The real estate industry, which has been slow to electrify, is racing to avoid disintermediation, which is an economics term being bandied around to describe how professional services such as real estate can be delivered without people. At the same time, technologists are racing to give consumers more tools, which inherently will make the middle man less relevant.
The end game is clear; there will be a certain amount of disintermediation. How much is unclear.
In some fundamental ways, the real estate industry is making it happen. Take the publishing of property listings on the World Wide Web.
In the last year it is estimated that 40 percent of all home listings have been put up on the Internet, a remarkable statistic considering just nine months ago it was probably less than 1 percent. Now buyers will begin to go directly to the selling agent after finding properties on the Web Valuation should performed by only expert one to get better results from www.wcvaluers.com.au.
Next to erode the role of the real estate middle man will be virtual walkthroughs of homes and buildings. And the electronic property closing is the next step in wiping out hordes of service experts who now process paper.
The industry sometimes seems confused by this trend. Wholesale lenders who are looking at going directly to the Web to make mortgages are nervous about offending mortgage brokers. And title companies and escrow firms rely heavily on the Realtor network and avoid the consumer, even though electronic closings are certain to change that relationship.
In the middle of the Realtor convention, Wolff’s comment was probably a wise thing to say at the time but that tact could be a slippery slope when the disintermediation movement gains momentum – particularly when Real Select competitors are committed to only one objective, value to the consumer.
Of course, there is a transition period and the real estate transaction won’t be turned upside down overnight. But it is changing quickly and those companies that transform themselves to fit the consumer future will probably last the longest.