When you look at some other industries, such as the Travel Industry, technology has had a significant impact on their viability. I travel extensively and I haven’t used a travel agent for many years. Does this mean that real estate agents will perhaps be replaced by technology in the near future?
If you think about it, buyers now have access to most property listings through the property portals – much in the same way that a traveller can access flight and hotel prices online. Wouldn’t it be possible for a buyer to purchase a property online and cut the agent out altogether? Technically it’s possible – but is this good for a seller?
The short answer, I believe, is “no”. It’s not good for a seller and therefor technology won’t replace the skilled estate agent. But what it will do is ensure that estate agents need to demonstrate their value to the seller in order to survive.
When an airline sells their seats they do so on price. That’s the price and you either pay it or choose another flight offering you better value. There is no negotiation.
In real estate, there is a very real negotiation between the seller and various buyers that show interest – and the way this negotiation is handled will make a significant difference to the price the seller will get. Technology cannot replace the skilled estate agent in this process.
Every seller wants to sell his property for the maximum market value. In order to achieve this, marketing and selling strategies need to be employed to attract maximum buyer interest. This is where technology does play a large role – and it’s important that skilled agents use the technologies available to ensure a listing is exposed so as to appeal to a wide buyer pool.
The agent then needs to work that interest to the point where buyers make written offers to purchase a property. There are many components to an offer that can be negotiated until both buyer and seller agree: price, terms, and timing. A lower offer with better terms and timing could be much more attractive to a seller than a slightly higher offer with onerous conditions.
Additionally, a seller would need to know from their agent what other potential interest there may be before accepting an offer. Could there be other pending offers? Could the agent get the buyers to compete for the property?
It’s not uncommon for a skilled agent to sell a property at more than the list price. We recently closed a sale at 12% above list price, much to the delight of the seller. Technology would not be able to achieve the same result and the human element that manages the negotiation is critical to the result.
That doesn’t mean that all agents are indispensable. Only those who demonstrate their ability to use technology and their marketing strategies to create buyer competition, and who have strong negotiation skills, will add real value to the seller.
Principal, Harcourts Platinum