Must the Agent Be Local?

I’ve been busy with earnings season, which provides a unique peek under the hood of the five public companies (well, four, since EXPI doesn’t do earnings calls) and what they’re thinking about the future. But I saw something on the Book of Faces that made me think it’s a topic worth considering.

It’s also a topic that seems appropriate in light of the RE/MAX earnings call, which shows that we have a conflict of visions going on as to what the future will look like. So let’s get into it with a question:

In the post-COVID future, does the real estate agent have to be local?

The Brad Inman Post: Real Estate Adapts

This question was triggered by a post that Brad Inman, publisher of Inman News, put on Facebook, which said “Good stuff. Our industry is so adaptive” and featured this image:

The comments to the post generally show that we are seeing more and more materials like this from brokers and agents, and that the technology and the techniques being used are not new.

This is more or less virtual real estate brokerage, and it was always possible. It’s just that consumers were not really into it, and the housing industry overall — including title, mortgage, inspections, etc. — weren’t really seeing the point of doing virtual… until COVID hit.

As you can see from the SELLectrealty ad, it is not only theoretically possible but actually practical to buy a house without ever having set foot in it. Now, most people are not going to do that; we get that. Maybe investors would, or the super-paranoid, or maybe renters who aren’t taking on a 30-year commitment would, but most buyers are going to need to walk through their future home before purchasing.

But everything other than that walkthrough/tour can be done virtually, online, or over email. It’s almost like buying a car. The one thing you cannot do remotely in buying car is test driving the specific vehicle you want to buy. I know, because I bought a truck over Ebay last year, and it was easier than I had expected.

So real estate is adapting. Good!

Question is, where does this adaptation lead?

Conflict of Visions

In my analysis of RE/MAX’s Q1 earnings (VIP post), I wrote:

As I noted in my Zillow analysis, Rich Barton saw the exact same things that Adam Contos and team saw, and concluded:

This is not going – we are not going to bounce back to the way things were done before.

We are seeing all kinds of systems, processes, business models, players change right now.

And there are going to be a bunch of sad stories there, but there are going to be a bunch of happy progress for our consumers and for the industry as a result.

A lot of the technology that I have already been talking about, this kind of Real Estate 2.0, a modern platform for virtual shopping and digital closing. That’s all – it’s just – it’s really rapidly progressing right now and that’s not going to go back either.

Now, Zillow also has experience in navigating the Great Recession. But they came to an entirely different conclusion than did RE/MAX. Maybe it’s because Zillow navigated the Great Recession as a technology company, while RE/MAX navigated it as a real estate company, but we have a real question as to what the future holds.

Broadly speaking, I think there are two visions of what the future holds in the industry.

One says that while we’ll have more tools, more 3D tours, more remote notaries and so on, the fundamentals of real estate will remain the same as it ever was. Agents will work their spheres, work their geographic farms, bang the phones, and hold open houses (with more PPEs and more cleaning), and so on. Technology will make things a bit more efficient for agents, as they can do listing appointments remotely, or not spend weekends driving a buyer around (the buyer can do a 3D walkthrough instead, to hone in on the 2-3 houses he really wants to see), and attend closings virtually, and so on. But the basics of real estate won’t change. This is, roughly speaking, the RE/MAX vision, and I think it is the one shared by most brokers and agents.

The other vision says that everything will change. Nothing we have counted on as basic building blocks of the industry is sacred; it’s all up for grabs. The fact that none of us know what is going to change and how doesn’t mean that things won’t change; it just means we don’t know. This is, roughly speaking, the Zillow vision: “We are not going to bounce back to the way things were done before.”

I’m in the latter camp, mostly because (a) history shows that huge technology changes eventually lead to huge changes in every industry, and (b) within real estate, we have had these trends developing for a while, and COVID accelerated the timeline for existing trends.

So… let’s see if we can’t tease out one possible change.

Why Must the Agent Be Local?

Looking at the SELLect Realty marketing above, I have to ask why the real estate agent has to be local.

  • Home search can be done online.
  • Showings can be done virtually, and when the buyer narrows houses down to the few he has to see in person, technology can let the buyer in, and the buyer agent (the actual advisor) can be on Facetime or whatever to provide guidance to the buyer.
  • All meetings can be done virtually.
  • Documents can be signed online, and for those ass-backward jurisdictions that still require a wet signature, remote notaries can do those.
  • Inspections, closings, earnest money — all of it can be done remotely.

