Is Technology Going To Replace Agents?

SUMMARY

The question of how technology and the internet is impacting real estate is a hot question that has a lot of agents, especially new agents, asking if the real estate agent is making Realtors obsolete.  This question is especially controversial right now because of the launch of Zillow’s Instant Offers and the controversial Stop Zillow movement. (http://StopZillow.com)

I love technology and the internet.  They are amazing tools for our business.  And the answer to the tech vs Realtors question is: NO.

Here is why Zillow and the Internet isn’t going to replace agents…

Don’t think they aren’t trying. RICH BARTON, founder of Zillow, was also the founder of Expedia.com who were leaders in taking out the travel agent industry all the time claiming that Expedia was friendly to travel agents.  So be clear about this, tech companies can win if Realtors do nothing to stop it.  And if they win…the biggest losers are our clients…homeowners, buyers & Sellers because they will be making huge financial decisions with no skilled representation.

Here are the two dominant reasons why technology will not replace skilled, ethical, professional agents:

1. Because Selling or buying a house isn’t like any other online sales transaction.

Buying and selling a $250,000 house is not like booking a flight, renting a car, or getting a ride to the airport.  It is a sum transaction.  You know exactly what you are getting. whether a human or a website facilitates the transaction: Uber (a ride), Expedia (a hotel etc.), Netflix (a movie).  It’s simple and no surprises.

A house is totally different.  There is deep complexity and many facets that make the transaction and the acquisition of a piece of real estate a big dial.  The financial repercussions are huge when someone closes a real estate deal and in their life, everything changes because they are moving.

2. Because we are agents, which means we represent clients as a FIDUCIARY.

Car salesman, insurance salesman, retail salesperson, and almost all other sales…represent the company, the manufacturer, the store…ONLY.

Their job is to sell you on a product or service and make money off you for the company.  Period.  Representing you is not even a consideration.

An agent’s job is to serve the best interest, protect, guide, help the client first and foremost.  Your expertise in that process has tremendous value to a client and can be worth tens of thousands of dollars to them or more.  And it can save them tons of grief and regret from making a bad decision. The key is that you as an agent have to know what you are doing and why you are doing it.  If you’re just after a commission, you are no better for the client than an online technology portal…and maybe worse.
 

FULL TRANSCRIPT

Hey there, it’s Kevin Ward. I am shooting this video because the talk about Zillow’s instant offers, and I shot a video on that last week, and there’s just been this furor of agents going like, “Oh, no,” and especially new agents, going like, “Oh, no, should I even get in real estate? Is it too late? Is real estate dead? Is technology going to completely replace real estate?”

That kind of conversation is not new. It’s been happening for years now. That is, is technology going to make real estate agents obsolete? Is technology going to replace real estate agents and basically real estate agents are not going to be needed anymore? That real estate agents are just overpaid, whatever. And I wanted to make this video to answer those specific questions.

Now, let me say first, that I love technology. I love the internet. I love the websites, the ability as a marketing tool, as a tool for generating business, as a way to help people get educated and have information. I think technology and the internet and all of that, internet portals, I think all of that is awesome. Because it delivers value to people.

So people that are opposed to, like, a particular website or a particular business model, that doesn’t mean that technology is bad or shouldn’t be supported or, you know, it’s the enemy. Look, anybody that thinks technology’s the enemy is an idiot. It’s just, this is the way things are going. So you simply have to learn to adjust, to adapt, and to fit in, to find your place in that world.

So the question is, what is the place that real estate agents are going to hold in the future when you look at what’s happening on the website? On the internet. What’s happening with websites and web portals like Zillow, like Open Door, and so many others that are out there, that the conversation’s been going on. Realtors are going to be a thing of the past. Just like Uber has, you know, crushed the taxi industry. Just like Expedia crushed the travel agent industry online. The online reservation and portals where you can book all your own hotel and all of that.

It’s not going to happen. Let me tell you why the internet is not going to replace real estate agents and why portals like Zillow will not replace real estate agents. Now, don’t think they’re not trying. When you understand that Rich Barton, who is the founder of Zillow, was also the founder of Expedia, and Expedia was one of the leaders in almost literally annihilating the travel agent industry because people were now able to get the same results and do it on their own in a fraction of the time. It was easier. People think it saved money. You know, whatever it was, it was. And through all of that, Expedia and Priceline and Travelocity, all of them claimed to be not enemies of travel agents. “We’re not out to destroy travel agents. We’re not out to get rid of them.” And so forth.

