By Chris Seepe

Several Canadian real estate industry pundits recently said that we won’t recognize the Realtor five years from now. None of them said why. Here’s why.

High-tech companies are pouring billions into next-generation technologies for real estate. Do an Internet search on “proptech” and find out which companies are looking to make Realtors irrelevant and racing to win this multi-trillion-dollar business. None are talking about the Realtor’s future role and some are implying Realtors won’t be needed.



Then research “blockchain”. This technology is doing for “value” transactions what the internet did for information sharing. The internet was created to move data instantly between parties worldwide around a design foundation of reliability, which was naïve given the pervasiveness of viruses, hacking and fraud. Yet a value transaction such as clearing a cheque, wiring money or closing a real estate transaction takes days or weeks.

Blockchain is a peer-to-peer (think consumer-to-consumer) transaction technology that is removing the need for traditional trusted entities like banks, lawyers, government financial policing agencies, accountants, mortgage brokers and Realtors, in all types of value or asset transactions – money, artwork, patents, music, vehicles, property – between two parties. Combined with artificial intelligence, cryptocurrency, smart contracts and the internet, blockchain is already seeding a worldwide decentralized ecosystem for value exchange without need for traditional trusted entities. It’s facilitating such value exchanges at a fraction of today’s costs. Soon, real estate lawyers’ fees, mortgage agents’ and Realtors’ commissions, banking fees, possibly land transfer taxes and even the traditional land registry will diminish significantly or disappear.

Zillow CEO Spencer Rascoff announced in September that Zillow will aggressively embrace blockchain. If blockchain means directly connecting buyers to sellers, what is the Realtor’s role within Zillow five years from now?

Zillow-like companies need Realtors today because they don’t have the sales force to populate their listings database. But once consumers learn and appreciate the convenience, low cost and worldwide market reach of a peer-to-peer listing service with a built-in trusted entity (blockchain, not Zillow), artificial intelligence property pricing, auto-managed and executed agreements of purchase and sale, encrypted currency like Bitcoin, instant mortgages (Zillow offers “mortgage origination” via its subsidiary, Mortgage Lenders of America), and a technology infrastructure that is “immutable”, consumers will flock to these online services to manage the end-to-end process of selling and buying a house.

What’s a Realtor to do? If you give your listings to an online listing company, you could be contributing to your own future business demise. If you don’t embrace proptech, you’ll definitely find yourself without a career within the coming decade.

Will Canadian organized real estate save the day? Do you think spending millions of membership dues to limit the publishing of certain data outside the MLS or registering trademarks will make one iota of difference?

CREA’s and TREB’s 2016 revenue were each under $40 million. CREA spent $500,000 on technology; TREB spent $15 million on computer technology. Zillow invested more than $100 million just in R&D. Amazon, Google, Microsoft and Facebook, which have all stated they want in on the real estate business, spent $16.1, $14.3, $12.3 and $5.9 billion in R&D, respectively. CB Insights monitors real estate tech markets. It says newer residential real estate technology startups have focused on mortgages, direct-home buying and title and closing. Commercial sector startups focused on data, valuation and analytics, investment crowdfunding and energy management.

How many commercial listings do you find on the MLS? The commercial real estate old boys’ network will also take a beating. What developer or property owner needs a Realtor if they can directly access thousands of small investors for any one project via crowdfunding and provide them with myriad analysis tools and information in order to make an informed decision?

Realtor.ca and the traditional board-level MLS as we know it today will become irrelevant within a decade.

Opendoor, a startup, raised $725 million and is valued at $4.4 billion. It and Zillow flip homes with the press of a button. Point.com empowers homeowners to sell small fractions of their home equity to investors. WeWork is turning office space into real estate-on-demand. Slock.it offers a smart lock that opens when contract conditions have been met and enables anyone to rent, sell or share any asset without a middleman. OpenBazaar is a free online marketplace where you can create a store and sell anything. It’s not a company or organization. It’s open source software that nobody controls.

Realtors are intended to be “trusted” middlemen. What a future Realtor’s role might be requires a separate article but, with absolute certainty, it won’t be gatekeepers of MLS data. And the commission income stream will drop precipitously.

Whatever the role, if you’re not tech-savvy – social media, online advertising, blogging, email drip marketing, aerial and 3D video, social graphics, conversion rates – you’ll consistently lose to those who are.

