When discussing the future of real estate, it is curious how often real estate agents are compared with travel agents.
“Is it just a matter of time before real estate agents go the way of travel agents?” Looking back over the last few years, the answer to this question, surprisingly, is yes. Travel agents are experiencing a rebound, and the reason why offers some insight into why real estate agents are here to stay.
Despite (or maybe because of) online tools such as Expedia and Orbitz, travel agents are back, at least according to recent stories in The New York Times, USA Today and Time magazine, among others.
Why? Because travel agents know more about travel than you do. They have more connections than you; they know about special deals that you don’t; and they have the experience to help you plan your trip. And according to U.S. News, even with their 10-12 percent commission, the overall cost of going with a travel agent often comes out lower than it would if you booked it yourself.
It seems the growing proliferation of electronic information has affected travel agents in two opposing ways. Now that we all have direct access to the airlines, we no longer need travel agents as intermediaries. But having an expert who knows how to dig through all that information to get you the best trip, at the best price, is more valuable than ever.
Looking at how the Internet has affected other industries, the story is the same. In theory, we now have the online tools to disintermediate bookstores, bank tellers, financial advisers and doctors.
The first two involve simple enough transactions, as most people are comfortable buying their books on Amazon and banking online. In the case of the last two, Yahoo Finance and WebMD are great, but when it comes to managing your wealth or your health, there is way too much at stake not to go with an expert.
What does this mean for real estate agents? Buying or selling a home is one of the most expensive, stressful and time-consuming decisions that a person can make. It also involves many intermediate steps, each of which has the potential to go wrong and send you back to square one. And even once you’ve finished the negotiations, arranged the financing and signed stacks of documents, many people spend months deathly afraid that they may have made the wrong choice.
Sure, with the Internet we can disintermediate agents now. But with over 90 percent of housing transactions being conducted by an agent, only a small minority of people actually think it is a smart idea.
The Internet now has a two-decade track record. And when it comes to functions that help people make difficult and important decisions, more information only increases the need for expert help. If that’s true for travel agents, you better believe it’s true for real estate agents.
Max Galka is cofounder of Revaluate, a member of Code for America’s BetaNYC Brigade, and participant of the New York City Open Data Working Group.