Real Estate Agents are Thriving
There are many real estate agents in business today than ever before. Based on their profile, the kind of business that real estate agents are doing across the country seems to be too good to be true. It is true that not every real estate professional that people do business with turn out to be super heroes. Some of them may take months to sell your house, not take your calls, may advise you to take the first offer that comes however low or wait for the “right offer” that may never come. On the other hand the best real estate agents can offer invaluable advice on how to buy the best properties or how to sell your home faster. They can be the best allies if you want a higher price for your house (and who doesn’t want that?!)
When it comes to real estate agents, everyone is looking for the same thing – We want an agent with knowledge of the local property market and has excellent negotiation skills. But how do you find that person?! Because clearly its not enough to find a good real estate agent by going through portals like 99 acres or Magicbricks which lists agents and brokers by the thousands. If you are searching for a real estate agent you can either ask your relatives and friends for recommendations or you can go online and find out who is doing the most and the best work by going through their websites and other online channels. In this article I will give out some tips on how to appraise real estate agents based on their competencies and how to know when you have found the best one in town!
Before we get to that though maybe you are wondering whether the world now even needs real estate agents at all. We have mentioned in several articles in our blog in the past why trying to sell your house yourself can make you almost 30 % less than if you sell your house through a broker and why you may get a great house at a great deal just because you were working with a high competent real estate broker. But there are always some people who wonder whether real estate agents are heading the way of the travel agent, the stockbroker and well the dodo bird!
Real Estate Agents Have Embraced Technology
Research suggests that the answer is No. Not by a long shot. Real estate agents are still incredibly important and they are not going anywhere. In fact in today’s world real estate agents and brokers are thriving – atleast the good ones. And we are working more today than ever before. The top real estate builders and developers attest to the importance of real estate agents who in todays world are responsible for almost 75% of the sales inventory of new projects!
Real estate agents have stayed relevant today because they have embraced technology more than any other service-based industry. Some of the smartest and most tech-savvy real estate agents that I know including ourselves in the industry spend lakhs and crores of rupees every month on marketing resale properties, new homes, new housing launches and projects through Google adwords, social media and other forms of online marketing. Show me any other service industry that spends this much on using technology to generate leads and I will eat my words 🙂
But spending big bucks on online advertising is not the only reason why real estate agents are still thriving while travel agents and other industry brokerages have shut shop. They are more important now than before partly because both buyers and sellers acknowledge how complicated the housing market can get and assistance is always welcome. Knowing that buying or selling a home is one of the most important decisions and sometimes the biggest financial transactions of a person’s life it not surprising that more people want a trained professional on their side during the entire process.
Transaction Cost Economics
If I may add here – there is an entire field of economics called “transaction cost economics” that helps you understand why real estate professionals are likely to remain an integral part of the transaction process. Transaction cost economics addresses among other things why professions such as real estate agents, travel agents and stockbrokers exist in the first place. Come to think about it, the market would actually be more efficient if the “intermediary” firms would not be there in the middle. But as transaction cost economics explains people are more likely to want a professional to oversee and manage the transaction when a purchase is relatively rare and infrequent. When the purchase becomes more frequent and less expensive the middleman becomes less necessary.
That is the reason stockbrokers and travel agents are becoming extinct while real estate brokerages are thriving like never before.
Because when booking a trip to Bangalore or Dubai, most people including older people have become proficient enough to use the user interfaces of apps and websites to do the booking of flights and hotel reservations themselves. But when it comes to finding and financing a home one realizes that the entire process is fraught with emotions, is life-changing and bank-account-depleting and the gravity of the situation leads everyone into the offices of an expert who is familiar with such transactions and can come on their side as an ally to best advise them throughout the entire process.
A useful analogy here would be that of health issues which are again a topic that is of paramount importance to a person’s life. When faced with a health or illness we all research online “What are the symptoms of Covid” for example. But then we visit a doctor to get a proper diagnosis and for further treatment. An internet query can help you find the answers to a query that you may have but ultimately we need professionals to help us interpret and treat the ailment. The same holds true when buying or selling property. Home purchases are rare, emotional and expensive. When the stakes are high then the expertise required is also high.
Real Estate Industry – An Evolving Business
The example given above states the indispensable nature of the work that we as real estate agents and property consultants do but that does not mean that the Indian real estate industry will never change. In fact the real estate agents job is already evolving. In the early days before the internet-era the agents job was being an information gatekeeper. Today our job is more in line with that of the service industry where we bring our mind and muscles to the negotiating table. People in today’s market may be more comfortable searching for a home on their own – but they still need the services of a competent and reliable agent to help broker the deal and bargain for a fair price. If you are one of those who are looking for a real estate agent to be by your side whether you are buying or selling – you are not alone! But do remember that it is important to find the right agent. In my next article I will give you some tips on how to select the best real estate agent for buying or selling a residential home.