April 19, 2008: Will Realtors be disintermediated by on-line tools? Probably not, but tech-savvy Realtors will supplant those who do not adapt
The big news in real estate is the market, of course. My view is that the American economy is much stronger and more resilient than you might guess from day-to-day reports.
But the other big story in real estate is the idea of "disintermediation" -- replacing Realtors with some combination of do-it-yourself effort and hi-tech tools. The stock retort to this notion -- and I have made it myself -- is that people will never buy homes like they buy books on Amazon.
Perhaps so. But I lived through the desktop revolution in printing, so I have a different take about the dreaded word disintermediation.
If the triumphant yelp is that some travel agents and some stockbrokers still have jobs, I will point out that some blacksmiths still have jobs, too. Horses still need shoes. That much is beside the point.
Here's my take on the matter: Don't think in terms of disintermediation. Use the word "supplantation" instead. In industry after industry, old techniques are being supplanted by new ideas. More importantly, the old technicians are being supplanted by new ones.
This is not a necessary consequence, but it often works out that the "old hands" don't want to make the change to the new ways of doing business. Even if they do, the "first-mover advantage" can be too great to overcome.
The same goes for everything -- most especially real estate. Realtors who are not all the way onboard with the way business will be done in the future will be left behind at the station.
A real estate transaction is so complex that most people will continue to want professional advice -- even as they handle many of the simpler functions Realtors might have done in the past. The work we do will be superficially similar to the work others have done in the past -- but those others won't be doing it any longer.
Will they have been disintermediated? Not if you insist that they haven't. But they will have been well and truly supplanted.
When will that happen? Ask a blacksmith -- if you can find one.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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