Why pay a 6% split to Real Estate agents when their are tons of start ups offering self-checkout solutions? The same reason you trust a skydiving instructor or value your child’s 1st grade teacher. Technology and the “self checkout” movement will have you to believe that Real Estate agents are going the way of the dinosaurs. Although these types of companies have found a small niche in the market, from a Brokerage standpoint, they simply offer a preview of what is possible with automation and motivate Brokerages to “step-up” their game.
On the surface, the self-checkout model works as a standardized solution that will save you thousands of dollars on your next home. But many real estate professionals will tell you, very few transactions can fall under this standardized model. Most transactions require additional resources, attention to detail, and some creative negotiating in order to close the deal. Typically, in order to list your property using the one-size-fits-all model, you are paying for the appraisal upfront, you are required to list at or less than the appraised value, you pay for a home inspection, and pay for any repairs required by the listing company. This is how they standardize the process for the buyer and make the home buying experience similar to buying a can of baked beans. They make their money by playing a numbers game by volume over quality of transactions, and you are just another number. With an agent, you make a personal connection with someone who is going to know how to make a win-win situation by offering suggestions on where to give and take. They are the “feet on the ground” and understand home trends for your area. They are vested in your success and your catered experience will have a greater impact on the outcome of your transaction.
You don’t just look for a home, you look for peace of mind, community, and representation. This is like watching your favorite sports team. You can watch them on your phone alone, or you can experience the game with your friends and family in the comfort of your living room. The difference is community. With the self-checkout model, you general are looking at homes alone which can limit your ability to get the bigger picture. You are only privileged to your own perspective and can miss valuable details or insight offered by having an agent. In one example, a client relied on the “listing report” of the listing company to provide all the details of a pool in the back of his property. The previous owner had constructed the pool 13 inches into a city easement, and as a result, the pool had to be moved after he had already purchased the home. Had he gone through an agent, he would have been made aware of the risks and been able to negotiate more effectively. Having a real estate professional represent you will result in greater peace of mind and bring an experienced perspective to the table.
One valuable aspect these self-checkout systems bring to the table is innovation. They have perfected the use of transaction automation and auto-communication (which is different than robo-calling). Their standardized systems allow fewer things to fall through the cracks or pass deadlines. But a lot of Brokerages have utilized the same systems in their own systems. The technology that has been influenced and pioneer by these startups have been made available through third party software providers. And what we are seeing now are these startups offering “expert advise and reviews for an additional fee”. Sounds like an agent to me.