If you look at the demise of Encyclopedia Britannica, you see a clear roadmap of how history will repeat itself to cause the demise of the REALTOR®. Up until 1994, the Britannica sales associates sold about 120,000 hard copies. Salespeople consumed the most amounts of profits from the transaction. The salespeople at Encyclopedia Britannica protected their data. The three or four thousand pages of the books were protected by copyright.
Then came the Internet, and more importantly, Wikipedia. The Britannica sales person was disrupted by a price point of free. The cost of data was disrupted by user-generated content.
Adapt the pattern to real estate.
Like Britannica, salespeople or REALTORS® consume the most amount of profits from the transaction. REALTOR® salespeople are protected by data copyright and forms copyrights today. The MLS protects REALTORS®. The National Association of REALTORS® protects REALTORS®.
Disruption is coming. Today, 1 in 4 buyers find the home they ultimately purchase using the Internet. Like Wikipedia, the cost of consumers to access listings on the Internet is free. Even posting a listing on FSBO (user-generated content) is free. Heck, in less than an hour I can publish more information about my home than any REALTOR® would ever be able to produce. I can do it for free. This is exactly like Britannica – free and user-generated content.
REALTORS® have one advantage remaining today. Processing the transaction. State and local transaction and disclosure forms are only available to REALTORS® or Licensed Sales Associates who subscribe. This is the final leg of protection.
Will the last REALTOR® turn off the lights?
If you are a REALTOR®, or a real estate brokerage, or a real estate brand, or an Association of REALTORS®, or an MLS – and you do not think that you are on a path to self-destruction, you are delusional. Your reckless behavior with data management not only exposes the privacy of the consumer you have vowed to protect, it undermines your future existence as a service provider. Your actions are planting the seeds for the evolution of FSBO transactions.
To preserve your future, you need to do one simple thing. Copyright your data and only share it with others through a restrictive data license – or, do not share your data. Only a small handful of practitioners have chosen not to share their data. I revere their courage, but I also revere the many firms that have pursued restrictive data license agreements. This is not any condemnation of online marketing or portal syndication. Rather, it is a plea to do it safely. Point2, Listhub, and the legion of MLSs are trying to help you. But you must help yourself by making good choices. DO NOT PUBLISH YOUR DATA ANYWHERE WITHOUT A RESTRICTIVE DATA LICENSE AGREEMENT.
Every publisher of any significance already accepts these terms, but only when compelled. Compel them my friends. Perhaps it will only suspend the inevitable. But at least you will breathe a little longer.
History Note: There is an ongoing debate about the oldest real estate firm in America between NP Dodge and Baird and Warner. They were both founded in the same month in 1855. They will turn 160 next year! I have profound confidence that they will make that birthday. I prey they make it to 200. On the Britannica website they refer to themselves as a 246 year old start up. I can also tell you that NP Dodge and Baird and Warner view their history with the pride in knowing that they have been able to manage change successfully.
I agree with you as it concerns the stupidity of given away data. However, transaction assistance isn’t the only thing a real estate agent provides. My clients value my knowledge of the market much more than my ablity to fill out the forms correctly. Also, you refer to “Realtor(s)”. Why not “real estate agents”? Many of us are not members of NAR.
Great insight and point we as REALTOR®s need to protect or clients and industry. Our data is valuable and can assist sellers in obtaining the highest and best price. Technology is there to help not over take our industry. Real Estate is still a PEOPLE business and most sellers do not want to take the time or have the time to sell on their own or know the proper disclosure issues. Thanks again! 🙂
You failed to make the point that data would kill the Realtor. All you said was that you could publish more info about the home than anyone else ever could – but I don’t believe most consumers would actually do that. They don’t want to go to multiple websites, deal with multiple interfaces, upload their photos multiple times. Most agents don’t do that with their listings now even though they make money if it sells. They upload to the MLS and they expect the MLS to push it everywhere else or at very least their brokerage will. Consumers aren’t going to see that they are making more money to do all that work and you said they would have to do the work to process the transaction too. But millions of people pay someone else to do their taxes, which is a once a year transaction rather than once every 7-10 years. Some people will always take the opportunity to do the work themselves to save a few bucks but I suspect the huge majority will continue to pay agents to do the work because it’s not worth their effort to do it themselves. Real estate is an inherently individual transaction every time. No matter how many times you’ve bought and sold, there will be nuances to each transaction. The value of real estate agents and brokerages has absolutely nothing to do with data, it has to do with service and experience and consumers who want this very important transaction handled correctly by someone who does it every day.
When an online portal can walk consumers through the all the paperwork in a transaction, using AI and decision trees, that will be the turning point.
You’ll notice i said when, not if or maybe. Some bright college dropout is probably in his Mom’s basement coding it right now.
While I agree with the points made about the importance of data protection (work product) for Realtors, I disagree that encyclopedia salesmen are an appropriate comparison to Realtors. Apples and Oranges except for the common source of disruption being the “Internet”. Other than that, the comparison is silly.
Steve
This article is absurd!!! First of all, it is hard form me to take this writer seriously when he has inaccurate information…FSBO.com IS NOT FREE – the cheapest plan available is $89.95. Next, I encourage the writer to come spend a day in my office if he thinks all REALTORS do is fill out paperwork. As far as giving out data?!?! What REALTOR in their right mind does this?!?! Oh yeah, I’m gonna send out my database of buyers and sellers to everyone I know – then I’m gonna send out documents that I pay good money each year to “HAVE the RIGHT” to use. Finally, to imply that our industry will go away due to the internet is completely insane. Do consumers have access to more info – yes. Do some buyers and sellers try to skirt around using a REALTOR – yes. HOWEVER, a great REALTOR focuses on building relationships with their customers and clients. Can a computer take them to dinner or bake them a cake for no reason at all? Can a computer look the buyer and seller in the eye and tell them the have their best interest at heart? I DON’T THINK SO!!! I just wonder what this guys is trying to sell? I can tell you – I’m not buying!!!
I think I understand the point you are trying to make but it sounds like that is through fear rather than customer service. I see my carreer as a real estate agent to market my sellers properties to as many people as is possible and in this day and time that is ALL types of media including the tried and true publications and also the tried and true internet. I have always seen Real Esate as a numbers game; more telephone calls leads to more viewings, the better chance of receiving an offer. I am not intimidated by the FSBO websites the type of seller that tries to sell their property themselves sometimes gets lucky but most of the time they end up listing their property with a real estate agent because we are professionals and we do advertise their property in a national and sometimes global marketplace to anyone who may be interested. I do not foresee a future where real estate agents. Just food for thought