The National Association of Realtors recently released their 2013 Profile of Home Buyers and Sellers, which breaks down and discusses various demographics and statistics associated with recent home buyers and sellers. The most interesting statistic to me in this report is that nationally 88% of buyers and 88% of sellers, and in Texas 83% of buyers and 92% of sellers, used a real estate professional to purchase or sell their home. Quite a high percentage for an industry that has been touted to be going the way of travel agencies and newspapers! Even more interesting is that in 2001 only 69% of buyers used a real estate professional to purchase their property.
According to common lore, the advent of the internet, which has steadily risen in influence over the past 20 years, will demolish service industries and brick and mortar shops by replacing them with self-service online outlets. We’ve seen this happening with travel agencies due to discount travel websites, newspapers which are being replaced by web based news sites, and even bookstores are being replaced with online shops. It doesn’t stop there though, car dealerships have taken a hit due to the amount of information and transparency allowed by the internet.
So why is it that real estate brokerages are not seeing a similar decline? Shouldn’t consumers feel more at ease conducting their own real estate transactions now that the internet provides an abundance of information to them? In fact, nationally use of the internet in the home search rose to 92% and in Texas to 89%. So consumers are using the internet, but they are also utilizing real estate agents. Why? What is so different about real estate and travel, for instance? Both are service industries. Both have specialized agents who get paid on a commission basis depending on the property you purchase or the resort you book. So why are travel agencies quickly becoming a thing of the past, while real estate brokerages (especially small, independent firms) are rapidly picking up steam?
Well, I can’t say for certain. But I have a theory. Real estate is a not a vacation. Far from it. There are legal documents, specific market information that must be carefully paid attention to, negotiations, interactions with a variety of other professionals, and in the center of all of this, emotions and a lot of money. Someone must handle, organize, and maintain all of this information. Most buyers and sellers already have a full time job and find it overwhelming to take on another full time job buying a home or selling their current property, and all the ins and outs of such a transaction. Thus buyers and sellers turn to real estate professionals for assistance in managing this emotional and time consuming transaction, and as a resource to use in navigating the complex, and often tricky path towards home ownership, or a successful sale. There is much more to it than simply choosing a nice resort and a convenient flight itinerary. Real estate is a service industry that is just too complex to be lightly handed over to the internet, and I personally see a long and successful future for the industry.