Editor’s note: The following is a guest essay. Inman News is exploring what the next decade may hold for real estate professionals in "2020 Re-Envision: The Future of Real Estate Brokerage," an editorial project that peers into the future of the residential real estate brokerage industry.
By ANDY SALO
What will real estate be like in 2020? The simple answer: Nothing like it is today.
Over the next 10 years, I believe most real estate agents are going to have to radically change the way they do business. Specifically, listing agents will likely disappear. They will be a convenience for the elite, not a requirement for the average homeowner.
Buyer’s agents will still be needed, but in a different business model. Generation Y will make all of this happen.
By 2020, Generation Y, also known as Millennials, will be all grown up. Gen Yers will likely turn from the somewhat self-indulgent, please-give-me-praise generation to the generation that is more responsible, adult-like, and indeed will have a lot more purchasing power and decision-making ability than today.
What will that mean for real estate?
Generation Y is the first generation that has never known a world without the Internet. Most have been connected since they were in their teens. In 2020, most will have had two decades of being online. Being online your whole adult life means you are very comfortable with searching, communicating, transacting and every other online activity done today.
Imagine that 10 years from now there are 100 times more online real estate-related capabilities than there are today. Searching for a new home, posting your home online for sale, getting detailed competitive market analyses from multiple sources, receiving online offers, negotiating online, and more.
Don’t believe it can happen? There is a Web site that lets you post your Web site for sale, along with all the details about it (akin to a seller’s disclosure). Buyers ask questions of the seller (due diligence), make bids, and ultimately buy the Web site in a similar manner to an eBay auction. …CONTINUED
Could that happen to real estate transactions? Absolutely. Things are changing that fast.
Ten years ago, Facebook didn’t exist. YouTube didn’t exist. Twitter, Linkedin, Zillow, Trulia, Wikipedia — name brands that are instantly recognizable today, yet did not exist 10 years ago.
What does this mean for real estate agents? We better be thinking about how we will matter to people going forward. If the multiple listing service still exists in 2020, then I believe most listing agents will be posting listings in the MLS for a flat fee, like for-sale-by-owner sites do today.
Educated, do-it-yourself buyers will be negotiating directly with sellers and will look to a local real estate expert for advice and contract assistance. Any agent who believes the 6 percent commission will survive in 2020 is fooling herself. Just take a look at what the Internet has done to travel agents, stock brokers, literary agents, and other middlemen.
Generation Y is the train coming down the track. If real estate agents don’t think about how to add value in the dramatically different world where Gen Yers are the country’s decision-making leaders, I’m afraid the agents of today will be out of business.
What can you do now?
Embrace change. Learn. Do everything technologically that you can. Online real estate brokerages are leading the way. It’s time to join them in thinking out of the box.
Andy Salo is founder and CEO of YigDigs.com, which offers to assist for-sale-by-owner sellers, and sellers who want only limited assistance from a real estate agent.
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