Market Musings: Tech replacing Realtors? Please.

There are few, if any, ‘easy’ commissions for real estate professionals

Market Musings: Tech replacing Realtors? Please.

Licensed real estate brokers date back to 1919, which is right about the time the counter-narrative began, insisting that they are not necessary.

The general argument — that real estate agents, having passed a scandalously low barrier to entry, do little more than ferry around clients to open houses and cash enormous commission checks — has grown more persistent in tandem with technology taking over our daily lives. Add a sprinkle of COVID and its accompanying restrictions on doing real estate business, and the argument has grown to a roar.

Real estate has been historically slow to decipher technology, which probably doesn’t help rebut the anti-Realtor camp. Agents have admittedly struggled with it, trying to figure out how to best leverage tech while acknowledging that it actually does make parts of their job (mainly the “finding houses” part) both easier and less dependent on them. It’s inaccurate, though, to say that the industry has “resisted” technology — especially in the Bay Area — even though some people insist just that.

When Compass blew like a category five-level hurricane into real estate a few years ago, it was largely because it sold itself as a next-generation “real estate technology company,” the “first modern real estate platform,” which paired “top talent with technology.” These aren’t the words of an empty blowhard. Compass’ ability to leverage data and tech has led; other agencies have followed.

And yet the nagging feeling that “I could just find my own place and hire a lawyer to do the contract” persists, almost 15 years after a pair of ambition-inflated Microsofties followed up their founding of Expedia by inventing Zillow and vowing to “do to Realtors what we did to travel agents.” Real estate sites like Zillow and Redfin have definitely changed the way consumers find properties; and yet, Realtors are still here.

In a recent Fast Company article, Massachusetts real estate broker Jason Weissman sounds the alarm for traditional real estate, calling on agents to “adapt or die” in the face of “PropTech,” the industry’s name for a wave of well-funded real estate-focused technology start-ups. Compass, which functions like a traditional brokerage, is one of them; so is Opendoor, an algorithm created for buying and selling properties online. If you can buy and sell with a few clicks, why do you need a real estate agent?

The answer is buried several paragraphs down in Weissman’s piece: “Real estate agents are still critical for the most important part of the purchasing process: advisory service,” he says. “If all politics is local, that is doubly true for real estate.”

Preach on, brother. Last week, my wife and I closed on a home in Oregon that was supposed to close two weeks ago and probably would be pending into infinity if not for our local real estate agent. The problem? I’m still not sure. I do know that we signed closing documents seven times and each time ran into some roadblock related to the differences between doing business in California versus Oregon, the pace at which they do business in Oregon and general confusion regarding legal terms, notaries and maybe an indifferent title company officer. Full disclosure: I’m still not sure what happened.

What I do know is this: during the last two weeks of August, our Oregon realtor, who we thought was in line for the easiest commission of his career, calmly guided us through local customs, doggedly advocated for us and even convinced the seller to grant us access to the house before actual closing, lest we be forced to re-rent our U-Haul for another three days. After close, when it looked like the title company was going to withhold a rebate we legally deserved, he didn’t back down until the issue was resolved.

In the end, it wasn’t the easiest commission of his career.

Then again, having worked around Realtors for several years, I’m not actually sure there are any easy commissions. No matter how breezy the job may look, how snappy the suits and shiny the cars, now matter how much technology makes it look like you can simply go online and purchase a home like you would a pair of shoes at Amazon, the only way to eliminate Realtors through technology would be to create an app that eliminates everyone involved with the process of buying and selling homes — agents, mortgage brokers, title companies, inspectors, contractors… it’s a pretty extensive list.

Once they do that, we’ll all then be free to float around in our WALL-E luxury chairs, surfing for our next house while simultaneously watching videos and stuffing our faces with candy.

Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.

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