58 COMMENTS

  1. I am not sure that I understand exactly the problem. All those are tools but as realtors we don’t sell our exclusive access to some tools, we sell services.
    If I want to sell my house today I will ask my neighbors and I will find out what the houses on my street were sold for and I will price my house similar. After that I will put a sign in front of the house and an add on kijiji and that’s it, the house will be sold, that is the base of the process. Zillow or AI, the houses on my street are the closest comparable and access to that information was always easy and in the same time once that I will advertise on the local site (kijiji or craigslist) I will reach a lot of buyers looking for my house.
    A Realtor doesn’t have better tools, I really don’t think there is something (or was) that an agent can do and a home seller can’t do.
    What he brings on the table is expertise, network, knowledge and human support. That was before and will be the same in the future.
    I would compare this (up to a point) with the DIY culture. You can buy the paint, laminate or kitchen cabinets, you can rent the tools, attend seminars or watch youtube videos and do any renovation you want in your house, very easy. In the same time, all the handy guys or contractors that I know are crazy busy, which means the DIY options didn’t put them out of business.

  2. #ProTip Zillow will pay any REALTOR in Canada a Million Dollars if they can simply explain how house prices rise or fall.

    The Prize is offered yearly by Zillow and remains unclaimed by the Million Plus REALTORS in the states….why…because they don’t know the answer.

  3. This article does not share any understanding of the human dynamic and assumes everyone will want to learn in fine details how it all works. They also underestimate the level of concern and fear people have especially over such big ticket items. Sure there will be those that latch on and it all might catch some traction but this will NEVER replace trusting and value added advisory relationships.

    • Actually, that’s not correct. A common theme of misunderstanding through many of these comments is that I (the author) overlooked this or that. The article’s title, focus and message was about what the realtor WON’T be. Perhaps the operative word ‘won’t’ should have been ALL CAPS but online conventions generally treat that as YELLING, which would be inappropriate. When or if there’s a follow up article of what the future realtor MIGHT (not WILL) be, your points, along with others here, about consumer incapability, fears, local knowledge and the human dynamic are all valid, if not pivotal points for consideration.

  4. Chris,

    I love this piece.

    I have been stating these ideas for a while but I think realtors will need to be more savvy than:
    “social media, online advertising, blogging, email drip marketing, aerial and 3D video, social graphics, conversion rates”.

    Realtors should be looking and approaching their brokerages and understanding how they can get on the blockchain. This can include but is not limited to LPGP’s structures, angle or VC investing, etc into the brokerages.

    Brokerages should be looking to become a “one stop shop” for homeowners. They could loan home buyers the money for their house and take a small fee (smaller than the banks) to recoup money and use it to build and leverage their brokerages on a larger scale. This will keep realtors working as they could broker these deals and also take a small percentage of that fee.

    Not only that but CRM’s, pipelines and sales funnel will be substantial to those agents that want to thrive and continue to stay ahead of the curve. For the first time ever large players are coming after the real estate sector – change is coming.

    • Being an expert in “Silcon-Valley-speak” (your site) does not necessarily apply to being an expert instructor as a real estate expert. In order to apply the tools of the new-age digital world in your courses, first the rules of the road, so to speak, relative to real estate (worldwide? I see your site translates in German?) and legally operative finance laws and modules governing the industry currently must be adhered to.

      The concept sounds interesting and even useful, but in the province of Ontario at least (you are in BC? but working internationally?) it is illegal.

      Perhaps study the mortgages world before making such suggestions, as new entrepreneurs seriously might take for granted what you imply is actually doable, and get themselves in a peck of trouble.

      Not criticizing. Just points you might not realize that could create issues you might not be aware of. Or perhaps the mortgage world laws operate differently where you are located. No matter where, real estate is very “local.” And rules vary place to place.

      It’s very possible crypto currency such as Bitcoin and others eventually will be the way of the world even in real estate. What’s to stop creating a whole new crypto currency from being created, such that is industry-specific, such as for use in real estate transactions only? Some advanced, smart mind might already be considering such (to be acceptable internationally)…

      With respect
      Carolyne L 🍁

      • Thank you for the respectful reply, Carolyne. I live, work and play in Ontario and am a broker of record. The byline at the bottom of the article indicates this along with a ‘416’ phone number so I’m unsure how you concluded that I was writing about a local (Ontario) issue from another country. Separately, as I suggested, you might consider doing a little online research. I did a very quick search and as of March 2018, there were 1,658 cryptocurrencies according to investing.com’s current list. At least 10 of them are real estate-specific.

    • Thank you for the thoughtful reply. Please consider reading my response to Kevin Lynch immediately above. (I think you meant ‘angel’, not ‘angle’.) And I agree with everything you wrote. The limitation on the word size of the article precluded doing more than touch on a realtor’s future role. That requires an article on its own.

