Editor’s note: This two-part story includes highlights from an Inman News Special Report, “Controlling the real estate transaction: Who’s in charge?” The full 40-page report is available free to Inman News members. To become a member, visit the member sign-up page.
(See Part 2: Intense debate over bundled real estate services.)
It used to be a simple question: “Who controls the real estate transaction?” And a simple answer: “The real estate agents and brokers, of course.”
The question and answer are more complex now, as new business models defy tradition and define new paradigms in real estate services and rates. More players are vying for first-contact with consumers and for guiding consumers through the real estate transaction.
Agents and brokers are still the primary controllers in real estate transactions, according to an informal Inman News survey conducted in June. But lenders, mortgage brokers and online listing and lead-generation sites, among others, also are considered primary players, according to the survey of 195 people.
About 78 percent of the respondents said real estate agents or brokers control the real estate transaction; 8 percent said lenders; 6 percent said mortgage brokers; 4 percent said online listings or lead generation sites; and the remainder said others control the transaction or had other comments. About 11 percent of survey participants said in their write-in comments that home buyers and sellers are the core drivers in real estate transactions.
“The Realtor’s job is to help the consumer get what he or she wants. Realtors who won’t listen are not worth working with,” said one survey respondent.
Why are agents so in control? About 34 percent of respondents said that agents maintain the control because they spend more one-on-one time with consumers and garner their trust. About 29 percent of respondents said agents maintain this control because they do most of the work in the transaction and create the most value.
“The agent acts as central facilitator to the entire transaction,” a survey participant responded.
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About 40.5 percent of respondents said that real estate agents’ brokers don’t have any control over the real estate transaction, while about 42.1 percent said they do have some control. Of those who responded that brokers don’t have any control, most said it is due to brokers’ lack of contact with consumers.
Also, 46 percent of participants said technology has changed who controls the real estate transaction, while about 36 percent said it hasn’t changed the control of the transaction. The remainder said they were not sure or had other comments.
“(Technology) is moving more control to the consumer,” said one survey participant.
About 20 percent of survey participants said Internet companies will control the real estate transaction in the future, while 56 percent said that will not happen. The remainder said they weren’t sure or had other comments. And about 36 percent of survey participants said bundled-service business models will change the point-of-purchase debate, 31 percent said it won’t, and the remainder were either not sure or had other comments.
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