Real Estate Repayment: Can The Traditional Model Survive?

The beginning of real estate repayment: Society as a whole has been significantly affected by the rise of the Internet. It has made the world a smaller place and changed the way we communicate and do business. It has helped companies target their customers through avenues such as Google and Yahoo, and has subsequently put the products and information consumers are looking for at their fingertips. Social networks like Myspace and Facebook have made it possible to be in contact with friends and family from all over the world through the Internet. As time passes, these changes and effects will become more widespread and startlingly evident. One of those industries that will be dramatically affected is real estate.
For decades, the real estate industry has been defined by traditional representation in which an agent charges the seller a commission to market and sell their home or represents buyers throughout the home buying process. In the past, the traditional model was the staple of the real estate profession and faced little or no opposition. This has started to change. With the dependence that society has developed on the Internet, creative minds have begun to develop new models that adapt to all types of consumers. As a result, consumers no longer have to settle for the traditional “one size fits all” model, but instead have the option of choosing the type of service that suits their real estate needs.
New Models: Consumers can now choose from a variety of real estate products and services. These services are characterized by allowing buyers or sellers to seek specific real estate assistance rather than the entire package. For sellers, real estate agents will charge a fee only for the services they provide. For example, a seller may only want to list their home on MLS (Multiple Listing Service Used by Real Estate Professionals Nationwide) for additional exposure, and require help drafting a buy and sell agreement. Listing a home and receiving assistance with a P&S will cost you hundreds of dollars instead of paying a 5% to 6% commission that would cost thousands of dollars. Buyers who are interested in finding a home on their own or who are willing to participate in initial home search work can receive a refund at closing. This model provides buyers with the professional assistance of a real estate agent and rewards them for their efforts with a portion my4walls of the commission at closing. One company that offers a refund to buyers is SharpBuyers. They are a national real estate rebate company based in Boston, Massachusetts. They have agents across the country who will help buyers find a home and give them a refund at closing. Another emerging model are real estate consultants. These are licensed real estate professionals who exclusively charge flat fees for specific services.
The brokerages that offer these innovative real estate services are called Discount Agents, Redemption Agents, and Real Estate Consultants. It can be clearly seen that all of these new models involve buyers and sellers in the home buying or selling process. Subsequently, these models are ideal for the homebuyers of tomorrow, Generation X and Y. These are tech-savvy homebuyers and aren’t afraid to dig into the process if it means they’ll save thousands of dollars. Ten years from now, Generation X will be collectively in their 30s and 30s. Many will use the traditional method to buy their first home, while others will seek out innovative brokers. How will market share shake in 2017? Only time will tell. It is anticipated that many traditional brokerages will be forced to adapt to a mixed service model, meaning that they will offer traditional and discounted services to buyers, rather than one or the other. This may be a necessary strategy if traditional brokerages want to remain competitive beyond 2020. New real estate business models allow consumers to have the best of both worlds, professional assistance, and more money in their pockets.
Real Estate and the Internet Today: In today’s world, the effect that the Internet has had on the real estate profession is extremely evident. As the popularity of the Internet initially grew, many agents worried that consumers would exclude them from the deal. To date, this has not been the case. The real estate industry has come to embrace the Internet and all the great marketing tools it has created. It has also helped real estate professionals better access listing information, recent sales history, and various statistical data reports. Leonard Nomura of Bentley Real Estate Group says he couldn’t imagine life as a broker without the Internet. The numbers are staggering. According to the National Association of Realtors, 77% of home buyers used the Internet to find their homes in 2005. This has risen steadily from the 2% of buyers who used the Internet to find their homes in 1995 and myself