Are You Worried Zillow and Redfin Will Replace You?

Today, a friend asked me, "Are you concerned about Zillow and Redfin? Travel Agents aren't really needed anymore because of sites like Expedia, so, don't you think the same thing is going to happen to real estate agents?"

My answer: "Travel Agents are in the business of giving advice and so are Real Estate agents, but you can't compare booking a trip to Europe vs. a huge investments like a $500,000+ home. The online sites help make the process more efficient for us all. By the time the buyers call me they have a solid idea of what they want and I can help faster. What Zillow can never replace is the trust, relationship and camaraderie I build with my clients, which is so important when it comes to making the offer, filling out paper work (1-inch thick worth of paperwork), disclosures, financing, escrow, etc. The service and the piece of mind I provide for my clients, these things are all so human and irreplaceable on a virtual level. Buying or selling is stressful and my job is to make it easy for my clients. I see them face-to-face, I hear their voices and I can respond to their needs immediately. Many buyers and sellers become great friends with their agents, ant it's not surprising, because it's an intense experience and we're there guiding them. A lot of things are going virtual, but when it comes to emotional purchases, people need real interaction. They need support and personal advice. And we still need travel agents actually. I've booked tons of trips online, but when it came to my Greek Honeymoon in 2007 and my South African Safari this past May, I booked with an agent. Both those trips were investments for me and I needed human advice and support because I wanted them to be perfect. And real estate agents are here to stay, because buyers and sellers need human support to ensure a personalized, attentive and as"as perfect as possible" journey to or away from home."

What would you have said to a friend asking you the same question?
  • August 20 2010 - US
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Answers (17)

Not worried because we are in a people buisness. Even if that changes the complexities of the buisness are great. When people buy houses it is a complex mix of emotions and critical reasoning. We play an important role as helping professionals. Our service while often marginalized by inexperienced or jaded buyers is important. The services change our buisness and force agents to be better educated and more service oriented than ever before. If anything it enhances our industry by consistently reminding people about real estate. I am an Epro what professionals must do is learn how to use technology to do our jobs even better.
  • August 20 2010
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I agree with the assessment in the original post. I would also add that the relationships, networking and trust within the real estate community can greatly benefit clients. Many of the best win/win deals are put together before property ever gets marketed publicly. I think one of the problems is that the talking heads that are all over the media have the average person thinking first and foremost of a house as a means to quick and/or long term wealth and as a home only secondarily. Their use of statistics and algorithms to cultivate an audience has caused people to view homes as a (substitutable and uniform) commodity. This also is substantially how the online prognostications and estimates of value are arrived at. Homes as an individual´s purchase becomes little more than a data point. The fact is that homes, especially in established communities where rebuilding, remodeling and deferred maintenance exists are not substitutable goods. A trashed out 1954 (or 1964, ´74 ´84 ´94 or ´24) 3 bedroom 1200 sq/ft REO home is likely worth substantially less than a comparably sized home in the same block that has had a recent ¨from the studs out¨remodel. Yet as data points they may look like substitute goods. A local Realtor who knows the homes and area block to block can make very subtle distinctions in value. Things like which home will have a sunny back yard or why the home that sold last year for $30,000 more was worth it because of the top of the line kitchen and bathroom remodels that the previous owner had done before being transfered to Atlanta. Endless factors of value from views to traffic flow to amenities to odor to landscaping to knowing of motivated below market sales on prior homes is the kind of knowledge that a good local Realtor can bring to the table. No online system will be able to match this ability any time soon... if ever. In the original post Sophie Gonin used the example of travel agents because their function as order takers has diminished but they are still valuable for their consulting expertise on more complicated itineraries. I use the example of the online medical sites which are such a great resource to learn from. They help people figure out when they may need a professional and when they may not. But no matter how good the sites are, a good local physician is going to know what viruses are circulating, what antibiotics are most effective against a bacterial illness and be able to determine which you have. The professional has training and experience to recognise complications that someone who is not working in the profession daily might easily overlook. Many people who think they have bargained a great deal for themselves, in real estate or anything never realize that they really didn´t because they don´t have enough information to do so. I took the National Association of Realtors long and intensive Certified International Property Specialist curriculum during a couple weeks in Bangkok, Thailand during January 2006. The other Realtors from the U.S. there were elite, smart, experienced and skilled negotiators. The group went to a floating market set up for tourists outside of Bangkok as part of the cultural tour that was arranged by our hosts. Upon returning to the bus, one of the participants was very happy with the souvenier that had been purchased for 150 Thai Baht (a little more than $3.50 at the time) from the 500 Baht asking price. It probably would have sold for $20-$25 it the states if you could find it. It was nice, in fact I had bought the same item for 100 Baht. Obviously my colleague overpaid by at least 50%. Why? My savings likely wasn´t because I am an inherently better negotiator. I had better information and local knowledge. I have maintained a second home residence in Thailand since 2000, my youngest daughter was born in Bangkok, I was experienced in buying large quantities of handicrafts for export from Thailand, I currently grow trees in Thailand to offset the paper I use in my practice. I know Thailand well. In fact, as a convenience, I knowingly paid 20-25% more than it was possible to find that same item elsewhere in Thailand. No one who knew what I had paid told our gleeful colleague because it was a once in a lifetime purchase, nothing would be gained, no usable knowledge gleaned. It just would have made them feel bad and enjoy their souvenir less. I think this is what can happen when someone does online research and all their own footwork, then seeks out a discount order taker for the transaction. They have a perception that they have made a good deal and saved money so that becomes their reality.
  • August 21 2010
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I am going to try to re-post this. I am currently using a Sun Systems software computer and some of my posts lose spacing upon transfer. I am sorry if this too is not easily readable.



