Dear Monty: Selling and buying a home today is easy
We recently closed on our new home. We were pre-approved, and we shopped online for many hours using real estate websites and other websites to learn more about neighborhoods around homes that interested us. We used municipal websites, crime maps and Google Earth as examples of helpful resources.
After two months of searching, we zeroed in on a home with a nice video presentation and decided to look in person. We contacted the listing agent for an appointment. While we toured the house, she met us at the house and talked with the owner, who apparently was a friend. The rest is history.
It struck us that we did all the work, so this is a serious question: All she did was open the door, visit with her friend for 45 minutes, and go to her home office to complete the form. We signed online a short time later. Why did we need a real estate agent?
First, some background to put the conversation into perspective. Throughout history, humans have been innovating. Gutenberg invented the printing press in 1450, well over 500 years ago. The first known inventor was Thales of Miletus, who invented mathematics over 2000 years ago. No one knows who originated the wheel earlier in Mesopotamia. Innovation is the result of dissatisfaction. The more knowledge we gain over time, we notice new ways to improve.
Innovation has happened faster since Sir Timothy Berners-Lee brought the World Wide Web to the public in 1991. They did this using knowledge gained from earlier inventions. This invention is the transmission of information very quickly over the internet. It ushered in the iPhone and many applications to improve and inform the world.
Your question answered
We do not need real estate agents. According to the National Association of Realtors (NAR), in 2022, 10% of all home sales were sold by the owner without an agent. Those ten percents know that an agent is not necessary. You realized this through your experience. You used technology tools to gain the same information as the agents. That diminishes their value. The other 90% do not realize this, or they know it but have not acted on their knowledge. When Apple introduced the iPhone, not everyone bought one. There are still people that do not have one. This observation suggests that agents will be with us until people realize what’s happened.
In fairness, she also had to place the owner’s home in the multiple listing service (MLS). The MLS is another service that has lost value with the advance of technology. Many home sellers have learned to find the information they need to price their homes without the MLS.
The industry can still save itself
The real estate industry is not the only industry that has fallen behind. There are others currently facing extinction. NAR must find new ways to add value. They could start by making the MLS efficient and public-facing. They could police their members and purge the agents preying on uninformed consumers. In the process, they could stop trying to protect commissions everyone knows are not worth the service. Finally, they must recognize that houses positioned correctly in a new tech world sell themselves.
Richard Montgomery is the author of “House Money – An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home.” He advocates industry reform and offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty or DearMonty.com.