  5. Buyers and sellers are not smarter! Certainly they have more DATA but that alone does not make them better informed. Unevaluated data, is simply that – raw data. To determine the relative value of something requires first a thorough knowledge of the subject in general, a personal examination of the particular subject at hand and (ideally) a personal examination of the things which one is comparing the subject to. So to say, one has the “data” (only) and is better “informed” is absurd.
    Also grossly uninformed are the “wandering realtors” who trade in real estate all over the place? Yes, I know it’s “legal”, it just isn’t ethical or professional as one can’t possibly be well informed about the various elements of real estate in a particular locale (like value, for example), dealing in many, sometimes a multitude, of locales.That takes years to learn. I’ve been beating the drum about this latter for years – mostly to deaf ears.
    So to those who would further this “distancing” of consumers from true (not purported) experts, there are some of us who can see through this sham and will speak out against such idiocy and to those realtors who help foster the desire for such new “improvements” by their lack of professional conduct with their charges, the buying and selling public, I say shame on you; you are a large part of the reason our industry is in trouble.
    ,

  6. The idea of technology taking over the need for a realtor is laughable. No it won’t take the job away, it will help the realtor do their jobs more efficiently. Look how technology has made a realtors job easier now, then in the 90’s, online advertising has taken over the paper advertising. The only thing taking away from the realtor is more realtors, the hot market over the last 2 decades have made people want to jump into the business.

    The only people who think it’s going to take over the realtors job are people whom are extremely tech savvy. Remember many people aren’t that tech savvy, I have many clients that want everything on paper still as they trust it more than online. These are millennials to boomers and in between, not everyone is embracing technology. You cannot trust AI to price a home properly, as every home is different. If people were going to just trust each other, realtors wouldn’t be needed to begin with.

    • To your point, “If people were going to just trust each other, realtors wouldn’t be needed to begin with” … that’s precisely why ‘block chain’ will become pervasive … because it provides the trusted entity between two strangers in a consumer-to-consumer transaction. Research about how financial institutions are scrambling to figure out how their ‘trusted’ role is being globally challenged. Block chain is the underlying technology behind BitCoin (cryptocurrency). Once again (see earlier comments), I don’t know why people keeping coming to the conclusion from this article that I’m saying realtors will be replaced by technology (and why they keep laughing … maybe it’s a nervous reaction). Read the article again. I’m saying the various cited ‘proptech’ disruptive technologies will fundamentally change the role of the realtor and the services they provide. And, because the education requirement will rise significantly, the number of realtors will likely drop significantly.

    • Yes, I agree, most people are not tech savvy. Using messenger, facebook, and texting is not tech savvy. Most of my transactions are face to face meetings, and contracts are reviewed in their paper forms. It’s been like that for over 20 years, considering all of the technological changes we have seen in our industry. That is why this article is over hyped and laughable.

  7. What a significant game changer that will be. Only one thing is constant and that is CHANGE. Like it or not, we will adapt.

  8. I remember when the internet was touted as a game changer agents boohooed the whole notion. It was a major game changer, new generations of agents embraced it as did the public. So too will it be of blockchain real estate only BIGGER. Artificial intelligence will deliver to our hands far more information faster that a whole geographical areas real estate membership could.

    From electronic checkouts to facebook, face to face relationships are becoming a rarer occurrence in most every aspect of our lives.

    The best way to preserve our relevance is to make it understood that the MLS® is not a ‘service’ it is a ‘SYSTEM’, a system designed by REALTORS® for REALTORS® (not the public) to share information collaborating toward achieving their mutual clients objectives. The MLS® is a neworking system. Zillow is a business ‘service’.

    The job of a REALTOR® is 1.) to educate their client to make informed decisions and 2.) Check emotion at the door and bring logic to the table. Zillow can likely match or better #1 but not likely do much with regard to #2.

    Finally, Zillow knows how to win at the game, appeal to your greatest weakness. Zillow will provide you leads for a price. Unfortunately too many are willing to pay for such rather than do the hard work involved in finding their own. We’re all looking for that magic silver bullet, the goose that laid the golden egg. And we all know how that story unfolded.