I agree with the assessment in the original post. I would also add that the relationships, networking and trust within the real estate community can greatly benefit clients. Many of the best win/win deals are put together before property ever gets marketed publicly.


I think one of the problems is that the talking heads that are all over the media have the average person thinking first and foremost of a house as a means to quick and/or long term wealth and as a home only secondarily. Their use of statistics and algorithms to cultivate an audience has caused people to view homes as a (substitutable and uniform) commodity. This also is substantially how the online prognostications and estimates of value are arrived at. Homes as an individual´s purchase becomes little more than a data point.


The fact is that homes, especially in established communities where rebuilding, remodeling and deferred maintenance exists are not substitutable goods. A trashed out 1954 (or 1964, ´74 ´84 ´94 or ´24) 3 bedroom 1200 sq/ft REO home is likely worth substantially less than a comparably sized home in the same block that has had a recent ¨from the studs out¨remodel. Yet as data points they may look like substitute goods. A local Realtor who knows the homes and area block to block can make very subtle distinctions in value. Things like which home will have a sunny back yard or why the home that sold last year for $30,000 more was worth it because of the top of the line kitchen and bathroom remodels that the previous owner had done before being transfered to Atlanta. Endless factors of value from views to traffic flow to amenities to odor to landscaping to knowing of motivated below market sales on prior homes is the kind of knowledge that a good local Realtor can bring to the table. No online system will be able to match this ability any time soon... if ever.


In the original post Sophie Gonin used the example of travel agents because their function as order takers has diminished but they are still valuable for their consulting expertise on more complicated itineraries. I use the example of the online medical sites which are such a great resource to learn from. They help people figure out when they may need a professional and when they may not. But no matter how good the sites are, a good local physician is going to know what viruses are circulating, what antibiotics are most effective against a bacterial illness and be able to determine which you have. The professional has training and experience to recognise complications that someone who is not working in the profession daily might easily overlook.


Many people who think they have bargained a great deal for themselves, in real estate or anything never realize that they really didn´t because they don´t have enough information to do so.


I took the National Association of Realtors long and intensive Certified International Property Specialist curriculum during a couple weeks in Bangkok, Thailand during January 2006. The other Realtors from the U.S. there were elite, smart, experienced and skilled negotiators. The group went to a floating market set up for tourists outside of Bangkok as part of the cultural tour that was arranged by our hosts. Upon returning to the bus, one of the participants was very happy with the souvenier that had been purchased for 150 Thai Baht (a little more than $3.50 at the time) from the 500 Baht asking price. It probably would have sold for $20-$25 it the states if you could find it. It was nice, in fact I had bought the same item for 100 Baht.


Obviously my colleague overpaid by at least 50%. Why? My savings likely wasn´t because I am an inherently better negotiator. I had better information and local knowledge. I have maintained a second home residence in Thailand since 2000, my youngest daughter was born in Bangkok, I was experienced in buying large quantities of handicrafts for export from Thailand, I currently grow trees in Thailand to offset the paper I use in my practice. I know Thailand well. In fact, as a convenience, I knowingly paid 20-25% more than it was possible to find that same item elsewhere in Thailand.


No one who knew what I had paid told our gleeful colleague because it was a once in a lifetime purchase, nothing would be gained, no usable knowledge gleaned. It just would have made them feel bad and enjoy their souvenir less. I think this is what can happen when someone does online research and all their own footwork, then seeks out a discount order taker for the transaction. They have a perception that they have made a good deal and saved money so that becomes their reality.



  • August 21 2010
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Profile picture for DavidPlush
Absolutely not!! We know how to decipher all of this information to help our clients lives their best life!!

Best,
David Anderton
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  • August 21 2010
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Profile picture for BetsyPepine
Not worried.  Our roles and the value we provide continually are redefined by technology but technology also makes us more valuable.  A home is generally a person's largest asset and I believe there will always be a market for quality real estate consultants so long as we stay on top of the evolving industry.
  • August 21 2010
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It is the same as asking are your worried that the internet will replace going out to fine dining.
  • August 21 2010
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I am not worried at all. Zillow has done a terrific job of branding themselves. However, when I go on a listing appointment and sellers tell me that they pulled up their own comps on Zillow, I sometimes have to burst their bubble. I think Zillow is a fine site to market my listings, but sometimes the sales prices or comps they have are inaccurate.

