The end of the Realtor

By
Mortgage and Lending with PS Mortgage Lending 305-791-4874 or 888-845-6630 365768

Graphs and Articles provided by National Real Estate Post and GeekWire

 

I wanted to pose the question: Are we seeing the end of the real estate agent? More importantly, was this perpetuated by the real estate agents themselves? So we have 2 very large internet companies, tech companies that have been involved in real estate now for awhile, I’m talking about Zillow and Redfin. Both of them are getting involved in real estate in different ways. This has had a huge impact on the reality of the home market , the appearance of companies like this has started to interrogate the very same existence of realtors, if machines can help anybody sell a property, why would you need a middle man?

 

And who perpetuated this? Who has caused this to happen? Who has given them the resources, the income to achieve this level, to be able to step in the game? The answer, regrettably, is not that simple...

 

 

Since 2015, Zillow's revenues have skyrocketed. Over 400% now of what it was back then. And in this last year, if you look at the chart you see 2019 it's just really gone up more than ever. How is this happening? Well, what's ironic is that their revenue increase is coming from realtors.

 

Zillow group delivered premier agent revenues of $217.7 million! 47.9% of their total revenues are coming from premier agents, coming from realtors who are advertising on Zillow! Their revenues have increased 51% this year in 2019. Now they're taking that revenue, they're reinvesting in a technology and listings, being able to offer buyers and property owners to list their properties on Zillow, bypassing the “evil” real estate agent who collects a commission. Zillow will buy the property, they will list it, and guess what? So far into 2019 they have 35,000 offers. In the beginning of 2020 they are expanding to over 20 more markets. And this is because real estate agents are paying them for leads. Creating revenue so they can create this type of business. Which is supposed to be better than what realtors can offer. This is gonna hurt realtors!

 

 

Redfin, from its own trench, is looking to disrupt real estate agents with a new program where home buyers make direct offers online without an agent. While Zillow was kind of removing what listing agents can do, Redfin is now going to step in and hurt what buyers agents can do. Now you can skip this middleman and just go straight in, they have this 55 question questionnaire that you just fill out to help them negotiate that offer for you. I don't know, to me it's always better dealing with a living person that you have direct contact with, that knows your market, but this is gonna hurt realtors.

 

This article is talking about Refin’s CEO and it's a tech powered brokerage, this was a plan of theirs all along. Redfin, like Zillow, admits their income comes from real estate agents who are in their advertising and buying leads.

 

“It's something we've always wanted to do… But we had to get listings here, a buyer audience to really build a marketplace where we can put these together” the CEO of Redfin says.

 

They needed the realtors to generate this revenue, to generate this market share to then be able to turn on the realtors. I don't think it's going to be the end of realtors. I was arguing this was someone at dinner last week in DC who's a real estate investor himself, and he says “You don't need the realtors anymore you can bypass them”. I completely disagree. I think that a lot of people are going to get hurt by this, they're going to get bad deals, they're not gonna have the right representation.

 

Cutting realtors out is gonna hurt the whole industry. And there's nothing like a personal touch, I think a realtor is always going to be here, but I do pose a question: Is this the end of the realtor as we know it? Is it going to change and evolve? Will the financial advisors change and evolve like when online trading started? Have we as mortgage professionals evolved when had mortgage apps appeared? These apps don’t really remove the mortgage professional, people think they do, but when you use that app you’ll still end up having to talk to a mortgage professional.

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Rainer
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Clay R. Seay
Florida Homes Realty & Mortgage - Saint Augustine, FL

Phil, what a great article highlighting the impact Zillow, Redfin and the new ones coming soon to a town near you have on the REALTOR community and its existence. You state some incredible statistics that we all should be aware of and watch carefully.

Your closing statement about using Mortgage Apps and at the end you still end up talking and working with an real live person. That foundation is why REALTORS will continue to evolve and remain in business. It is a people business, homes are the product. Everyone may have to change and adapt to continue to be successful but change has always been one of the few constants in the real estate business.  ( and Life) .

Jun 14, 2019 02:00 PM #1
Anonymous
Martijn Schneider

Hi Phil, Thank you for your story. Spot on. I also believe we cannot live without the professionals, real people. Thats why I have created HousingAgent.com, a worldwide directory to promote all kinds of real estate professionals and get the traffic direct to the agents website, direct contact. Kr. Martijn

Jun 16, 2019 12:59 AM #2
Anonymous
Sheyenne Schultz

The end of the Realtor is here!!! Zillow is the worst... and now others r following. I know tons of agents who are paying and have paid TOP DOLLAR to Zillow for months now and some have been long term Zillow advertisers for YEARS including me... and now for the past 6 mo... u can't get 1 decent lead! It's a joke! They've changed their algorythm out here in CA and want u to think it's u! Bullcrap! Now all the leads are NURTURE leads they don't want to talk to an agent yet... such crap or they want rentals or mobile homes which we don't really have or they have u stuck in the lowest price range in your PAID FOR territory. So if most of ur homes are in the 6 to 700000 range... they have people wanting to see the $300,000 condos which is a joke... Gee all the homebuyers in the PRICE RANGE for that territory U as the realtor PAYING for their BS advertising ARE NOT GETTING THEM. Oh, and to add insult to injury for them saying Ur just not paying enuf for your territory and wanting u to pay more.... U are now getting buyers who already HAVE an agent when they send them to ur inbox or connect u to them as a live lead transfer... So u have wasted ur time answering the phone to a lead who already has an agent about 97% of the time! Wow, this is helping realtors like crazy NOT! I know tons who have gotten not 1 person in escrow in the past 6 mo of heavy advertising due to the CRAPPY so called leads they are getting away with sending to us now. These long term agents r fed up and basically leaving the industry... and yes, they are using all our money to fund their FRAUD and ILLEGAL activity in driving agents out of the business and using their tons of callers who qualify people to keep the BEST of the CROP for themselves! The Government needs to step in and shut them down and realtors need to file a class action lawsuit against them for billions in fraud.

Aug 05, 2019 07:39 PM #3
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Phil Stevenson, CRMP

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