The internet was supposed to be the great leveler, disrupting businesses, overturning professions, and driving prices to zero. In the Internet era real estate brokers would go the way of dial telephones while self-sellers — owners of so-called “for-sale-by-owner” properties or FSBOs — were going to rule the market with all of information, forms, and advice which could be found online.
It didn’t happen.
While the Internet is bright, shiny, and alluring the reality is that it has not replaced real estate brokers despite all the electronic marvels it offers.
Real estate brokers quickly adopted to the new realities represented by the Web and combined online media with traditional forms of communication and marketing. The result, according to the National Association of Realtors, is that “in 1981, FSBO home sales accounted for 15 percent of all sales and agent-assisted sales accounted for 85 percent. FSBO sales have declined over time and in 2016, FSBOs accounted for eight percent of total home sales.”
Real Estate Brokers and Information
One reason for broker success is the generalization of information. For example, you might see a model sale agreement online. The form may be helpful in terms of better understanding how real estate contracts are put together, however it may not include the particular clauses and wording required in a specific community. If one local jurisdiction requires real estate contracts to show the location of all nearby heliports a transaction could be in trouble without the needed form language.
And if you do find the right forms then what? Sale agreements have gone from one or two pages when I bought my first home to dozens of pages filled with tiny type and all sorts of addenda. Without a law degree who knows how to fill out such paperwork?
Another reason concerns credibility. While newspapers and magazines have editors and fact checkers to examine content before publication, with a lot of online sites that’s plainly not the case. In too many instances the stuff posted online is fact-free, wildly out-of-date, or based on that new information concept, alternative facts.
No less important, at least in part, is that real estate is a localized commodity and therefore a lot of online information is simply generalized and thus irrelevant. It’s great to know that home prices are rising nationwide but more important to know about neighborhood values.
But I suspect the real reason for the success enjoyed by real estate brokers stems from the mortgage meltdown and the financial collapse. A lot of people got burned. There were more than seven million foreclosures. Home values sank.
One lesson — among many — is that despite the easy success stories too often featured on cable television real estate is tricky. If you can find someone with local expertise that’s re-assuring, something that lowers the odds of making a bad deal. Combine assurance with education and experience and real estate brokers suddenly become valuable in a marketplace that can be difficult to navigate.
As a homeowner you have the right to market your property in whatever manner best serves your interests. Toward that end you might want to see if the use of an experienced local broker is an appropriate option in your situation. For a growing number of owners in the Internet era the right answer has been to find the best local broker they can locate.
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Photo courtesy of Anthony Delanoix.