So why must the agent be local?

Say I’m buying a house in Las Vegas. Why couldn’t the agent be sitting at her computer in Boise, as long as she is licensed in Nevada, and has access to the local MLS, and has access to local data?

I was thinking about my own life, my own business, and realized that I had never physically met my bookkeeper, my accountants (three of them), or my attorney. Before my current graphic designer/webmaster, I had never met those people either. I’m using a business bank that is entirely online; I have never met my “banker”. None of those things influenced my decision to work with these remote professionals, nor has the fact that I work with them remotely impacted the quality of the service.

So why is it different for real estate?

I can only think of two possible reasons.

Local Knowledge & Expertise

The first reason, and the one I think most real estate people will invoke, is that buyer needs local knowledge, local expertise.

There is nothing more local, more dependent on location, than real state. We all know the cliche: local, local, local. Two identical houses, situated across the street, might be completely different in value because one floods and the other one doesn’t.

That would be a very good reason why the agent has to be local. But there are three problems here.

First, what is local? Is a county local? A city? A neighborhood?

An agent might know a particular subdivision like the back of his hand. That doesn’t mean he knows the subdivision across the street. An agent might be an expert in one neighborhood, but not know anything about a neighborhood across town. Maybe in rural areas, one can be an expert across two or three counties, but in dense urban areas, I find it difficult to believe that an agent could be an expert in even one county. Harris County, which contains Houston, is 1,777 sq. miles in size, with over 4.7 million residents. That’s larger than Rhode Island. There is no conceivable way that any human can claim to be a local expert in all of Harris County.

Second, how many real estate agents in an area are actual local experts? What does it even mean to be a local expert?

Just living somewhere doesn’t make one a local expert, at least not to the degree that one should be paid for that expertise. Knowing which restaurants are good nearby is fine, but Yelp exists. exists. Knowing that there are a couple of parks nearby is great, but Google Maps shows 3D street views of said parks.

Third, most of what is truly valuable about local expertise cannot be shared by real estate professionals thanks to the Fair Housing Act and its various implications. You see this if you log on to someplace like’s forums, where local residents who are not constrained by Fair Housing laws freely talk about gang activity, which parks are dangerous after dark, which streets are safe and which are not, the ethnic makeup of various neighborhoods, where the Asian groceries are, which schools are good and which ones have metal detectors at the doors, and so on and so forth. No real estate professional can discuss most of those things and not get in big trouble.

Lead Generation and Sales

The other big reason why an agent must be local is lead generation and sales.

Real estate is a relationship business, or so we have believed for as long as real estate has been around. People list with agents whose yard signs they see around the neighborhood, who do community events, who come to soccer practice, who attend local churches and community organizations and so on. People refer friends and family to agents they already know. That is the bedrock of the business of real estate, and has been for decades.

This is why brokerages went to the recruit & retain model, and why every coach everywhere keeps talking about maintaining relationships with your clients and your sphere through this COVID crisis. Everything is relationships in real estate.

Thing is… that’s also how lawyers and accountants and insurance salespeople also worked for decades. Until they didn’t, because the Worldwide Web made it possible for me in Las Vegas to find and work with an accountant in Texas, or a lawyer in New York, or a graphic designer in California.

Are we so certain that lead generation fundamentally remains, and will fundamentally remain, about local outreach, local relationships, and local community involvement after COVID?

The Rise of Telemedicine

In this context, note that one of the biggest changes with COVID is the catapulting of telemedicine to the forefront:

In fact, a study showed that in the U.S. alone, 82 percent of consumers do not use such services. This sad reality can be attributed to the lack of improper infrastructure to support it and to the lack of awareness. Another factor is that cultural aspects haven’t been taken into consideration, like it’s usually the case in digital health.

Just a couple of months ago, no one could have predicted the extent of the COVID-19’s effect on society. Entire countries are under lockdown in a bid to limit the spread of the virus. Digital health fares as an adequate solution in these circumstances. Robots help in monitoring infected patients to limit contact with medical personnel, deliver medical supplies and disinfect wards.

As companies and even schools adopt the work-from-home solution, remote consultation is also becoming an increasingly attractive option in healthcare. The COVID-19 pandemic brought telemedicine into a new light. As medical professionals need to stay healthy and disease-free, the need for remote technologies skyrocketed. Both the CDC and WHO are advocating for telemedicine to monitor patients and reduce risks of them spreading the virus by traveling to hospitals.

