3 Changes in the Real Estate Brokerage
One of the basic needs of humans is real estate, which has been part of our lives since time immemorial. Although the need for these things has remained the same, the characteristics of necessity have drastically changed over the last century. During your lifetime, you will definitely deal with real estate at least twice or three times. For some people, it may be more than that. It doesn’t matter if you switch jobs, move from one place to another or if you move to another country, you still have to deal with a real estate service provider every time.
Recent years have seen the Internet enable self-service components for buying and selling real estate, such as home listings searches. Residential real estate brokers’ traditional role has been transformed as a result. Let us look at a few factors responsible for the drastic transformation in the real estate sector.
1. INDEPENDENT SERVICES
As home owners and potential buyers become more empowered, there is a growing need for unbundled services. The majority of transactions may be handled by a brokerage, but some consumers would prefer to handle some aspects of the transaction on their own. Increasingly, home owners are hosting their own open houses, while home buyers are able to search online for open houses.
As clients become able to handle some of the tasks needed to sell their homes on their own, brokers are under pressure to unbundle their services and offer only the ones they can add value to.
2. DISCOUNT BROKERAGE
As a result of the demand for unbundled services, discount brokerages have started to emerge in order to offer reduced commissions to homeowners who perform some of the selling activities themselves. The pressure for reduced buying agent commissions has also increased in the current economic crisis.
Online discount brokerages are still relatively new to the market, but they have gained traction in recent years due to their convenience
3. INCREASING DISINTERMEDIATION
Matching supply with demand is the function of an agent. As intermediaries coordinate market participants, they help markets achieve market equilibrium. The more buyers an intermediary service, the more valuable it is for sellers looking to use it as a distribution channel.
Although working with an intermediary can expose a seller to more potential buyers, the online brokerage services have challenged the survival of intermediaries as it facilitates direct contact between sellers and buyers.
A phenomenon known as disintermediation has been facilitated by the online channel, which allows market participants to remove the middleman.
As a result of the emergence of online discount brokerages, the unbundling of services, and the disintermediation of the real estate industry, there is a potential challenge to the traditional role of the real estate broker in the coming years. There is no doubt that consumers are increasingly preferring to choose the specific services that they wish to obtain from brokerages and pay a fee to a brokerage according to the services that they select.
A new emerging business model will offer brokerage services in a customizable manner in which the client can choose from a list of services.
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