Over the last two decades we have watched companies and whole industries downsize or completely dissipate due to new technology. It is naive to think the same thing won’t happen to service industries like insurance, accounting, mortgage, and real estate in the near future. For many it’s already happening.
In 2017 over $5 billion was invested by venture capitalists into real estate technology. Experts predict 3 times that investment in 2019. Companies like Zillow and Redfin have led the way over the last decade with their strong online presence and user friendly websites that allow home buyers across the nation to see any home they want with the click of a mouse. Now even Amazon has thrown their hat in the arena. You will soon be able to purchase your home directly on Amazon without leaving the comforts of your laptop or cellphone. What does this all mean for buyers, sellers, and the Realtors who work in this industry?
For sellers and buyers it means a much easier streamlined process. We saw that with the invention of e-signatures. Clients and Realtors no longer had to deal with stacks of paperwork and most companies are close to 100% paperless now. Technology will also provide more information to the average consumer. More technology is nothing but a good thing for buyers and sellers.
My prediction for 90% of Realtors is that traditional real estate agents and brokers will all but disappear. As the owner of a real estate brokerage this isn’t easy to say out loud but I can’t stop it from happening. If I don’t acknowledge it and adjust I could eventually fall to technology myself. Our mothers have all told us that, “We can’t control what happens to us. We can only control how we respond to it.” This is the moment our mothers warned us about.
As technology becomes more prominent and the process become more streamlined in our industry the total commissions paid out will be smaller. There will be less commissions earned every year as technology improves. This either means we will have less Realtors, or that we actually have more Realtor replacements that earn far less per year/transaction doing very little but opening doors. It’s completely possible the real estate industry follows the taxi industry and that traditional realtors are replaced by an Uber-esque real estate agent.
There will still be a need for knowledgeable tech savvy real estate professionals to facilitate everything in the back end. There will also be agents who occasionally meet the clients face-to-face when necessary, and there should also be on-the-phone agents who can answer questions over the phone for clients. My advice is to learn as much as you can about real estate AND technology so that you are in a good position to land one of these positions as the industry adjusts and changes. These will most likely be salary positions and they will earn decent income.
My personal goal has always been to transition completely into real estate investing anyway (opportunistic flips, and vacation and long term rentals). I would guess that ten years from now I am still a real estate entrepreneur in some fashion, but that I am investing far more than I am transacting. My goal is to position myself to purchase when the market drops again. We may not have a crash or bubble pop, but prices will dip again in the next decade. You can count on that. The market is always correcting itself, but it always bounces back and property values always increase overtime. If you have enough patience you will always profit in real estate, but it happens much faster and on a larger scale if you time it right. The key is to be ready to pounce when it is the right time.
As long as the National Association of Realtors exist and lobbyists can pay to play, Realtors will still be protected in some ways. Politicians are heavily influenced by Realtor lobbyists and they will pass laws to prevent a complete industry takeover. But you can’t stop progress, and whether we like it as realtors or not it really doesn’t matter. Technology will make the process quicker, easier, and cheaper for our clients, and if we are good Realtors and agents that is what we want for them.
I am one of the most optimistic people on earth and I do not see this all as a negative. In ten years from now the real estate industry will look vastly different. You can pretend it won’t, live in denial, or adjust. I choose to adjust. I’m not scared, instead I am excited for change and challenge. Change and challenge is really just opportunity in disguise. Just make sure you are aware of what’s happening and prepare yourself.
Agree or disagree? Let me know about it: