There’s a lot of talk about disruption in real estate.
Venture capital firms have invested $12 billion in our industry last year. They gamble on technology companies who believe they can replace agents and pocket hundreds of millions in commissions.
There’s good reason to be scared. Many well-known companies got replaced by technology …
The hotel industry was disrupted by Airbnb, the taxi industry by Uber and Lyft. Netflix destroyed Blockbuster and Amazon wiped out Sears.
Will we face the fate of the travel agent and become irrelevant?
Not according to Adam Contos. In his recent podcast he shared 5 questions you should answer before you freak out about losing your business to an app.
You can listen to the full episode here. My summary follows.
5 Reasons Why Agents Won’t Be Replaced by an App
1. The real estate transaction is not frequent.
Frequent transactions like hiring an Uber, renting a movie from Netflix or booking a flight on Expedia are prone to automation.
Homeowners only sell every 7 to 10 years.
2. The cost of a home purchase is very big.
Real estate is the largest investment most people ever make, and it often involves borrowing money from a lender.
You probably don’t worry about a small online transaction like buying an airplane ticket. But, would you be ready to close a $300,000 purchase on the Internet?
3. A real estate transaction involves a lot of risk.
We all heard horror stories of real estate transactions gone wrong. There’s a lot more risk in buying or selling a home than renting a movie or booking a ride on Uber.
People are worried about losing their life-savings. That’s why they are looking for professional help.
4. Real estate is complicated.
There are lots of rules and regulations that change frequently. And, many different players are involved in every home purchase.
This would be very hard to do without an experienced Realtor.
5. We are dealing with a unique product.
Every house is unique, every transaction is different. Unlike booking a flight or renting a Netflix movie, there’s no simple, cookie-cutter solution to a real estate transaction.
Again, it would be hard to do without an experienced agent.
Clients Pay for Peace of Mind
Here’s an example why clients pay for competent advice:
Imagine you need a knee replacement – which is unique, complicated, expensive, involves a lot of risk, and certainly is not frequent.
Would you care who’s doing the surgery? Or, would you click a button on an app and schedule the procedure?
Same with a home purchase or sale.
Your clients hire you for your experience. They want to make sure that the largest financial transaction of their life is handled correctly, so they don’t lose any money or get sued.
You Must Stay Relevant to Beat the Disruptors!
While it is unlikely that Realtors will be replaced by an app, not everyone will make it in the face of competition.
Experience and skills matter if you want to stay relevant and beat the disruptors.
If you are new to the business, you must have the backing of an experienced team leader or broker. If you’ve been around for a while you need to learn and improve all the time.
The body-shop style mega brokerages who put agent count over productivity won’t be able to provide the support you need.
Our top producing boutique brokerage can! Click here to schedule a confidential meeting!