  9. Something I’ve noticed is that realtors never look for “solutions” for their clients, they look for a seller or a buyer. Note, there will be no seismic shift to AI in real estate over night – however millennials and the adult children of seniors and boomers alike are smarter than ever and embrace technology. Also, given that although I would use a Realtor to buy or sell real estate (I do not have the time or inclination to do the selling & advertising required to get top $$$) some consumers simply cannot fathom paying 4,5 or 6% + HST when selling their home. All this talk I read in the comments about defending their “business” and that for 20+ years things have been peachy keen, isn’t that a sign/indication that things must change? The only thing that remains constant in business is change! One should work towards serving clients and defending their equity vs whether or not AI will affect an agents business. Perhaps a healthy blend of AI and good old fashion good customer service will be the deciding factor in who wins when the dust settles.

    • Yes, I am one of the realtors that has been in the industry for over 20 years. Personally I am working with a more educated buyer and seller, that is the biggest benefit technology has brought to consumers.
      Consumers having access to data, stats etc……has made them more comfortable with the sale and purchase process, however consumers trust us and work with us because they want the job done right.
      Why do you hire a plumber or a car mechanic and pay them $100/hr, because you want an expert in that field, and the same applies to real estate brokers.

      • Congrats and good on you for choosing to work with a certain percentage of the population… However, there are a batch of consumers just waiting on the sidelines to buy and another batch of sellers waiting to list.
        These two groups are using technology right now to Google their local billboard advertising agent, the flat fee agent and their cousin who is newly licensed. AI will streamline all this and help Canadians truly think before they sign on the dotted line. I maintain Realtors will continue to bring value to the deal, it’s just that they must be ready for the influx of new services and service providers that are eager for a piece of the pie.
        This is different from a plumber or a mechanic – a sale of a home has someone’s hard earned equity involved and they are gonna want to protect it before agreeing to pay a commission of any kind.
        That’s where tech comes in – Johnny and Susie seller are going to investigate all their options.
        It cuts into their net balance at the end of it all.
        Another piece of the puzzle is the last few years have been great and investors, innovators and disrupters feel Realtors are a target due to the lack of solution based selling – a true test of an agents abilities is when the market is down and one must spend THOUSANDS of dollars on ads and social media influencers to get action and get that 1st offer on the table – not just price reductions. That’s when homes sell for market value and not for a penny more.
        Happy selling!

      • Some consumers trust some realtors but go ask your board, brokerage, RECO, OREA or CREA about whether consumers in general trust realtors in general, which is what you were saying. If what I’m saying is true, then block chain is offering the immutable trust element that most consumers find missing in our industry. Research ‘proptech’ and then come back with some informed comments.

  10. There was a prediction that Travel Agent profession will disappear with advance of computer-savvy millennials. Turned out that even computer-savvy millennials now are going back to Travel Agents. Check the stats.

    • “There was a prediction …” … How about a specific credible source? But let’s use your example. It’s a good one. What percentage of total travel bookings of every kind is done directly by consumers through online websites? Online booking revenue surpassed travel agent booking revenues in the late 1990s. Travel agents are a shadow of their former glory and are relegated to specialty services and to clientele who don’t have the time or inclination to do their own bookings. However, the vast majority of bookings are done by cost-conscious consumers. And I never said realtors would disappear. I said they wouldn’t be providing the same kinds of services they provide today and the services they do provide will not command the level of commission income currently enjoyed today. Of course, there will still be realtors but I believe consumers–not RECO, RE boards or brokerages–will drive up the level of education requirement substantially beyond the 5-course (7 to 10 weeks of training) limit we see today. Ironically, if that was to happen it would not only drive out a lot of kinds of MLS-gatekeeper realtors we have today but also substantially raise the bar of professionalism that consumers feel is so low today.

  11. What’s new?? , there is always someone trying to take a jab at the real estate industry and wanting to make it “better” , consumers will try and will go back to doing things the traditional way . It was said that grocery stores will seize to exist when online grocery shopping was introduced , they are busier than ever . FiveWalls tried making realtors to bid for their business, there is no mention for FiveWalls anymore , last week some tech guy came up with an app that also wants realtors to bid for their business, there is always something , and any tech company could come up with a solution to a non existing problem just so they can drive traffic to their websites . Bottom line is people are always willing to try new things ,no one can stop that , and it’s up to the individual to determine whether there was value .

  12. Real Estate transactions are infrequent, complex, considered, high-value, and often stressful. This is precisely the kind of transaction that needs a personal advisor – a real estate agent. We have said REPEATEDLY that we believe that agents are essential and will remain central to the real estate transaction. It’s needlessly sensational to say, “commission income stream will drop precipitously” or imply that agents will be pushed to the sidelines. We don’t believe that.

    Yes, we are investing hundreds of millions of dollars in R&D to address the pain points that both real estate professionals and consumers experience in the transaction. Yes, as an industry we need to embrace what technology can do for our businesses. And that’s what great agents and brokerages have always done – they reject fear and embrace innovation.

