyond real estate as well; for example, if a buyer thinks a home's price is suspiciously low, a quick visit to public records sites can tell them if there's been a crime, if the place was foreclosed, and even if people think it's haunted.

This has benefits as well. Realtors now have a much more savvy shopping audience that comes in the door prepared, knowing what they want and what they can afford, saving everyone a lot of work. But it does raise the question of where realtors fit in a world where properties can be sold with a Facebook post.

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Adding Value

The question realtors need to ask themselves is where they add value in the process. For example, a lot of paperwork is still needed for any real estate sale, and offering to help with that thicket can justify a broker's fee. Similarly, realtors know where the legal pitfalls are and can steer buyers away from them.

Beyond that, realtors need to look at the specific demands of both buyers and sellers. While shopping online can be convenient, not every seller, or every buyer, is comfortable buying a house off the internet. Similarly, not every house has qualities that are easy to communicate online, making house staging a particularly valuable service.

And there are fundamental changes in the market that need to be considered. Increasing numbers of homes are being bought up by investors, not residents, and they have different needs from a typical buyer, ones that realtors are well-suited to. Millennials are skipping starter homes, meaning buyers and sellers are confronting new cultural aspects they may not be ready for. And increasingly a realtor may be necessary to help a grieving family dispose of real estate assets for a loved one who's recently passed away.

There will always be a need for realtors. Yet as the market changes, realtors will need to develop and emphasize new skillsets that their clients need, and anticipate challenges that may still be evolving. Not everything, after all, can or should be done with an app.