And yet, their model was designed to say, “We want all the customers. We want all the eyeballs coming to us. We want to make a platform that’s easier for them to get results and easier for them to get what they want and that we make money.” And it worked great.

That is the same leadership that they have now in places like Zillow. So you have to understand that tech companies in the real estate world, in the real estate industry, can win if we don’t do anything. I believe if they win, that obviously real estate agents are going to be losers, but sometimes if an industry and the way we do things is obsolete then you’re going to lose. It’s just the way it goes.

The good news is, what we do as real estate professionals, is not obsolete. Now, pay attention here, and I want you to stick with me through this video. Because this is really, what I’m about to share with you is, I’m going to share with you two reasons why real estate agents are not and are never going to be obsolete. And why the real estate industry is not anything like the travel agent industry or the Uberization of the taxi industry and transportation industry and all of that. Those are totally two different animals. And so I’m going to talk about that. I’m going to talk about why our industry, real estate agents, is not threatened by technology.

Now, are there threats to our industry? Yes. And I think the biggest threat to our industry is incompetent real estate agents. It’s amateur agents, who they, one, they should be scared. Because technology already makes you obsolete. You’ve been obsolete for 100 years, you just didn’t know it if you’re an amateur, incompetent real estate agent who’s just trying to get a commission check.

So, I believe that for real estate agents, the most important thing for you to do is become a master of what you do as a real estate agent. To become great at delivering great results in serving your clients better than anyone else. What I want to talk about is why that service that you can provide is necessary today, and it will be necessary in the future.

If we don’t do our work, if we don’t raise the bar of real estate agents and do great work for clients and do a great job of representing them, technology could replace us, and if that happens, if technology wins, and in terms of making real estate agents obsolete, we lose, but also the big losers are our clients. The homeowners. The buyers. And the sellers. And here’s why.

Two reasons why technology can never replace a great real estate agent. Number one, is because selling or buying a house is not like any other sales transaction on the planet. Now, think about it. When you talk about online travel agencies. Totally different animal than somebody moving.

Whenever you are renting a hotel room or you’re booking a vacation, you go on to Expedia and you’re going to book a vacation, right? You book the vacation. You go through the portal. You find the hotel you want. You find the airline. The flights you want. You find the cars you want. You compare the best deals. You look at all the locations and all that. And then you book it.

But when you book it, you’re flying on the same airplane, the same flight, as if, whether a travel agent did it or the internet did it. If you did it on Expedia or you had an agent do it for you, you’re still on the same plane. You’re still staying in the same hotel. You’re still driving the same rental car. Nothing changes, and you know exactly what you’re going to get once you book it. It’s just a matter of you’re doing it yourself.

If you’re getting a ride, and I’m getting a ride from my house to the airport. Whether I get a taxi or I get an Uber, it’s the same deal. I’m going to ride in a car with a professional, hopefully. I’m going to ride in a car with a professional who’s going to take me to a location and drop me off and it’s going to cost me a certain amount of money. But at the end of the day, nothing’s changed in my life. I just need to get a ride. That’s all it is.

If it’s a movie, how Blockbuster was completely crushed because they didn’t adjust to technology and to the internet and Netflix, basically, took over and replaced them. Well, it’s just a movie. And whether I go to a store and buy a DVD or I’m able to log in on my internet and watch the movie there, it’s still just the same. It’s the same movie.

But when you buy a house, someone buys a house, or someone sells a house, they’re moving. And that transaction, and that life transition, is greater than anything else you do in your life. Even if were to buy a car online. It’s still a car. And what’s going to change in your life when you buy a car? Virtually nothing.

But when somebody moves, when they buy or sell a quarter of a million dollar asset, or a three million dollar asset, or a $750,000 asset, whatever price range home you’re talking about, it’s not just the price of the asset, it’s the complexity of the transaction. It’s the decisions that have to be made along the way in terms of repairs, in terms of who’s going to pay for what, in terms of things that you need to know about. About the use of the property. And deed restrictions. And zoning restrictions. And homeowner association restrictions. And costs. And fees. And there’s just so much complexity in a real estate transaction, that having a skilled professional, who knows how to educate, and lead, and guide is so critical.

