The future of Real Estate: Are Real Estate Agents becoming obsolete?

What's up you guys? It's Graham here. So, I want to talk about today the future of being a real estate agent and if this is one day going to become an industry that's gonna be obsolete, somewhat like the travel agent.

Now, I'm mentioning this because a few things have come out in the last few years to try to eliminate the real estate agent. Things like Zillow instant offers, which is basically the Carmack's of buying real estate. We're also seeing websites like open listings.com, which really try to cut out the real estate agent as much as possible to save the buyer on commission. We're also seeing a lot of real estate agents just completely reduce their commission next to nothing just because they're desperate for business.

So, what type of industry is this, and is the real estate agent gonna be around for the long term? So let's talk about this. For those that don't know, I am both a real estate agent and a real estate investor. How I made most of my money is working as a real estate agent. Now, the real estate investor in me would love a streamlined process between buying and selling, where I can save as much money as possible.

See, when I'm buying a property, I really wish that everyone could just cut the crap. We negotiate for a few minutes, shake hands on the deal, close it, and we both walk away a winner. But let's be real here; realistically, that is rarely ever gonna happen. Honestly, I think a lot of the programs that have rolled out so far that try to eliminate and replace the real estate agent just won't be successful long term.

I truly see the real estate agent career in general being something that's gonna thrive for a very long time. The reason why is because real estate is bought and sold with emotion. It's not necessarily always a logical decision to buy or sell something. A lot of it is emotional. It's something that you're spending a lot of time on; it's something that you're going to be spending a lot of time in. It's gonna become your home; it's gonna become almost an extension of you.

For that reason, I feel like most people, I'd say the majority of people, need a bit of a human connection when buying a property. Think about it too; when you're buying a house, it's often a very emotionally driven decision. It's often going to be one of the most expensive purchases someone makes in their lifetime, and it's gonna be a place where they come home every night. It's gonna be a place where they raise a family; it's gonna be a place where they create a lot of memories.

Often times, it's very difficult to put a price tag on those experiences. Even as a seller, oftentimes your home is an extension of you. It's some place where you've spent a ton of money on, a ton of time on; you've made it your own. Technology is gonna have a really hard time replacing the human connection of emotion.

And I'll say, half of what I do as a real estate agent is pretty much just act like a therapist. I'm someone that people bounce ideas off of. People rely on me for my experience and my opinions about whether or not a property is a good deal or what they should do to make the property exactly how they want. I'm also someone that can trust for advice and techniques for getting the highest price possible as a seller or the lowest price possible for a buyer.

It's really important as a real estate agent to objectively look at how someone is feeling and then be able to get them exactly what they want. So let's take the website open listings.com as an example. They pretty much have an in-house team of agents that handle every step of the process. It's almost like the assembly line of real estate agents.

If you want to see a home in a certain area, they have an agent there that's dedicated to just showing homes in that one area. Then when you're ready to make an offer, you have another agent that just does offers. That's all they focus on. Then, every step of the process, you have a different agent handling a different aspect of your deal. This, for them, promotes efficiency.

Because they promote efficiency and they have one person doing each part of the deal a lot quicker, they're able to cut back on their commission. Now, the problem I see here is that you're basically relying on a complete stranger to show you a home, and you have no idea if this person really has your best interests at heart or what they really know about a deal.

You're also relying on a complete stranger to basically handle one of the most expensive purchases you're gonna make in your lifetime. You're really going into it without knowing how competent the agent is on the other side and if they can really negotiate the best deal for you. Even though you might save 8 grand, the saving 8 grand might mean you might overpay on a home by 20 grand.

A good real estate agent will always be able to either save you the money on the deal or get you the deal in the first place and generally pay for themselves. So, the buyer that wants to work with a site like that to save six grand is twofold: one, it's not the buyer I want to work with, and, two, it's a buyer that doesn't understand the value that a real estate agent brings.

The thing is, as a real estate agent, you need to effectively communicate your value and why you're worth your pay. If you can't do this, learn this as soon as possible; otherwise, you're gonna be an agent that's gonna lose a lot of business to websites like open listings and Zillow. Think about it; everything you use, you understand the value of it. You understand the value of using an iPhone; you understand the value of watching this on YouTube; you understand the value of the car you drive and the place you live in.

