The Widening Age Gap and Changing Relationship Between Buyers and Agents

There’s an excellent post over on The Wall Street Journal Developments Blog regarding the growing age gap between buyers and real estate agents. The median age of buyers in America is 39 while the median age of real estate agents is 51. In addition, 49 percent of first-time home buyers are between 25 and 34 years old. This, in itself doesn’t mean that much. But when you look at the comments on the post and what buyers are saying in general, the age gap and changing relationship between buyers and agents becomes very evident.One reader said,

“Most agents are not utilizing technology efficiently.We had a young agent and he did an excellent job with marketing our town home. We ended up getting three dozen offers. He also uses BlackBerry and a few other tech gadgets which many agents simply don’t use or cannot afford or whatever.”

Another reader commented,

“I have to admit that old school agents make me nuts. Half the time they come at me with a couple NAR talking points, not realizing that us younger buyers are running the numbers and doing the research online. It makes them sound archaic and I always wonder if they really think we’re that dumb?”

The one comment that really hit home for me and that I definitely agree with was,

“The future of real estate will be this: Agents will offer their ’services’ in a tiered format – a menu of services for a price. The bulk of their ‘business’ will be in the negotiating, paperwork, etc. at the end of the sale.

The education process, visiting properties, etc. will be done ONLINE by buyers. They will do all the agents’ work, and will use the agent only in the end, for the one part of the transaction that still makes even experienced buyers/ sellers uncomfortable – the negotiations, and the mounds of paperwork. THAT will never be able to be done online,and even experienced buyers don’t feel comfortable doing it.

Is that bad? No. It will just change the way real estate is bought and sold. Just like travel agents. One can still buy a ticket on a plane, or book a vacation or use a travel agent. BUT, their business model has seriously changed in the past 10 years. Real estate will be exactly the same way.”

The real estate industry needs to pay attention to posts and comments such as these because they reflect the consumers’ growing perception of an agents’ value (or lack thereof); what they expect from the real estate transaction (regardless of how long an agent has been doing it a certain way for); and where real estate is headed in the very near future.

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5 Responses to The Widening Age Gap and Changing Relationship Between Buyers and Agents

  1. Brian Block says:

    Danilo, what we still bring to the transaction as agents is our skill with negotiation and holding the contract together. Finding a house for a buyer or putting a listing on the market is the easy part. The bulk of the work is between contract and closing. Most buyers these days know they can find the home themselves. I have clients tell me this every day. They still come to me because they want help with the negotiation and with the paperwork.

    Since the page length of the real estate contract paperwork keeps increasing just about each year (thanks to the Standard Forms committee), it should keep both REALTORS and attorneys in business for many years to come. Luckily, I have a license in both professions.

  2. Jay says:

    There is a ton of truth to the consumers’ observations. My main purpose is equipping consumers with tools and knowledge about the market to do their home search and negotiating the contract/keeping it together at the end. The negotiating is #1 with $10,000-$300,000 at stake for the buyer depending on the property.

    Listing agents will gradually diminish….It’s the selling agent that brings the buyer to the table. Or is the the buyer brings the selling agent to the table. You get my point. Either way we don’t care if it was listed as a flat fee listing or by a “high powered” listing agent. We still bring out buyer the same–so the consumers will begin letting go of the old models of full service listing agents in the coming years. Watch. However it won’t be fast, but it will arrive so that half the time there will be 1 agent receiving a commission. I’ve been meaning to write about this subject and how it affects Arlington Virginia real estate for the last 2 years and eventually will really get into writing the piece….It will probably upset many in the local industry though.

    I would add that when it comes to tech, those agents who are not using smartphones (for ex.) are NOT providing the best service to their clients. If you cannot receive and send a time sensitive contract from your phone while out showing property with other clients simultaneously then your clients are not receiving the best service.

    J

  3. Pingback: CurbPlaces Blog » The Age Gap: Real Estate and Technology

  4. Although I agree that the internet will increasingly make it easier for buyers to narrow down the property they ultimately buy, I don’t agree with the similarity to what happened with the travel agent business. People can buy tickets or make reservations on line without personal interaction because know they will get on that plane and rent that car the same way no matter where they travel. The place they stay will only be temporary and so if it ends up not being as nice or they get bad service, the consumer will mark that down as a bad experience. When you buy a home, it is a huge financial investment and it is yours. You don’t stay in it for a week and then give it back if you don’t like it. Because of that, a professional who has great market knowledge, will always be needed even if it is only to help facilitate and negotiate the best deal possible on a home the purchaser found through their internet efforts.

  5. Equating buying an airline ticket to buying a house is not understanding the nature of the commodity being sold or the seller of the commodity.

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