Following this lead, The Academy of Family Physicians and the American Medical Association (AMA) released related guidelines. The US Government also took significant steps in order to expand telemedicine services. We’ve also seen practical examples like the Bergen New Bridge Medical Center dedicating a COVID-19 telemedicine service.  “These are the moments that we were built for,” said Dr. Jason Tibbels, an executive with telemedicine provider Teladoc Health.

Is there anything more local than your doctor? I have to bring my body, which is the thing at issue, to my doctor so he can see if that cough is something serious requiring hospitalization or something I can cure with a prescription. If I break my arm, I have to physically go somewhere to get it fixed.

And yet, COVID is changing the rules of medicine, and changing the culture around telemedicine.

Are we so certain that real estate will remain so intensely local post-COVID?

Change Is Not Inevitable

Here’s the thing: I tend towards the “things are going to change” camp when it comes to real estate, but in other areas, I’m in the “nothing will really change” camp.

For example, I do not believe that plumbers will go virtual after COVID. If my sink is backed up, I don’t need tele-plumbing; I need a plumber to show up at my house with his tools and clear the problem.

I don’t believe that restaurants will become takeout-only after COVID. There is something really deep in our human psyche that makes the experience of going out, having someone else cook the food, and having someone bring you food, drinks, silverware, and so on fun and interesting and worthwhile.

I don’t believe that dating will be fundamentally transformed after COVID. You can swipe all you want, do Zoom all you want, but for obvious reasons, at some point, you are going to have to occupy the same physical space as the other person… if you know what I’m sayin’. It’s not dating otherwise. It’s digital pen-pals.

So I don’t think that COVID necessarily means that everything will change.

I lean towards real estate changing, because while houses are physical and local, real estate services are not physical and not necessarily local. But I could be wrong.

So, let’s turn it over to you. What do you think?

Are you more in the RE/MAX camp of “nothing really changes” or in the Rich Barton camp of “everything changes, and we’ll never go back to the way things were done before”?

Whichever vision you have of the future, do you think real estate agents will be local because they must be? Or do you see a possible future where the real estate agent herself might be remote, providing services remotely, using technology that all of us are adapting every single day?

Inquiring minds want to know.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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13 thoughts on “Must the Agent Be Local?”

  1. One caveat might be in a town or city where POAs and HOAs operate at scale. I live in just such an area. Warring factions of homeowners, supreme court cases over fees, proposed assessments, controversial board elections, etc. In my experience, those types of communities don’t air their dirty laundry on public internet forums. Another might be in post-sale services, i.e. navigating local governments, connecting investors with a strong PMC, etc.

    That said, I concur wholeheartedly with your fundamental argument.

  2. Rob this is a great post. I was just thinking about this. We’re running a “Seller Workshop” offer that would be held in-person at a local library in the past, but now on a webinar. People show up. It’s the same presentation, Q&A at the end, everything. Attendees book listing presentations on Zoom afterward and sign virtually. No driving – no need to go to the house. The listing presentation can be done from anywhere in the world.

  3. The question I would pose is: what’s the advantage of NOT being local? Why is that agent in Boise going to outcompete an agent who lives in Las Vegas? Even if their skills and local knowledge are the same (unlikely but possible), they have a major consumer perception gap to bridge.

    And before we even get there, it assumes that the remote-tour becomes a norm. While that might increase, how much? Will 25% of buyers never meet their agent? 50%? 75%? Even if 75%, that agent in Boise has now written off 25% of their TAM – a problem the local agent does not have. Boise agent’s conversion falls when 25% of their would-be leads bounce. Their customer acquisition costs are higher.

    • Even as we become more and more data driven, we are not robots. Humans still buy on emotions. I evaluate out of state investment deals and I may be able to find great neighborhood data that supports my investment thesis. At the end of the day, it feels comforting to have a local broker give you their anecdotal reasons for why this neighborhood is great and how it is changing and how there is this great coffee shop that the locals love.

      Yes, now we can view homes virtually, but it helps ease my mind if a broker tells me he has personally seen the place and drives past the property every day and loves the neighborhood. It is not the same as someone from out of state virtually touring you through a property when they have no more knowledge of it than you.

      As Brian asked, “what’s the advantage of NOT being local?” – the emotional side of us I believe will want that local human element to get a deal done.

      • Good points all.

        Just wondering if that “local human element” applies elsewhere in your business life.

        Lawyer? Accountant? Stockbroker?