You understand the value of all of that. If you don't get the value, you're not gonna use it. It's the same thing with any business, and it's the same thing with working as a real estate agent. If you can't show someone your value, you're gonna lose business. If people are seeing more value in saving a few thousand dollars than working with you as a real estate agent, then this is something you really need to work on.

Your value as a real estate agent needs to be that you will understand the human connection. You understand that it's an emotionally driven decision, and you need to learn to use that to benefit your client to get them exactly what they want at the best price possible. The thing is, an agent can easily make a 10% difference in a selling price for better or for worse just by their techniques, their photographs, their style, the communication. These things are really important.

Using a bad agent can end up costing the seller a lot of money, or it could cost a buyer a lot of money because you're gonna end up overpaying for the property. I've seen these like random no-name, fly-by-night real estate agents just completely kill deals because they had no idea what they're doing. Then, the sellers are wondering afterwards, "Why did my property sell?" where the buyers are wondering, "Hmm, maybe I should have made a better offer on this place, no wonder I lost it."

Sometimes, these mistakes are as simple as mispricing, bad pictures, not being able to show it, maybe a bad description, not picking up their phone—little things like this make a huge difference. Sometimes, clients are a little bit too logical and they forget that this is a place you're gonna be living in for 20 years, that they're gonna be raising a family in. It's important to bring them back down and realize that this is something that's really personal and not always about the numbers.

Understanding a person's wants and needs and emotional ups and downs really gives us the advantage that technology can never really replace. It's less about being persuasive and more about just giving someone an opinion, letting them see all sides, putting things in perspective, and letting them come to their own conclusion.

So, in the end, are websites like this really going to replace the real estate agent? My thought is, I highly doubt it. It really just comes down to communicating your value and showing people why you're worth what you're paying. If you can do that, you're not gonna have any problem whatsoever, because the truth is a really good real estate agent is gonna save more money than what they charge.

Let me give you a recent example here: last month, I listed a home for 1 million nine hundred and fifty thousand dollars. I ended up selling it three days later for two million one hundred and fifty thousand dollars. That is what a good agent can achieve. So even though my commission was somewhere around fifty thousand dollars, I just got the seller an extra one hundred and fifty thousand dollars from the selling price. That's a price that's definitely worth it.

If you would pay an extra fifty thousand dollars to make an extra one hundred and fifty thousand dollars, that's a no-brainer. That’s the value you have to communicate to all of your clients. Now, a bad agent might only charge twenty-five thousand dollars, but if they get you one million nine hundred and fifty thousand dollars for it instead of two million one hundred and fifty thousand dollars for it, you just lost money.

So, that's the difference between a bad agent and what a good agent can do. With that, the people that are selling your home on Zillow instant offers, which is basically, like I said, the Carmack's of real estate, where they cut out all the commissions. You show them a property and they give you a price for it.

The people that are doing that, first of all, are people I just don't want to work with, and also people that are willing to sacrifice so much money for all the profit that Zillow needs to make. Usually, these people are the types that just want no hassle whatsoever. They want zero human interaction, zero showing, zero hassle. Frankly, as a real estate agent, that just comes with the territory.

Honestly, working with a real estate agent will net you more money, but sure, you're gonna have to pick up your phone every now and then, you're gonna have to deal with people every now and then, you're gonna have a little bit of hassle, but that has the most generally worth a lot of money for most people.

So, long story short, the type of person who's willing to work with a Zillow instant offer is not the type of person that I want to work with. So, something's up—will this take away from our business? I think hardly. I think the love impact that these websites are gonna make is gonna be so minimal.

I think any agent worth their salt, who's able to communicate what they offer to a client, isn't gonna have any problem and isn't gonna lose any business from this. Plus, I think that someone has to be in a very unique situation to want to take a Zillow instant offer at a price that's well below if the home is worth.

So, I honestly believe from here on out becoming a real estate agent will be a thriving career, and I can't see anything really impacting that in the foreseeable future. As always, you guys, thank you so much for watching. I really appreciate it. If you haven't already, make sure to click the subscribe button and smash that notification bell so you're aware when I upload videos. You don't miss out on anything.

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