Venture capital is pouring into real estate, looking for the next big disruption:
http://www.wsj.com/articles/real-estate-techs-two-edged-boom-1445212395
An excerpt:
Many real-estate-tech companies that got into the business early hoped to knock out brokers in both residential and commercial real estate, an ill-fated strategy. The brokerage business has been surprisingly resilient, panelists said.
That is partly because tech firms haven’t been able to replicate the hand-holding that buyers and renters need when deciding where to live or work. “The people who are thinking this is another one of those transactions with a middleman that needs to go away are foolish,” Mr. Svrluga said. “Love your agent.”
But that doesn’t mean the brokerage business isn’t going to change. Panelists predicted that technology and data tools will radically alter the way brokers deal with customers.
“The reason there’s a graveyard of technology companies in real estate is they try to disrupt just to disrupt,” said Robert Reffkin, chief executive of Compass, a technology-driven real-estate brokerage. “Just make it better.”
http://www.wsj.com/articles/real-estate-techs-two-edged-boom-1445212395
The reason agents are still around is 2-fold…
1. People like hand holding by a knowledgeable agent. Quality representation can mean the difference of 10s of 1000s of dollars or a deal not happening at all. Someone who puts you at an advantage during the deal is a worthwhile asset.
2. There’s many people that don’t use the internet. GenXers and older are the last generations to not grow up with the internet. This is a huge group of people. As the ones that grew up with the internet get older and start buying houses the power of online real estate businesses will grow.
PS I looked at zillow yesterday and I couldnt believe how many more listings they had over the MLS. This is bad for traditional MLS as a business.
Our local MLS doesn’t find any need to keep up with Zillow either. They finally came up with a consumer version of the MLS a while back – see how it compares to Z:
https://www.sandicormls.com/
Who would have thunk it that the death of the MLS will be from agents following the consumers to Zillow?