Published May 2005

Internet has changed
role of real estate agent

In the study of evolution, we learn that adaptation is everything. The random spin of chromosomes at conception of all living beings sometimes spits out creatures with genetic abnormalities that give them a survival advantage. Because of those advantages, the likelihood is that those innate skills or attributes will be duplicated in their progeny and eventually become a dominant feature in the gene pool.

Sometimes, dramatic climate change moves faster than genetic mutation and creatures become extinct while others better suited to the new environment flourish.

Examining the typical day of a real estate agent through an evolutionary lens, we observe that as recently as the early 1990s a typical day would involve taking calls in the office as the rotating “floor agent,” pushing out half a dozen cold calls of his or her own, and touring clients through homes or office space. Often, this was enough to bring value to clients and still make it home for dinner.

Such an approach to the business would be suicide in today’s real estate market, however, as the role and function of real estate agents has changed due to a climate change of sorts. The primary force of change is that access to information on pricing and availability, once exclusively under a real estate agent’s control, has become readily available to almost anyone at the click of a mouse. The Internet has changed the real estate business forever.

Some of the clearinghouses for residential and commercial real estate listings and sales are still the domain of authorized Realtor members. The MLS (Multiple Listing Service) for residential properties and CBA (Commercial Brokers Association) for commercial properties are examples of member-only access marketplaces for Realtors to view listings and product availability offered by other real estate agents.

But today, an eager residential buyer or seller can find comparable sales information, find out which agents are most active, find properties for sale and generally do a great deal of research prior to ever contacting a real estate agent. Consequently, by the time a prospective buyer or seller picks up the phone to call an agent, they probably know what property they want and what their price expectations are. Also, they probably have taken a virtual tour of the property and even seen an online picture of the listing agent.

What’s interesting about this evolution is that it has changed the emphasis of skill sets it takes to survive as a real estate agent. In fact, an agent’s ability to measure motivation in a buyer or seller is becoming perhaps the key to consummating a sale. After all, if market data is already available to the buyer or seller before they make contact with an agent, the party’s respective motivation levels are the only remaining variable.

Measuring motivation, however, is not something that can be learned in a book. It’s an innate skill to some degree. It’s reading body language. It’s asking the right questions. It’s understanding human behavior. It’s timing. It’s knowing who will move next and how far they might go in the negotiating process. It’s more about people skills than market knowledge.

This has made the experience of using a real estate agent feel much more like working with a consultant than a traditional agent. To backfill the technical side and bring value in other ways, agents have become fluent in understanding lending markets, the escrow process, taxes and other aspects of carrying a deal to closing. They become the tour guide of sorts to consummating a sale or lease once their motivation-measuring skills have gotten the parties to commit.

Evolutionary change is slow at times and then can be sudden. The rapid climate change brought about by the Internet has created an environment in which real estate agents either adapt quickly or face extinction. Fortunately, human beings can adapt to their environment on the fly. But they must take the first step and recognize the threat and, therefore, the need for adaptation. From there, they have only themselves to blame if they fail to develop the skills necessary for survival.

Tom Hoban is CEO of Everett-based Coast Real Estate Services, a property management and real estate advisory company. He can be reached by calling 425-339-3638 or sending e-mail to tomhoban@coastmgt.com.

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