When Realtor.com opened for business, the writing was on the wall, says Marc Sykes, Century 21 Mountain Properties broker manager and current president of the Reno/Sparks Association of Realtors.
The residential real estate industry was about to change.
Realtor.com, the official site of the National Association of Realtors and part of the Homestore.com family, is the California-based Web site that got a jump on the real estate world back in the 1990s, connected with the Realtors’Multiple Listing Service and now provides national consumer Web access to info off the MLS listings.
Back in the 1990s, Realtors across the country were wringing their hands,wondering if the Internet was going to put them all out of business.After all, who needs a Realtor if you can shop and buy online? So far, says Sykes, Realtors are still in business.
In fact,most Realtors have embraced the convenience of the Internet.
They pull their comparables from an internet-based database maintained by the MLS.
You have to appreciate the convenience of the Net, says Barry Wardell, manager of Assist2Sell, Reno.
The Web-based MLS database makes a Realtor’s life so much easier, he says.
He recalls the days when Realtors drove down to the local MLS offices and thumbed through hardcopy property listings, listened to one-minute “just-listed” announcements at weekly MLS meetings, and then snagged every house flyer they could lay their hands on – all information was verbal or hardcopy.And Realtors were the only ones who had access to the information.
Customers can now get that information – not all of it, but some of it, and enough to do a bit of shopping on their own.
That’s changed things.
Sykes calls this a transitional time for the real estate business.
Reed Simmons, a Dickson Realty partner, calls the changes an evolution.
Business has been evolving for the past 10 years in response to the Internet, says Simmons, but it’s “ramped up in the last two to three years,” and the evolution is far from over.
You can attribute part of that evolution to the internet-inspired increased consumer awareness, says Simmons, and another part to the discount brokerages that have flourished in the recent sellers’ market.
The discount brokerages created options, says Wardell.
Traditional brokerages, typically charging a 6 percent fee (3 percent per side), worked in the markets of yesterday, he says, because a Realtor’s job required more legwork and that was an obvious benefit to a consumer, one a consumer could see.
When a consumer is breaking tradition and doing some of that legwork himself, and when gathering the information is easier for a Realtor than it was in days of old, then, says Wardell, consumers are going to balk at paying higher, traditional fees.
That’s one of the chief reasons Assist2Sell and other discount brokerages found opportunities in today’s market.
The part of a Realtor’s job that the customer can’t see – the increased requirements for documentation and consumer protections warrant higher fees, says Simmons, and that’s where traditional brokerages come to play.
At the moment, there’s room for all – the traditional, the discount, and the flat fee brokerage, according to Sykes.
Different business models appeal to different market segments.
And they become attractive in different business climates, too, adds Sykes.
The real estate business climate changes constantly, depending on the volatility of the residential real estate market.
Discount brokerages and flat-fee listings, though they seem to be a big part of the transitions going on in the real estate business, are in fact just a stepping stone on the path, says Sykes.
Or a blip.
Or a long-term player.
The Internet is where the big questions for the future lie, says Sykes.What happens to the business if it can be done on the Internet, from shopping to offers to escrows and title to close? The Internet levels the playing field, says Simmons.
Regional brokerages such as Dickson Realty can appeal equally to a national customer base as can a national house such as Coldwell Banker.
“Companies that embrace the change,” adds Simmons,”will thrive.
Companies that fight it will find themselves at the back of the pack.”
What that act of embracing the Internet of the future will look like is still a big question to Realtors, but one thing is certain, regardless of technology, says Simmons.”Personal interaction will not go away.We still need to look a person in the eye when making a large financial purchase.”
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