According to the National Association of Realtors (NAR) 2018 Buyer and Seller Survey, 87% of buyers purchased a home through a real estate broker or agent. With numbers like this, it would seem like brokers should be quite content. However, there is more to the story.
The Impact of Listing Sites
Since companies like Zillow have made listings available to everyone and even democratized comparables (to the extent that their Zestimates are accurate), some buyers and sellers no longer see the value of retaining an agent or broker. In some cases, the commissions that industry professionals charge could be repurposed to furnish an entire house.
According to the NAR, although 44% of buyers began their search online, nearly 90% ended up hiring an agent or broker. More than half of those buyers hired their professional to help them find the right home.
It may be because listing sites provide consumers with too many options. The NAR found that buyers who did not use the internet to search for homes spent an average of 4 weeks searching and visited 4 homes. Those who did use the internet spent 10 weeks searching and visited 10 homes. This drawn-out searching process dramatically increases overhead for agents and brokers.
The Answer Is More Technology
Listing sites may be lengthening searches and raising broker overhead, but the answer to this problem could well be more technology. Just as sites like Zillow leveled the playing field for consumers by opening up formerly privileged information, blockchain-based platforms like Propy can tackle some of the real estate industry’s paperwork and red tape problems. Propy allows buyers and sellers to conduct their transactions online. Documents can be uploaded, signed, and securely stored on the blockchain. It not only saves time, but it is also safer than paper.
Propy offers smart contracts. Rather than pay a lawyer to enforce a promise, buyers and sellers can commit their agreement to a smart contract which will automatically release payment upon the receipt of a signature, document, or other agreed upon action.
To combat the additional expenses involved with increased transaction times, agents and brokers should consider a platform like Propy to cut back on wasteful paperwork and time spent coordinating with lawyers. Clients will also benefit from Propy’s blockchain-based buying and selling process.