Will real estate agents become obsolete or morph into fee-for-service real estate consultants?

NAR RE Consultants 1999

Early technology adopters are using Quora to discuss whether real estate agents are becoming obsolete, fifteen years after their predecessors first declared the real estate agent is out of a job as they know it.  Yes, “There are few things an agent can do for you that you can’t do yourself,” but that’s old news.  A decade ago, Julie Garton-Good, founder of the National Association of Real Estate Consultants and author of Real Estate a La Carte, said that 80% of the things real estate agents do for consumers do not require a professional license.  However, that does not necessarily translate into the conclusion that specific “functions…[are] much less valuable in the information age.”

Instead of devaluing expertise and professional services, The Real Estate Cafe and others would argue that the pricing model, namely the real estate commission, is obsolete. That conclusion is also more than a decade old. In 1999, consultants at Arthur D. Little told their client, the National Association of Realtors’s (NAR) Strategic Planning Committee, that real estate agents would morph into real estate consultants as documented in the slide above. Three years earlier, the former chief economist of the National Association of Realtors predicted, “The next major revolution in real estate will be fee-based services replacing the blanket commission pricing that has dominated the industry for so long.”

So instead of asking will real estate agents become obsolete, does it make more sense to ask, “When will real estate agents become fee-for-service real estate consultants?”  The Real Estate Cafe began offering a menu of services and rebates sixteen years ago, and others will follow.  But buyer beware: articles like this won’t attract true professionals. From the headline “Cash in on real estate consulting” to the conclusion “Consulting is the antidote to commissionectomies!” this article misses the point.  The current generation of do-it-yourself (DIY) digital natives do not need or want full-service and seek out fee-for-service real estate consultants so they can use and pay for their services “a la carte.”  If agents disguised as consultants are trying to upsell DIY consumers to their “traditional commission model,” they’re betraying their client’s or customer’s motivation — saving thousands of dollars on individual transactions and billions collectively by doing some or nearly all of the work themselves.

To learn how The Real Estate Cafe continues to rollout new money-saving tools and approaches to homebuying, follow us on Twitter (or our fledgling Facebook business page).

Posted in commission rebate, Consumer protection, Defensive Homebuying, DIY Homebuyers, Do-it-yourself, Fee-for-service, Savings & Rebates

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