In this digital, DIY age, one could be forgiven for predicting the demise of the real estate broker. But these so-called middlemen, far from going the way of the travel agent, are thriving.
Thanks to websites like Zillow and Trulia, home buyers have more information than ever at their fingertips. But agents are still in demand, with 89 percent of buyers retaining one in 2012 and only 9 percent of sellers going it alone. And while the annual mean wage is down to $51,170 from $55,000 in 2008, that’s still a jump up from $42,000 in 2003.
So why are brokers still around?
For starters, as the Washington Post points out, the post-crash housing world is more complex, with a maze of tighter lending standards, foreclosures and short sales — and buyers are wary of slogging their way through without expert help. Financing and negotiating contracts can also be hairy territory.
The Internet, far from being brokers’ death knell, has actually made them more productive, allowing agents to devote the time they would spend shuttling clients to prospective homes (now available to tour online) to helping with the closing.
“As agents over time were able to market themselves directly to the consumer, that puts the squeeze on brokers,” Lindsay Reishman, who owns his own brokerage in Washington, told the Post. “Agents are in a position where they can keep more of their money, because they’re not reliant on the brokerage to get their business.”
And while everyone loves a bargain, consumers are still suspicious of super-cheap things. Most aren’t willing to risk working with a cut-rate agent, a tendency that has kept commissions largely in place.
“I’ve been thinking seriously about saying, my commissions are going to be 8 percent, and people think, this guy is really good!” Reishman told the post. [WaPo] — Julie Strickland