Dangers Impacting Agents · A10
The Agent is Removed from the Transaction
A tech company cracks the code and connects enough of the dots to conduct real estate transactions without the need of an agent.
Danger index 31.5/100 · Moderate
Danger Index31.5/100Moderate
Probability3.5/5.080% Chance
Timing3.0/5.03-5 Years
Impact3.0/5.0Moderate Impact
In Context
A tech company cracks the code and connects enough of the dots to conduct real estate transactions without the need of an agent. The industry has always had a group of homeowners that have attempted to conclude the sale of their home without the help of a licensed real estate professional, thereby attempting to save all or a part of the commission.
Commonly referred to as FSBO (For Sale By Owner), this market segment has historically remained constant at around 10 percent of the total market. While certain lower economic profiles may be the central focus of today’s growing consumer cash consciousness, it isn’t the only driving force. There are consumers who consider independence from institutional norms to be a symbol of successful lives. Self-healing, doing your own taxes, growing your own food, and involvement in all aspects of life are positive personal goals for many.
With the Millennial Generation drawing closer to its natural home buying juncture, it’s obvious that their “first time” will not be as easy as it was for the Civic or Boomer generations. To start with, the opening economic profile for the Millennials is not what it was for their predecessors. It’s generally believed that the younger generations will have less cash to work with and more challenging financial thresholds to meet. As a result, Millennials will be looking for ways to shave costs from their real estate transaction. At the other end of the spectrum are the Boomers who are seeking to downsize from large homes to more affordable, “sized right,” and accessible housing options. Their primary objective will be to convert as much of their equity into cash as possible. Shaving costs from their real estate transaction may also become increasingly important.
Commonly referred to as FSBO (For Sale By Owner), this market segment has historically remained constant at around 10 percent of the total market. While certain lower economic profiles may be the central focus of today’s growing consumer cash consciousness, it isn’t the only driving force. There are consumers who consider independence from institutional norms to be a symbol of successful lives. Self-healing, doing your own taxes, growing your own food, and involvement in all aspects of life are positive personal goals for many.
With the Millennial Generation drawing closer to its natural home buying juncture, it’s obvious that their “first time” will not be as easy as it was for the Civic or Boomer generations. To start with, the opening economic profile for the Millennials is not what it was for their predecessors. It’s generally believed that the younger generations will have less cash to work with and more challenging financial thresholds to meet. As a result, Millennials will be looking for ways to shave costs from their real estate transaction. At the other end of the spectrum are the Boomers who are seeking to downsize from large homes to more affordable, “sized right,” and accessible housing options. Their primary objective will be to convert as much of their equity into cash as possible. Shaving costs from their real estate transaction may also become increasingly important.
Author's Perspective
Some consumers may be dissatisfied with how complex the home buying process is, but most of them can’t do anything to change that. There is one element that can change all of that: Money. Keep in mind that FSBO doesn’t necessarily mean without assistance—it means without an agent as we know it today. Consumers are availing themselves of alternative options regarding search and research. Furthermore, business models constantly change. Portals that may never have had the intention of being brokers may believe they have to, and an e-commerce or online auction company providing consumer to consumer services via the Internet may decide to expand their channel into residential sales. The bottom line is that change is certain. It is the approach that’s an unknown.