This is my column for this week from the Arizona Republic (permanent link):
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.
Technorati Tags: disintermediation, real estate, real estate marketing
Dave Barnes says:
Greg wrote: “Even if they do, the “first-mover advantage” can be too great to overcome.”
Not true.
1. First mover: AltaVista with free search.
Winner: Google
2. First mover: Yahoo (Overture, GoTo) with PPC search.
Winner: Google
3. First mover: Apple with GUI.
Winner: Microsoft
4. First mover: Netscape with browser.
Winner: Microsoft.
5. First mover: Ford with affordable autos.
Winners: GM and then Toyota
6. First mover: Edison with direct current.
Winner: Westinghouse with alternating current.
April 20, 2008 — 7:21 am
Greg Swann says:
“can” != “will”
Even so, you’re off the topic. Do you wish to claim that Realtors with ballpoint pens and carbon paper will hold their own against their more tech-savvy competitors?
April 20, 2008 — 7:50 am
M a r i a n a says:
Technology will not replace real estate agents.
Real estate agents with technology will replace real estate agents.
April 20, 2008 — 8:58 am
Doug Quance says:
I find that while the online tools are cool – even my tech-savviest clients get an education from me that they will never find online.
In that sense, I am not unique. There’s a million others who do it. What is unique is the method. One-on-one – in person – viewing real estate on location.
You won’t get that experience online.
April 20, 2008 — 9:00 am
Gary Frimann says:
Gregg,
Great article. I feel it is not a question of “Innovate or die” but rather “Adapt or die”.
What is happening is, in my opinion, is that things are changing so rapidly, and exponetially, it does sometimes appear to be overwhelming to most agents.
The landscape and playing field is changing so rapidly, those that do not adapt will be out of business, most likely.
I also agree with your comment that Realtors will most likely not be replaced. People sell houses, not computers. People will always (I believe) rely on Realtors for knowledge and expertise. Those who use modern tools will survive and rise to the top.
April 20, 2008 — 9:03 am
Greg Swann says:
> Technology will not replace real estate agents.
>Real estate agents with technology will replace real estate agents.
That was a koan at Inman a couple of summers ago. Very true.
April 20, 2008 — 9:49 am
Pat Kitano says:
The best real estate agents who can leverage an impressive track record or educational/credentialed background may start developing real estate consultant firms and position themselves like lawyers and surgeons, with essentially a similar commission based business model.
April 20, 2008 — 10:15 am
Bawldguy Talking says:
Hi-tech + real savvy + consistent results will win the day. Those currently experiencing a false sense of ‘nothing’s changing’ will eventually come to the hi-tech party. It’s only a matter of when.
Pat — I’ve been ruminating on exactly what you’ve laid out. I’m only in the 2nd inning, but can already see a stand alone niche using that model — but in addition to what I already do.
Grandma said those who don’t listen when the smartest kids in the room are speaking, are doomed to being left behind. So either be one of those kids OR be like me — I’ve been modeling Japan for decades now. 🙂
April 20, 2008 — 11:22 am
Dave Barnes says:
http://www.polocenter.com/farrier/farrierus.htm is a good source of info about one type of blacksmith: the farrier
April 20, 2008 — 12:03 pm
Dave Barnes says:
Greg wrote: “Do you wish to claim that Realtors with ballpoint pens and carbon paper will hold their own against their more tech-savvy competitors?”
No.
But, there is a difference between using Word today and using Twitter. Can’t use Word, then you lose. The jury is still out on Twitter.
You don’t have to be an early adopter.
April 20, 2008 — 12:06 pm
Todd says:
Here’s an outside the box example: I was working one of my first jobs at a big Defense Contractor in the early 80s right when the computer design program AutoCad was released. The defense company had over 200 draftsmen on staff, each hand drawing blueprints for missiles, planes, etc.
Some of the comments I read above are eerily similar to what I heard from the draftsmen “…They still need us.” “…a computer can’t design something as complex as a jet fighter..” “…even if there are a handful of early adopters, it’ll take decades to replace all of us…”
My job? To set-up and install the first AutoCad workstation, then take a few test blueprints ( hand drawn ) and see how long it would take to duplicate them using software. First few drawings were very slow, took four times long using software than it did to hand draw. Nex try was better, fourth try was even.
Long story short, after a one year evaluation, all 200 draftsmen were let go, replaced with just five college kids and five AutoCad workstations.
April 21, 2008 — 11:41 am
Chris Eliopoulos says:
“Will Realtors be disintermediated by on-line tools? Probably not, but tech-savvy Realtors will supplant those who do not adapt”
What is tis mania calling brokers and agents realtors?
There is no such thing as a “realtor” is an acquired title (overpriced in my opinion) for marketing purposes with questionable value.
Can all of you please get real and start calling us with the correct name of our profession?
May 29, 2008 — 6:49 am
Greg Swann says:
> Can all of you please get real and start calling us with the correct name of our profession?
Hi, Chris. I think you might be lost. The weblog that talks only about what it doesn’t want anyone to talk about is elsewhere. We do what we want. Feel free to do the same.
May 29, 2008 — 7:05 am