Because when somebody moves, everything in their life changes. When they sell a house, move, buy a new house, everything changes. How you go to work changes. Where you sleep changes. Where you shop changes. Where your kids go to school. Where you worship. Where you exercise. Everything changes. It’s literally a life transition. Unlike virtually any other type of online sales transaction, selling or buying a house is a life transition, not simply a purchase.

For that reason, having a skilled professional, that can guide you through the complexities of that transaction and lead a family through that transition, who knows what they’re doing, is critically important and is a great value that you as a real estate professional can provide.

Now, if you don’t know what you’re doing, like unfortunately a lot of real estate agents out there, you’re a risk. You’re a risk to our industry. And you’re a threat to home owners. You gotta get better. You just gotta get better. You owe it to the industry, and you owe it to your clients to get better. But your job is not in danger because of technology. Because of the complexity of real estate transaction.

The second reason that our business, as real estate professionals is not in danger by technology or Zillow or anyone else is because we are agents. Now think about that for a minute. What does it mean to be an agent. Here’s what it means. It means, unlike any other sales industry, almost any other sales person out there, real estate agents as sales people don’t just sell stuff. We represent clients.

We represent buyers and sellers as our clients. Which brings in something that doesn’t exist in other sales, and that’s called a fiduciary responsibility. Now that’s not just a legal term. A fiduciary responsibility means you have a responsibility to act in the best interest of your client. So a great real estate agent is not in it to sell stuff. A great real estate agent is in the business to serve their client’s needs and their best interests and help them get the best results.

Whether your client is buying a house, or selling a house, or both, your number one responsibility is to their best interest. Now if you look at almost any other type of traditional sales, whether it’s a car salesman, an insurance salesman, a retail sales person, almost all sales, the salesperson does not represent the customer. The sales person represents the company. They represent the manufacturer. They represent the store and they represent them only. Their job is to sell you a product or service and make money off of you. That’s their job.

Their job is not to represent your best interests. Their job is to represent the interests of who they work for, which is the company. The manufacturer. The store. And so their job is to be great at selling you something and getting you to buy something, and it is essentially serving themselves to make money and serving their company, who pays them. Okay?

Now, there’s nothing wrong with that. Hopefully they sell a product or service that actually has value so they can do it ethically and feel good about it. But it’s different than real estate agents. What we do, an agent’s job, is to serve. An agent’s job is to represent a client.

See, a lot of people out there, because of the amateurism in our industry, because there’s so many agents that are out there just looking for a commission check that’s given real estate agents, frankly, a bad name, and what’s caused a lot of this is that people believe that agents are just in it for the money and that you’re overpaid and your commissions are just big expensive fees that are outdated now because we don’t need you anymore because of the internet.

But what they don’t understand, people who feel that way do not understand, is the value of a great professional, who knows what they’re doing, who knows how to lead and guide them through the transition and the transaction, the complexities of that transaction, and who’s there to represent the client and serve their best interest.

When you own that, and realize that your responsibility is to serve their best interests, to protect them, to guide them, to educate them, to lead them, and to help them get a result that’s in their best interest, you have value that technology cannot replace, and an internet portal cannot replace. Zestimates has been proof of that.

Zestimates is trying to use a computer algorithm that you can punch in a bunch of variables and it can figure out something that takes a lot more skill than just a computer algorithm, in my opinion. Now, right now they’re offering a big bounty for any agent that can create a better algorithm that allows a computer, allows an internet platform, to replace a valuable service that you deliver.

You gotta be great at the service you deliver, care about your clients, understand how important your responsibility is. That you’re not just selling houses, that you represent. And if you’re great at it, and you represent clients, your job is never, your career is never going to be threatened by technology. Technology is going to be a great tool. To serve you. To serve the people that you get the opportunity to serve. And it’s going to be a great place for you to find them and build that relationship and reach out to them and connect.

But you gotta be good. You gotta be great at delivering results. Remember, it’s not about us. It’s not about technology. It’s about the people we serve. Be the best. That’s your responsibility. And when you do that, you can always expect, “Yes.”