Are brokers of real estate on the road of the Dodo?
Real estate brokers have confronted in the past year with their considerable part of the challenges – from legal threats and changes in business practice to a slow housing market and the brute pace of technological development. With all these changes and challenges, many wonder if we are in the abyss of a Brokerage -Massa -Extincence event. Panel member Craig McClelland, James Dwiggins, Linda O Housingwire’s The Gathering.
Although the panel member had opposite views on many issues, they agreed that two of the biggest threats are confronted with brokers, profit margins and AI technology shrink. Despite these threats, no one thought that real estate agents or agents of real estate would go fast.
“I think the broker remains in the center of the transaction”, Dwiggins, the co-CEO of NexThomesaid. “So much of what we are doing today is being a therapist, helping the customer by working a very emotional and rare transaction – they will want someone to lead them through that process. I am not only going to use AI to sell my house or buy a house.”
Nevertheless, Dwiggins is the feeling that the role of the agent in the transaction will evolve in the long term. The role of the agent is not the only thing that evolves Dwiggins, he also believes how brokers will earn money even over time.
“Tired services are where things go,” said Dwiggins.
However, the path to success with support services is not wide open, such as major players in the industry such as Rocket And Zillow It has generally announced that they want to make end-to-end transaction platforms.
“If you look at the rocket investor deck on it Redfin Acquisition, they want to take $ 40,000 in consumers costs and that lowered to $ 20,000, “said Dwiggins.” People must have double incomes if they want to pay something, so that is tempting, but where do those savings come from? Broker compensation. “
In a world where agents earn less money per transaction, Dwiggins believes that brokers must either share more of the committee with the agent or perhaps even go to a 100% committee model.
“Brokers will have to earn that money somewhere else,” said Dwiggins. “I don’t think this will happen tomorrow, but somewhere in the next three to five years you will see consolidation, not only among brokers, but also under services.”
O’Koniewski, the CEO of Leading Edge Real EstateHad another take, convincing that a company could still succeed by concentrating on what it does best.
“I am the embodiment of failure when it comes to additional services,” she said. “I had a number of JVs and they are not going anywhere and an insurance company that did nothing and then I received great advice from my lawyer who said:” Linda, you are good at selling real estate, concentrate on what you are good at. ”
Regardless of what strategy a company chooses to pursue, McClelland believes that brokers should concentrate on profitability and not just growth.
“You can’t take growth and cash it in at the bank if there is no profit,” the president of Local real estate said. “I think there is a great misconception that growth is the most important thing that we have to do. I believe we have to build broker companies that are profitable and have income lines that are logical and sustainable.”
In contrast to Dwiggins, McClelland does not believe that agents will remain the center of the transaction, because he sees too many other parts of the transaction compete for space.
AI agents?
Although McClelland sees a shift in the position of the agent in a transaction, he does not believe that agents will be replaced by AI. However, he believes that agents and brokers who do not use AI will have a similar process as dinosaurs.
“Zillow and Rocket force us to develop our companies, but if we have to concentrate on our companies,” he said. “If we look at our companies at our profit and loss declarations, the top two lines are facilities and people and AI can really influence the second line of people – how are you going to create efficiency with AI?”
Dwiggins agrees that brokers must concentrate on the use of AI to increase efficiency, but he does admit that skills of AI technology can make it difficult for new agents to break into the company.
“I recently saw some things with AI who surprised my mind,” said Dwiggins. “There is no scenario in which the new licensee will be able to do the space to do compositions or write an offer with the best conditions to the same extent AI, but from a broker’s position I do not think that there is a holy cow of what AI can do. I think they should investigate everything and how adoption could help with efficiency.”
Although no one believes that brokers and agents will die out, they believe that companies such as Zillow and Rocket will become the most influential and the biggest voices of industry in the coming decade.
