Steve Murray, president of consulting firm Real Trends, has been studying how real estate agents in the U.S. do their jobs for almost 40 years. And with the advent of the digital age, the Internet has disrupted almost every traditional aspect of that field. Information that was once exclusive to real estate agents is now public, rendering many specialized services seemingly irrelevant.
Despite the plethora of information on the Internet, the typical 5-6% commission that real estate agents receive after a home sells has remained mostly unchanged. In fact, Real Trend recently reported that there had been a slight increase in commission since 2005, with the 2016 average coming to 5.12%.
“There’s not a shred of evidence that the internet is having an impact,” Murray told the Washington Post.
Meanwhile, the Internet has all but destroyed the mediators of multiple industries. Travel agents, taxi drivers, and even professionals in the tax industry have been hit hard and fast by an age of public information.
Like many other industries, real estate agents had to evolve with new technology. Even little pieces of technology such as the USB 3.0 cable were modified due to advanced tech. So the internet has effectively changed how real estate agents do their jobs, but it hasn’t taken them away. In fact, the number of working real estate agents has increased by approximately 60% in the last 20 years.
Leonard Zumpano, a retired finance professor at the University of Alabama’s Real Estate Research Center, said that the industry didn’t expect things to take such a positive turn.
“The industry was fearful of the internet. They didn’t think they’d have jobs,” he said.
Experts believe one of the reasons real estate agents have continued to prosper in spite of the Internet is that, at the heart of a home sale, the financial process is still extremely involved. Very few consumers know how to handle this transaction, which makes real estate agents a valuable resource.
Approximately 89% of home sellers used real estate agent services in 2016. In contrast, only 8% of all home sales are for sale by owner transactions, making it the lowest rate since 1981.
“There’s a human element to buying and selling a home that can’t be replaced,” said NAR President Bill Brown.