        Like I said, telemedicine is on the upswing, and I can’t think of anything more local or more emotional than your doctor, but even that industry is changing.

        Doesn’t mean that real estate will change; just thinking through possibilities. 🙂

    • I think the question revolves around what it means to “meet your agent.”

      I know in the past two months, I have met a LOT of people over Zoom. It’s remarkably close to sitting across from them over coffee. It’s not the same thing obviously, but I’d say it’s 90% there.

      So a different way to ask it is, if a buyer can meet their agent over Zoom, have long conversations, get advice, etc., what % of them will still insist on shaking hands at a local Starbucks before working with the agent?

  4. One other point, I think you leave out a lot of incredibly useful local knowledge that isn’t banned under Fair Housing or simply information available on Yelp or with WalkScores.

    My area has a lot of foreclosure for reasons unrelated to the health of the market, many in good condition. Most buyers might be afraid to go foreclosure, but I highly recommend them (Many are in good enough condition for VA loans).

    One developer infamously used construction debris as fill dirt in a now stigmatized corner of a neighborhood.

    Consumers also bring a lot of preconceptions to my market that have to be educated away (e.g. “I want to live close to work” – me “EVERYWHERE is within 20 mintues of your work in this market”). Meanwhile, I am practically terrified of doing business in a city just 20 minutes away because the market is so different and I”m aware of how little I know.

    I don’t see this kind of analog knowledge being scaled or “outsourced” any time soon. And it’s not inconsequential knowledge. It can easily can add $10,000s or $100,000s of value to a homebuyer/seller.

    • “Second, how many real estate agents in an area are actual local experts? What does it even mean to be a local expert?

      Just living somewhere doesn’t make one a local expert, at least not to the degree that one should be paid for that expertise. Knowing which restaurants are good nearby is fine, but Yelp exists. exists. Knowing that there are a couple of parks nearby is great, but Google Maps shows 3D street views of said parks.”

      I know there are real local experts who work in real estate; I’ve been fortunate to work with a couple of them over my lifetime of buying and selling houses.

      But what % of agents in your market qualify? What % of them know what you know, Brian?

      • I would say few agents have that expertise.

        But, because of the Pareto principles, MOST buyers/sellers get that expertise from their agent.

        The top 10% are doing 90% of the deals. The top 10% DO often know their markets. Meaning most clients are benefitting from these hyperlocal insights.

  5. A couple quick thoughts:

    A great, knowledgeable agent will know where the potholes are, and have a sense as to what’s coming next.

    Potholes – I mean that they will know how quickly roads get fixed, what infrastructure plans are, what the whispers are for improvements.

    What’s next – as I tell my clients, I try to know what’s likely to happen in the field across the street, or the development down the street, or what the likelihood is of the local Board of Supervisors’ race is of flipping from pro-growth to anti-growth.

    A great local agent will know what questions buyers should be asking that will affect their investment, and their quality of life.

    As far as the benefit of meeting the local agent in person, I find enormous value in meeting my clients, reading body language, and the interaction between them. But I’ve also represented many clients, buyers and sellers, whom I’ve never met.

    “Second, how many real estate agents in an area are actual local experts? What does it even mean to be a local expert?” – I think that answer is likely a reasonably high percentage of the 15% of agents who do the bulk of the business.

  6. I think its all about the data. Right now buyers feel comfortable with agents because they trust that local agents have more accurate data or have the best ability to acquire this data. Also if the information given is incorrect, there is more pain from somebody that may have to live with a bad reputation in the community they do business routinely vs an agent living in the Philippines where that agents social consequences could be minimal. In our current world, a customer with a product complaint outside real estate, is more likely to feel satisfied from an in-person resolution, second from a phone call and last from a chat, but that is changing quickly. In real estate, as better and more complete/accurate data is available in the many facets that real estate truly is (restaurants, commute, community, physical structure, natural light, noise level, feel of an property, upcoming projects, builder reputation, etc), agents that develop personal trust, may be able to work from anywhere. Further, when data is pristine, who needs human agents but rather a full artificial intelligence agent that understands more about your personal preferences, goals and history, who could do a much better job fully analyzing the situation to your favor accurately. This jump into full AI agency is still light years away (if ever) from being realizable as we lack the AI and pretty much all of the data. We are somewhat closer to human aided AI, a blend of higher human trust for experienced filtering through access to better data and thus better assist a client, from anywhere or everywhere.

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