Tech has cemented its footing among nearly every major industry, and real estate, although slow in its adoption of tech, is certainly one of the latest players. Tech has equipped buyers and sellers alike with the ability to seek out answers for themselves, so naturally the question has been often raised: is selling without an agent really worth it?
The rate of sellers going it alone without an agent has fluctuated in interest, particularly from 2017, and it’s not difficult to see why. True, there are promising reasons to do so, and advancements in tech have a lot to do with it, offering:
- Sellers the ability to list their own properties online in a way that previous generations never had access to, (many go for FSBO sites like houseladder.co.uk or even social platforms like Facebook). Many sellers also end up selling to a family friend or a known acquaintance.
- A wealth of information online on the processes involved, with some even taking themselves far enough along the process to point of sale.
- The opportunity to save up to 1.53% of the average agent fee, (Oct 2019 rates in the UK), and up to 3.07% in more expensive areas.
- Control of price setting, which is a big motivator as some local agents are prone to inflating valuations.
- An alternative to hiring an agent, many are turning towards the online portals such as easyProperty, Sellmyhome.co.uk, yopa, Doorsteps.co.uk, and many others. These portals, for fees ranging between £100-£1000 upfront, will provide listings on the major portals (Zoopla, Rightmove, Prime Location etc) for a set number of months, as well as valuation, floorplan and description, photos, etc.
However, although the process has never been simpler for sellers than it is now, most will still have to touch base with an agent in order to seal the deal.
Here are just a few reasons why the role of the real estate agent won’t simply disappear:
- Agents are there to help in the actual closing of deals (and renegotiations) between buyers and sellers
- Doing initial research is a significant but small portion of the entire process. Information is rampant online but can also be overwhelming. Sellers need experienced agents to help keep the process efficient, relevant, and organized - and realtors would do well to make sure their skillset is always updated in order to prove they can get clients the most value out of the experience. This is particularly the case as paperwork still poses a major problem and deterrent for sellers choosing to go it alone.
- While tech empowers sellers, it also empowers realtors who use it to improve the services they provide, maximizing efficiency. Dan Hughes, CEO of Alpha Property Insight put it this way: “the average agent spends 80% of their business day doing admin and marketing their product…[tech] allows [them] to invert that statistic so that 80% of a professional’s time is spent negotiating and closing deals and only 20% is spent on administrative tasks.” Efficient agents know how to wield predictive analytics to strategically promote listings to other agents within their own community and social media, in ways that sellers simply cannot. It also addresses one major impeding factor for sellers: time. Many are simply not able to allocate the time needed to research, market, fix-up the house, renovate where needed, check up on legal, etc.
- Agents still have great insight into the property market and client profiles, not to mention possess overall industry and negotiation experience. This is noteworthy because even if a seller receives an offer, many are not confident in their next steps. For example, what should the purchase agreement look like? Are they willing to take multiple risks? Do they have insight to balance between guarding their own interests and coming alongside the buyer to strike a deal? Agents however, are able to view the overall process and home with fresh eyes, and are able to guide sellers regarding laws governing sales of property/disclosure documents, etc.
- With over $6 billion being invested in proptech over the last 5 years, agents who keep up with the latest advancements will be as comfortable resolving issues using technology as naturally as millennials. Because proptech is so vast and relatively new, it gives agents today ample opportunity to become experts in emerging fields within the industry itself whether it be aerial footage, robotics, new construction, 3D, etc. Sellers simply won’t have the time or scope to do the same.
- Importantly, selling without an agent can actually result in loss. FSBOs in the US accounted for 11% of home sales in 2018, and while the typical sale was $200,000 for an FSBO home, agent-assisted sales yielded an average of $280,000.
Selling without an agent has its perks, certainly, but it’s clear that instead of disrupting the real estate sector, technology has in fact started to prove that both agencies and agents alike are harnessing it to improve efficiencies of existing processes. They are coming in, walking right alongside their consumers who are becoming more and more tech-smart too.
For more ways on how agents can prove value to their sellers, see our top takeaways from the Inman Connect event in New York, earlier this year.