The Future of Real Estate as We Know It

RES 497

Strategic Management of the Real Estate Enterprise

In this paper, I will look into the potential changes to how consumers shop for homes in this current market. The Real Estate brokerages as we know it has changed significantly and are now offering agents new ways to do business. Thanks to new tech companies that strive to make things simpler for consumers and professionals. These companies are helping consumers bypass the need for a real estate agent altogether. However, with all these improvements, people buy, sell, and manage properties differently. However, in this age of information and DIY will Real Estate Agents become obsolete?

“Patrick van den Bossche, president of Realty Executives, a brokerage based in Phoenix, believes consumers will never give up the information and transparency they now have at their fingertips” (Thorsby, 2018).

Income growth and Population are two of the primary drivers for real estate demand. Due to overbuilding and fierce competition from online sales in the last few years, the perfect storm has presented itself in the Real Estate industry. Realtors have found themselves going back to school literally and figuratively. Today there are more and more agents in Graduate programs with concentrations in real estate in recent years. This is in an attempt to fill the demand for more well-round and well-educated practitioners in the Real Estate industry. (Weinstein& Worzala, 2008)

Data and Service

Today data/information takes on a more critical role for consumers. Consumers are looking for transparency in the market. They are looking for real numbers to ensure their decision is the right one. So many people lost their homes in this last bubble. Consumers felt taken advantage of by banks and real estate agents. For the first time, the greed of the industry was on full display, and it is something people will not soon forget. Following the bust of 2008, it was apparent how little consumers knew about such a significant financial decision; buying or selling a home.

Since 2008, transparency of information has become vital to the homeowners and potential buyers alike, and this is evident by the rise and popularity of real estate sites like Zillow and Trulia, which provide an abundance of information that used to be solely available to Real Estate professional via MLS. Information such as median sale price, the number of homes for sale, and details about individual properties to mention a few. “However, with so much information now available to consumers online, the real estate agent’s role has to change, as explained by Clelia Warburg Peters, president of Warburg Realty in New York City” (Thorsby, 2018).

Transactions

It is not just the way people pay for a house that may change – it is the transaction itself — with new currencies becoming more widely accepted like bitcoin and cryptocurrency. There is also the potential for new financing options, and this will require greater specialization on the part of real estate professionals. Agents will need to step up their game in these areas if they want to compete. They will need to be able to walk buyers and sellers through these new options process.

Consumers will also need to understand new selling and buying options offered by internet companies such as Open Listing, OfferPad, and Zillow Instant Offers that can purchase real estate with cash or versions of it and repair the homes themselves or flip them quickly for a profit. But in these cases, homeowners typically receive offers for less than what an agent would suggest. These types of offers tend to come from real estate investors, and they are limited. Had they listed with an agent, they would have had more buyers look at the property and would get a better price. But that also comes with a longer transaction cycle and more time and money to outside sources (agents, commissions, escrow, inspectors, appraisers, etc.) The flip side is that they will have a quick sale, no need to make updates to the house and receive a cash payment without having to pay commission.

No matter how much the real estate industry modernizes and evolves, the goal for buyers and sellers will always remain the same: to make the deal that satisfies their needs and leaves them feeling they got the best bang for their buck. As we navigate this new real estate industry, we must remember the following:

1. What is best for you- Seek the property, platform, mortgage, and deal that works for you. Before you sign anything research, all your options and do not pull the trigger until you are satisfied and ready to move forward.

2. If you need help seek a licensed professional- Real Estate agents will be around as long as there is Real Estate to buy and sell. Their roles and responsibilities may change, but they are in no fear of leaving us anytime soon. Moreover, if you find yourself in need of one, a quick internet search will yield countless local, licensed agents for you to choose from. There will always be some nuances you do not understand, and it is best to get assistance where needed.

3. Do your research-Do not rely on others to give you the accurate info. We are in the heart of the information age, and there is no excuse not to do your own research on the housing market, you intend to buy and sell in. This includes how much house you can afford and what is the best loan for your situation. A simple search starting from Zillow to the HUD (Housing and Urban Development) – to help you make a more confident decision.

Conclusion

I believe that in this world of fake news and misinformation, consumers should still be advised by or consulting with a licensed Real Estate professional in all real estate transactions. There are things that agents simply know from years of experience that most people would not even think to ask or consider. Like is there lead paint, is there asbestos, is that addition permitted, or is the electrical nob and tube. These are things that can make a real estate deal and can cost an unsuspecting buyer a lot of money. There is a reason Real Estate agent’s have been around for years and will continue to be around for years to come. Technology is trying to answer all these questions, but there is something I learned a long time ago from my computer programing teacher. “Garbage In. Garbage Out”. You only get out of something what you put in.

A perfect example is The Carfax report; it boasts that it will help consumers buy safe cars and will tell you if the car has been in an accident and how any. Well, my truck had been hit no less than five times, (luckily I have never been in it when it has been hit) but according to Carfax reports it has never been in a single accident. Moreover, every accident has been reported and repaired through my insurance and dealer. I rest my case.