The Short Answer
Online listings, virtual tours, AI algorithms and chatbots are all working together in the real estate industry to improve efficiency and save time. With these recent advancements in technology, the drive to cut out middlemen and speed up real estate transactions has become even greater. This begs the question, will real estate agents become obsolete in the real estate industry?
The short answer is, not right now. A real estate agent brings a personal touch, local real estate market knowledge, negotiation skills and more to the table, which technology simply cannot replicate. The key, however, is for a real estate agent to stay relevant by focusing on the unique aspects that only real estate agents can provide, which are expertise, local market insights and customized client experiences.
Why Real Estate Agents Will Continue To Exist
There has been a significant nosedive in the need for showhouses, in-person meetings and home buying guidance, however this doesn’t mean that real estate agents have lost their place in real estate transactions. It simply means that real estate agents need to adapt with the changing times and become more flexible around the use of this technology in their transactions. Here’s why real estate agents will continue to exist:
Reason 1: Local Market Knowledge
Real estate agents have a knowledge of local real estate markets that is more intricate than technology may be able to provide. The key aspect is that they can tailor the information to each client and apply it to their client’s financial needs. This is something that technology cannot do just yet, as this requires a combination of experience, knowledge and certain logic.
Real estate agents can also use this market knowledge to provide accurate pricing information to sellers who need to price their home at a competitive price, and buyers who need reliable pricing information when they’re buying a home. This insight is specific and intricate, and the nuances of this cannot be provided by technology.
Reason 2: Personal Touch
Real estate agents bring a personal touch to each real estate transaction by using their interpersonal skills to understand the needs of each client and guide them through the intricacies of purchasing or selling a property. Real estate transactions often involve emotional decisions, and agents serve as trusted advisors, providing reassurance and expertise throughout the buying and selling process.
When making big purchases like this, people often require a personal touch and human interaction, which is where real estate agents come in. Real estate agents can essentially create lasting impressions and build relationships that technology alone cannot replicate.
Reason 3: Negotiation Skills
One thing technology cannot do is negotiate for a buyer or seller, which is where real estate agents are irreplaceable. Their insight into the local real estate market trends and prices, along with their years of practice, make them a valuable resource when negotiating the price of a home. Unlike technological platforms, this cannot be taught and certainly cannot be replaced by the likes of AI just yet.
The real estate market is dynamic, and prices are influenced by various factors, which means that they’re ever-changing. Real estate agents have their finger on the pulse of market fluctuations, which means that they can strategically negotiate prices based on the most current conditions. This often leads to the best outcome from the negotiations for the buyer or seller involved.
Reason 4: Legal Insight
While technology can help speed up real estate transactions, real estate agents provide specific legal insight. With their wealth of experience, agents bring a nuanced understanding of legal intricacies to the table, which also accelerates transactions and ensures compliance.
From contract intricacies to zoning regulations, the legal aspects of a real estate transaction can be vast. Real estate agents are well-versed in these complexities, and can therefore provide swift and accurate guidance, preventing potential legal pitfalls that could derail the transaction process. Along with this, agents can provide paperwork that is legally compliant, and they can review legal documents to ensure that all is in order.
Factors Which Could Reduce The Need For Real Estate Agents
Now that we’ve established that real estate agents are still a necessary part of the real estate industry, we can look at the factors that are currently reducing the need for real estate agents, which have led to the question around the relevance of their function going forward.
Factor 1: Direct-To-Consumer Platforms
With the rise of direct-to-consumer platforms, property owners may explore selling or buying properties without intermediary agents. These platforms empower individuals to take more control of their real estate transactions, but in so doing, reduce the need for real estate agents.
Factor 2: Technology Advancements
As we’ve mentioned above, the advancements in technology over recent years have served to speed up real estate transactions and reduce the need for administrative tasks that were typically handled by real estate agents. These automations and the use of artificial intelligence decreased the need for real estate agents, as some of their tasks can be performed by technological processes.
Factor 3: Easily Accessible Information
The internet is a large and easily accessible source of information on real estate transactions, which allows home buyers and sellers the chance to gain knowledge easily. This may give them the confidence to buy or sell homes on their own, without the use of an agent, because they feel that they are empowered with sufficient knowledge to navigate the buying and selling process.
Factor 4: Increase In Cash-Only Deals
Real estate investors are frequently offering cash-only deals to property sellers, which takes away the opportunity for real estate agents who are therefore not needed in the deal. Cash offers that are at, or above market value, are a win-win situation for buyers and sellers, and no negotiation is required.
How The Role Of A Real Estate Agent Will Evolve Over Time
The role of a real estate agent is poised for evolution, thanks to the major improvements in technology, market dynamics and changing consumer preferences. The way agents will evolve however, is multi-faceted:
- Embrace Technology: Technology doesn’t have to be seen as a tool for replacement, real estate agents can embrace the latest technology and use it to enhance their efficiency. Tasks like property valuation, marketing and market analysis can be done more efficiently by using AI, data analytics, and virtual reality.
- More Focus On Customer Experience: As the role of real estate agents becomes one that relies heavily on their personal touch, providing an enhanced customer experience can help them retain customers and provide a service that cannot be replaced by technology or other tools – the human element. Buyers and sellers are likely to use agents instead of other platforms for this purpose, which means that agents should lean into it and focus on providing a seamless and insightful customer experience.
- Taking On Advisory Role: It’s likely the agents will evolve into a more advisory role, to guide buyers and sellers through the process by tapping into their vast experience and knowledge of the process. From explaining intricate legalities to demystifying the buying or selling process, agents will serve as educators, empowering clients to make informed decisions.
- Lean Into Remote Transactions: As real estate transactions are done remotely more frequently real estate agents will need to lean into this by taking on clients in other geographic locations. Technology can facilitate these remote interactions and allow agents to understand other markets and tap into customers across various locations.
- Become Specialists: As the real estate landscape becomes more complex, each real estate agent will likely specialize in niche markets or specific types of properties. This specialization will allow agents to deepen their expertise, providing clients with a higher level of knowledge and service. Specialized skills may include expertise in sustainable properties, commercial real estate, or specific demographic markets.
Final Thoughts – Is This A Future-Proof Career?
As the competition becomes fierce for each real estate agent, staying relevant is key and adapting to the developments in the market will be vital to their success. Real estate agents are still a necessary part of many real estate transactions for buyers and sellers, so thriving in the future is indeed possible, however it will require a clear value proposition that is communicated well to clients.
For now, real estate agents are still a necessary part of the real estate industry, and the future isn’t likely to change that overnight. Trust and expertise are the two factors that set agents apart and can be a focus for those who are trying to future-proof their career as an agent.
The demand for real estate agents is on the decline and is likely to continue this trend over the next 10 years. This is due to the rise in platforms that eliminate the need for intermediaries like agents and allow buyers and sellers to conduct their real estate transactions, artificial intelligence, virtual real estate investing and more.
- For Sale by Owner (FSBO): Sellers can choose to handle the entire selling process independently. This involves pricing the property, marketing, negotiating, and managing paperwork. While this option offers more control, it requires a thorough understanding of the real estate market and legal procedures.
- Online Listing Platforms: Numerous online platforms allow sellers to list their properties without the direct involvement of a traditional agent. These platforms facilitate direct communication between buyers and sellers. However, sellers should be prepared to manage negotiations, paperwork, and legal aspects on their own.
- Real Estate Consultants: Consultants specialize in specific aspects of real estate transactions, providing advice on pricing, marketing strategies, or legal matters. While they may not handle the entire buying and selling process, they offer targeted expertise to clients who want assistance in specific areas.