I agree with Nathaniel...we are in the people biz. We cannot be replaced by a website.Buyers and sellers still look to us as Realtors because we provide an invaluable service to them.
  • August 22 2010
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Im not worried because there are so many intracacies.  thats like having a travel agent that comes along and argues for you to get a better seat,  tells you everything about all the restaurants and negotiates a discount for you,  carries your bags, etc. 
  • August 22 2010
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Profile picture for broker_GRI
The Zillow conversation has been going on for years and RedFin uses agents to facilitate all of their transactions.

The industry will change, as it has since the beginning. Some agents will evolve and thrive with the changes, some will be phased out and some will continue to business the same as they did 20 yrs ago and.......still thrive.

Have you ever used a site like Expedia to book trips with consistently good results? Sometimes they get it right and sometimes...
You end up in an awful Motel in downtown L.A. after paying $150+ a night for what was supposed to be a decent room close to the Long Beach Convention Center.......realizing exactly how far you are from where you are supposed to be when the cab fare is $80....one way

Not worried.........excited about the potential
  • August 22 2010
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Theres so much info online on a home, but the local boards will never allow non licensed agents to access the properties. I actually think it makes our jobs easier because the clients nowadays already knows what kinda of home they want. All we have to do is open the door for them and draw up the contracts.  Plus, we don't even need to waste paper now with the e-signatures. 

Nice topic though. 
  • August 22 2010
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I'm not concerned because Zillow is so erroneous in all aspects of Real estate in my area of the country that the sellers and buyers need us more than ever.  Zillow estimated one of my sellers property value as $499k and in no way will it ever bring $399k.  buyers are constantly contacting me regarding listings on zillow only to find out they have been sold or off the market.  I keep the buyer and tell him he doesn't need Zillow ....he needs me!
  • August 24 2010
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Profile picture for Doug Emde
I believe our job is changing and will continue to evolve.  There is now too much information on the internet and our job is to provide a filter for our clients.  No need to look at 10 different sites for the same information about the same house.  That's our job to be the guide for their safari.
  • August 26 2010
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Yes.............
  • September 06 2010
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Profile picture for Johnnie Reno
I am not worried Zillow and Redfin will replace me.

However, it is clear that these sites make the process of home-buying more efficient and fewer real estate agents will be needed.  As in other industries where efficiency and technology have had an impact, many real estate agents will move on to other careers (this has already happened in a big way, and will continue to happen) and fewer agents will be needed to provide service to buyers.

You will see that there will be pricing pressure and commission rates will fall as, on average, the remaining agents will sell more homes.  Reduced commission rates will lower transaction costs and actually tend to, over time, increase the transaction flow.

Many agents who do not want to acknowledge these facts though they know them to be true.  Change is scary and almost always has some negatives associated with it.  We no longer have a milkman that comes to our house weekly to deliver milk but somehow we survive.
  • February 01 2011
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Profile picture for Connie Klemme
not worried.
  • February 08 2011
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Profile picture for Connie Klemme
I know your post is old and I've already replied to it once as an old post.  but I think it still gets views and this was a topic discussed today.   Here's how I see it.  

As long as I offer value I am not likely to be replaced by a tool.   Therefore my goal is always to keep up and grow with the tool.  In any business there is this fear and the real possibility of replacement.  Sometimes the tool does replace the person, sometimes we just think it did and find out otherwise.  The person that stuck around and learned to co-exist with the tool makes it, those that fight against progress tend to loose.  I never want to be in  a profession that has to defend it's existence - if I'm not needed, then natural selection will come into play and I'll go the way of the typewriter or the cobol programmer on my own, fighting that will just prolong the death.  Right now, I'm still needed.  I'm not worried.  If the day comes when I'm no longer needed, I'll do something else- afterall I was doing something else before I started this.  People start new professions all the time.  The need for excellent Real Estate agents still exists, the key is to work for excellence.
  • February 08 2011
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Profile picture for Blue Nile
"The person that stuck around and learned to co-exist with the tool makes it," -

I know a draftsman that kept up with the change and learned to run the computer drafting software, and kept up with the latest versions...

But then the company he was with last started scanning the red-line mark-ups in the evening, E-mailing them to the Philippians, and having the completed CAD drawings back in their E-mail in-box the next morning due to the time difference.  And all that computer drafting was only costing the company $200 for an entire week.

There was absolutely no way that any local employee could compete with that as that is even below minimum wage!  And of course they don't have to pay the payroll tax or other "labor burden" either (time off, sick pay, holidays, breaks, disability insurance, health insurance, retirement plans....)

Of course it is different for those of us in "licensed" professions, but how long will that really last?
  • February 09 2011
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