There was a time when people would not think of buying or selling a home without the help of a real estate broker. Between brokers and their agents, both buyers and sellers got the help they needed navigating what is often a complex transaction. But has technology changed things? Are real estate brokers still necessary in our tech-driven world?
That depends on how you define ‘necessary’. In a strictly legal sense, real estate brokers have never been necessary. Buyers and sellers have always been free to transact business without involving brokers, agents, or even lawyers. We haven’t done so largely because of the risks involved. Technology being what it is though, more people are asking whether they should forgo the broker thing.
1. Marketing Homes for Sale
CityHome Collective is a Salt Lake City real estate brokerage that also offers interior design services. They say the strength of the real estate broker has traditionally been marketing. Brokers and agents are as much marketers as they are real estate experts.
Prior to the internet, marketing a home involved newspaper advertising and a lot of face-to-face sales consultations. Sellers couldn’t afford to advertise in the newspaper, so the best they could do was put a ‘for sale by owner’ sign out in the yard.
Technology makes modern marketing a lot cheaper and easier. Sellers can list their homes on multiple websites in a matter of hours. Compared to newspaper advertising, you get a whole lot more for a whole lot less.
2. Shopping for Houses
Technology has helped the other side of the equation as well. Buyers no longer have to wait on calls from their real estate agents. They can browse online listings to their heart’s content. CityHome Collective says that some clients are even taking the lead these days. They find the houses they want to see, then call their agents to make arrangements.
In this particular arena, the real estate broker is still indispensable. Online listings do not reveal all the details. They also don’t tell prospective buyers what questions to ask. It is too easy for buyers to approach a potential deal without having all the information.
3. Negotiating Offers
Technology is capable of streamlining the real estate process quite a bit. However, brokers and agents are still indispensable when it’s time to get down to brass tacks. They are an indispensable resource for negotiating offers.
For example, almost all offers come with contingencies. Potential buyers expect certain things, like ensuring that certain maintenance issues are addressed. Offers can also be contingent on mortgage approval or the buyer selling another house. Trying to navigate contingencies without an intimate knowledge of what you’re doing could prove disastrous.
Likewise, there is an emerging trend to sell one’s home to an investment firm with no questions asked. There are even mobile apps springing up around this concept. Selling to an investment firm may be quick and hassle-free, but it almost always means taking a lower price than working through a traditional real estate broker.
4. Money Well Spent
Giving up between five and six percent of the sales revenue to cover agent commissions can be a painful pill to swallow. But when you understand all of the advantages of having a broker in your corner, it is money well spent.
Also note that you can negotiate commissions. There is no legal requirement to pay brokers or agents a set amount. Regardless of the eventual commission rate, there are benefits to using a real estate broker. Technology can do a lot of great things, but it cannot replace human beings entirely.