Realtors’ Down Market Warning #1-Thomas Musil Posits: “Will Real Estate Agents Be Replaced With Virtual Deals?”

Foxbusiness.com placed this post 12/6/2007

Who is Thomas Musil? Thomas Musil is the director of the Shenehon Center for Real Estate in the Opus College of Business at the University of St. Thomas in Minneapolis. He is a Phd, real estate broker, analyst, consultant, and expert witness in real estate litigation and arbitration disputes.

Dr. Musil has also served on the following boards and committees: United States Department of Housing and Urban Development; the Building Owners and Managers Association; the Appraisal Institute; the National Association of Industrial and Office Parks; National Association of Corporate Real Estate Executives; and the American Real Estate Society.

This man is worth considering, listening to, and pondering his warning as a call to take action.

Below are excerpts and points from Dr. Musil’s article “Will real estate agents be replaced with virtual deals?”

1. The next step for real estate “virtual transactions, could happen.”

2. Many real estate services are already online.”

3. Skepticism is alive and raging over amounts of commissions earned by agents and their “veracity.”

4.Could the consumer set the stage for a revolution in real estate transactions?”

Dr. Musil’s answers to his posits and points:

1. Technology is changing all business niches and real estate is not exempt from this change.

2. Technology provides more information to the consumer and “market activities are more transparent.” See Pat Kitano’s great article on radical transparency.

3. Although media has posited that the “Realtor is going the way of the dinosaur, travel agent, and stockbroker. . . Agents bring value to transactions.”

4. This Realtor Value is due to the increased “complexity, regulation, requirements, and procedures facing real estate buyers and sellers.”

Analysis: Many consumers will opt to perform as many functions of the process of buying or selling real estate in the virtual world as is possible. Online signatures, a specialty of super agent Kevin Boer of 3Oceansrealestate.com, is just one example of the virtual world’s new role in the transaction.

In the final analysis, a majority of consumers will rely upon an agent to help them complete their transactions. Although this will remain the status quo, Realtors must learn and adopt as many virtual “functions” as possible in order to remain credible and viable to all consumers.

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4 thoughts on “Realtors’ Down Market Warning #1-Thomas Musil Posits: “Will Real Estate Agents Be Replaced With Virtual Deals?”

  1. Hi Dean,

    Thanks for pointing us to Dr. Musil. I certainly hope he isn’t right about agents being completely replaced by “virtual deals.” Real estate is, of course, a much more complicated, emotional, expensive, and hands-on transaction than is, say, buying airline tickets.

    Still, you never know. Technology has brought about incredible changes in many fields, and there’s no reason real estate should be exempt.

  2. First, lets admit that trading stock or buying an airline ticket, is not as important as buying and selling one’s most important asset, their home. Real estate transactions are very complicated, and our real estate board wants to keep it that way. Can you guess why?
    As for technology shifts, we agents will adapt to the needs of the consumer, and give them as much helpful information as possible, in ways that work best for them. Sometimes too much information overwhelms the client, so we have to help them sift through it to find something relevant.
    For better or worse, real estate agent will be around for a long time. For as long as we bring real value to the consumer and the deal.
    I enjoy your blog. Keep up the good writing, Dean

  3. Kevin,

    Great to see you! I am of the opinion that Realtors will always be part of the process. Yet I am also of the opinion that Realtors who are unwilling to implement technology will lose business to the younger demographic.

    My idea is simple in that Baby Boomers are beginning to cycle through life. Their position as buyers will be replaced by a younger demographic trying to become established. It is this new and upcoming group that Realtors must keep up with on the technology issues. They will be, within a few years, the majority and they will be very technology savvy. In addition to this group of buyers and sellers will be a new wave of younger, tech savvy agents coming into the industry as competition. It’s a double edged sword.

    Great to hear from you your blog is so informative. Keep up the great writing!

    dean

  4. Dear Magent,

    Such kind words thank you! Frankly you brought up a very interesting point: Do real estate boards purposefully complicate the process? If so is it done to keep consumers coming back, keep consumers in the dark?

    If you are right then that mentality plays into something that Kevin Boer posits quite often in his discussions with Realtors: Why have lead generation companies been able to sell Realtors their own information?

    The idea Kevin hits upon is that the Brokers and Boards that decided, long ago, to horde and make MLS info exclusive to the agent hurt the industry tremendously. This act of hiding this info set the stage for the Zillows of the world to garner both consumer traffic and consumer advantage.

    Now the cat is out of the bag. Consumers feel empowered by online companies willing to give them information.

    The Zillow’s and realtor.coms could have been left with nothing had the industry shared MLS information and set up the same type of online sharing of info that is going on today with the aforementioned companies.

    Sorry for the rant. If I messed up Kevin let me know?

    My mom is a Realtor and I believe Realtors bring value and are an integral part of the business. I also believe you when you say that providing to much “mental clutter” can sometimes work against an agent during the process.

    Thanks for the kind words and thought provoking comment!

    dean

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