Matthew’s got some useful insights from the realtor’s perspective:
Whereas some agents are dwelling on the issue that the Buyer is finding their home on the internet 32% of the time and only 33% of the time by the agent; I prefer to look at the fact that consumers are only find the home they buy in the newspaper less than 3% of the time. Knowing this should help agents save some money. To me, fear of the “future” is less productive than knowledge of the present.
If the seller is demanding expensive newspaper marketing, I can show them this report and then show them all the marketing I can do, just by using Postlets.com. You can show that you’re covering 80% of the most useful marketing venues, just by being an agent, putting a sign in the yard and using MLS with IDX, Postlets, Realtor.com, Zillow, Trulia, Craigslist, etc…
This sounds right to me. But there’s an angle here that Matthew isn’t thinking about.
If the Buyer is finding the home on the Internet 32% of the time, then the price charged by the Agent has to go lower. By how much? Who knows. Even if the total price charged to the Buyer/Seller remains the same, the percentage of that price that goes to the Agent for his labor has to go down, to reflect the investment made in the capital asset of the website by the Agent, or the Broker, or whomever.
The 33% of the buyers found by the Agent directly –> the Agent in that case is bringing more value to the Seller, as compared to the 32% who found the property on the Web.
If the seller is demanding expensive newspaper marketing, but you can show them that just by using Postlets.com, you can cover 80% of the most useful marketing venues, then you also have to be prepared for the seller demanding that you cut your commissions. After all, if you have to do less work, then you should be able to charge less and still make the same profit.
The assumption that technology simply lets an agent make more money is wishful thinking. Consumers also recognize that technology makes your productivity higher, and accordingly, can expect that your price will go down. This is one of the big disconnects in the market today: brokers and agents seem to expect that all of the economic value created by technology will be captured entirely by them, while consumers expect that they will get that value. (Might be useful here to look at Redfin and any of the other rebaters.)
The real outcome is likely in between Agents capture it all, and Consumers capture it all. But rest assured that at least some part of the savings will be passed on to the consumers, like it or not.