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CNN
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Technology has revolutionized the way people book travel, buy groceries, and manage their day-to-day money. However, the home buying process has endured many similar changes.
Sites like Redfin and Zillow offer a way for buyers and agents to connect online, but real estate agents still have a role in closing the purchase.
A settlement reached between the National Association of Realtors and home sellers allows home buyers and sellers to pay commissions separately to their brokers, rather than having the seller split the commission between them. This situation could change as they face the prospect of having to pay. This opens the door for new technologies to reshape the role of agents, as people in other professions are already experiencing, from the world of finance to the world of travel.
Tomasz Pikorski, a real estate professor at Columbia Business School, said the settlement has the potential to simplify the work of buyer agents through technology available to consumers, as well as changes in money management. He said there is.
“We think so teeth “We’ve reached a point in the housing market where there’s a lot of innovation happening,” Pikorsky said. “The simple question is: Do homeowners really need a real estate agent?”
According to NAR’s 2023 report, nearly half of home buyers begin their home search online, and many are conducting home inspections themselves.
“Ultimately, I think people will understand what real estate agents actually do, especially on the buyer side,” Pikorsky said. “The whole business model that we actually operate right now is that these fees are not very transparent to the homebuyer.”
Daniel Hale, chief economist at Realtor.com, told CNN in an email that technology could make things easier for buyers in an industry that has often been opaque.
“Ultimately, if these changes lead to more transparency for consumers, that’s a good thing,” Hale told CNN.
But even though big changes may occur, one thing about real estate is almost certain to remain the same, Hale said. Agent. He said buyers “will be reluctant to make once-in-a-lifetime financial decisions without professional expertise and support.”
Finance, travel and other models
The NAR settlement essentially separates the buyer’s and seller’s agents.meanwhile Before Home sellers have been paying commissions that are split 50-50 between agents, typically 5% to 6%, but the settlement could mean homebuyers will be required to pay their agents upfront.
Experts told CNN it could affect how homebuyers think about working with agents.
Currently, the real estate framework focuses solely on buy-sell transactions, said John Bodrozic, co-founder of real estate tech company HomeZada. But as technology simplifies processes, agents need to promote their value as long-term consultants in niche industries.
Bodrožić said technology will make real estate more like personal finance in this sense.
“This is a bigger picture and an opportunity for the real estate industry to think about the customer as a forever customer, and I think we want to satisfy the customer and provide value throughout the customer journey,” he said. .
Bobby Juncosa, chief technology officer at real estate technology company Edgewise, says that from how travel agencies have changed as technology allows people to search, compare and buy their own flights. He said there are lessons to be learned.
“The buyer’s agent is going to be a little more controversial, but it’s going to be a little more like a travel agent and guide you in the right direction,” he said. “People say, “There’s a good school in this neighborhood.” It’s public information so you can look it up yourself, but you’re looking to local expertise. ”
Piskorsky said many real estate transactions could become digital, and the settlement could be a catalyst for that. He said advances in technology for organizing home inspections, arranging the hiring of lawyers, and performing other duties of a buyer’s agent “significantly reduce the costs associated with home transactions.” He said he was deaf.
Piskorski believes that even though technology is expanding further into the real estate industry, fully automated processes like Amazon’s home buying and selling marketplace are still a long way off. Told.
He said the real estate market is “too complex to be completely automated by a computer.”
Juncosa said that as the industry adapts to payment rules, agents will become more like consultants throughout the home-buying process, providing value-added insight. But the ultimate difference between a travel agent and a real estate agent is the value and risk involved in the purchase.
Buying a home is a big life decision, and some people always benefit from a broker’s guarantee, Juncosa said.
Piskorski said the key to buying a home is behavioral. “Some families just want a human to be there to ensure this is the right decision,” he says.
Ultimately, Juncosa said, agents serve a fundamentally human purpose, aiming to make homebuyers feel at ease about the biggest financial decision of their lives.
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