Wikipedia says that the real estate industry is "Still in progress (due to legal or structural obstacles)" of being disintermediated.  Is it right?  What would happen if 90% of the real estate agents retired in the next six months?  

Would housing prices go down?

Would the 'time on market' go up?

Would transaction costs (commissions) go down?

My first reaction is that housing prices would not decrease.  Time on market may actually decrease because with the lowering on transaction costs people would be less concerned about losing money if they needed to sell sooner than anticipated. Real estate investments will be considered more liquid.  

So that leaves me wondering, would service levels experienced by consumers go down? 

The average 'top agent' handles at least 10x as much business as the average mediocre agents do.  Does the service levels provided by the industries top agents meet or exceed the service levels provided by our mediocre agents? 

 

6 Comments on Wikipedia - Disintermediation - Real Estate Industry - "Still in Progress"

SEP
05
2006
520,578 Points 229 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

An absolutely excellent and timely question. One we would all do well to study and be prepared to offer an answer.

There is no doubt that "flat fee" or "limited-service" brokers are here to stay, and we will always have to deal with their affect in our respective markets.

The onus on our industry (and I'm speaking to premium, full-service brokers/agents here) is to do a better job of justifying our existence and creating more demand for the viability of our services. Differentiation Selling.

The problem is that too many times we short change ourselves. In our willingness to compete, we devalue the level of our services and force ourselves to do more for less.
6:09pm • #1
622,478 Points 120 Featured Posts Outside Blog

Yes, top agents get the job done, right.  Getting a home sold is not just about the cost.  It's about getting it sold right the first time, on time and without issues that will come back later to haunt someone.
7:01pm • #2
151,388 Points 4 Featured Posts Localism Sponsor Outside Blog
Top agents (full service agents) have nothing to worry about.  They are top agents because they provide the service necessary to stay at the top and they get LOYALTY from their clients.
8:09pm • #3
165,482 Points 85 Featured Posts Outside Blog Called Shot Master

Leslie, I don't really think agents have anything to worry about.  At least in the short run.  What I am contemplating is whether or not the industry, how it is set up now, is the best for the consumer.

Could it work differently?  Better?

Kristal recently wrote addressing the issue.

Rich, I agree entirely with your comment!  Although the average consumer doesn't care enough about real estate commissions right now.  I do sense that the sentiment is changing.  

8:23pm • #4
OCT
09
2006
18 Featured Posts
Ade HouseJonathan - If you mean by "average mediocre agent" a lack of volume I must count myself among them. When it comes to the quality of service I will compete with the best.
2:04am • #5
AUG
08
2007
416,892 Points 63 Featured Posts Outside Blog
Jonathan,  the person in the comment thread above me is possibly some sort  of a scammer spammer.  Check his comments.  
5:55am • #6


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