As I watch the price of gas at the pump continue to climb – yesterday I paid $4.19 per gallon for premium here in Loudoun County, Virginia – I secretly pray that it continues to go up. I know this might sound crazy but if you think about the implications of extremely expensive gas on the real estate industry, it is actually not a bad thing at all. In fact, many of the problems the industry either can’t or won’t correct would be solved by a gas crisis here in the United States.
Thin The Herd – $10/gallon gas would force a lot of the agents that are just getting by or part time agents that have a license but sell very little real estate to not renew their license. We have already seen the effects of real estate price corrections on the ranks of licensed agents and continued economic pressure would continue to “thin the herd”. And with dues a major source of revenue the associations would never reduce their ranks even if it means a better membership and an improved industry image.
Improve the Membership – Ineffective and lazy agents would leave the industry if gas was $10/gallon. The ineffective agents would have to because it would no longer make financial sense to drive clients around to houses for 8 hours a day without the hope of a sale. The lack of ability to properly prequalify, preview and close deals would cost them too much money and they would be forced out of the business. The lazy agents would refuse to drive the car and preview homes for their buyers in an effort to save money. This would eventually backfire as their lack of local industry knowledge would be realized by savvy buyers and they would be fired/abondoned by their clients.
Reward Technology Savvy Agents – $10/gallon gas would make technology savvy agents more effective, more productive and more relevant. As sellers realize the importance of high quality pictures and dissemination of their listing throughout the online world of real estate, they will turn to agents who are already doing this for their clients. As buyers stay home and preview and house hunt in an effort to save precious gasoline, they will overlook listings with poor online exposure. They will demand more information about a home online and eliminate homes from their search that have little or no information. We are already seeing this happen at $4/gallon but $10/gallon would really deepen the chasm between technology agents and non-tech agents.
Agents Forced to Think Local – Another positive result of $10/gallon gas would be a return to agents focusing on their local area instead of going wherever they can get a listing or wherever a buyer wants to buy. Agents taking listings two and three counties away will become a thing of the past when the agents realize all their profits will go right out the exhaust pipe of their cars. Agents will instead form referral networks in neighboring counties and jurisdictions outside of their area of expertise. This will also eliminate problems caused by listing agents unfamiliar with areas mispricing homes and creating badwill.
If there was a truly revolutionary broker in the real estate business, they would be anticipating the continued rise in gas prices and would create a brokerage that required their agents to use technology to its fullest extent, use only recycled products such as signs and paper and require all their agents to drive hybrid or electric cars. But are there any truly revolutionary brokers?