    • I’m afraid I can’t buy this response. It’s a fluffy marketing answer about how great realtors are. BTW, in Canada agents and brokerages are the same thing. This is not an issue of fear. I raised points about specific technologies Zillow is employing. You deflected this. Explain, for example, how block chain won’t take out trusted parties like the realtor or how buying a national mortgage company won’t cut out the mortgage broker. Better still, explain what Zillow sees is the realtor’s role in 5 to 10 years. Anyone that understands the underlying ‘technologies Zillow et al are deploying AND has an understanding of the Canadian real estate market will see trends and significant business disruptions. Isn’t Zillow, after all, a disruptive technology company? I think that would be difficult to deny. And if that’s true, and if the Zillow believes that the role of realtors truly won’t change, then what’s left to disrupt?

    • What value does Zillow bring to the table for the industry? Another advertising medium, what more? Leads? REALTORS® are networkers, we use the MLS® to share our product with collaborating agents as we seek to fulfill our respective clients objectives. How do we get clients? The best is referrals from trusted advisors. Trusted advisors? Fewer and fewer are face to face. More and more are such as Google reviews or market dominance. Either way there’s work involved and no silver bullet or Golden Goose.

      Client education? I’ll grant you that Zillow is ahead of us on that and that is a tool of value to the industry as well as the consumer although, for the most part, that information is readily available from a host of other services that are more reliably not competition, but rather proven service providers to the real estate industry.

      REALTORS® are educators, we provide the education that our client can make an informed decision. We don’t (shouldn’t) pressure them into a particular decision but rather travel with them toward that best decision for them as we learn more about them and teach them relevant facts along the way. Artificial Intelligence, I am quite sure, will advance that it will be able to do quite a good job of that. A better job? Maybe a more consistent job of it in terms of objective fiduciary duty.

      A few bad apples get most of the publicity which paints us all in a diminished light and hobble us with restrictive legislation. Most of us know that our reputations are our brand and guard it by providing a high level of service that garners respect and referrals. My clients pay me two ways; 1. The remuneration I earn and 2. The referral of family and friends. What goes around comes around.

      Will the real estate industry change? Of course it will just as most every other industry will change, just as the industrial revolution changed our economy so too will the Information Age which has only just begun.

      In any event I look forward to the changes ahead in the 5 to 10 years remaining as just as has been the case over my 25 years in the industry thus far.

      Shift happens, learn to ride the tide.

  13. Thank you for your over hyped and out of touch thoughts. I needed a laugh this afternoon. LOLO ……for over 20 years that I have been in this business, I sometimes come across amusing article such as yours. The reality is everytime a new technology comes into our real estate industry, some that are out of touch and do not work in the trenches always make forcasts and predictions about how the realtor is not going to be needed in the future. Nothing could be further from the truth. Over 98% of real estate transactions are done through a realtor.
    Still laughing……LOLO

    • Lots of character assassination, deflection and condescending remarks but, like most of your posts Rita, they’re remark shot from the hip without substance, research, constructive commentary or thought. Where on earth did you get “98% of real estate transactions are done through a realtor. Even the Competition Bureau, which had to fight a court case, stated an ‘estimated 80%’ of transaction go through the MLS. You imply that this statistic is somehow relevant. My point is, whatever that number is today, it’s not going to last. All you’re saying is ‘I don’t agree’ but you provide no source for your claims and you resort to putting people down for offering an opinion. So much for your respect of democratic institutions and free speech. The article provided solid facts and details for consideration. You can disagree–that’s the whole point of these forums and comments but to simply chastise someone else’s point of view is narrow-minded. To write condescending remarks is immature and only demonstrates an inability to discuss issues intellectually. At least I’m trying to raise issues that could be of concern. So, I suppose all we can do is see if you are still LOL five years from now.

      • Chris, your piece was an elevated look at the state of affairs regarding tech and real estate…
        I stumbled upon this site and this article by happenstance and liked your article as it resonates with my ideas regarding the future.
        Remain calm at all times as I feel the agents here are as equally emotional as their sellers and buyers. I may regret saying this – but, I blame the consumers for paying the fees they pay when listing… over that last 8 or 9 years homes in the GTA have been selling like hot cakes. I can appreciate that a buyers agent rips it up and down town showing their heart out to homes listed by the local “star” who has won over people with their slick advertising. I personally don’t buy it.
        I negotiate a rate I feel comfortable with and ask for a business plan that an agent will execute to get me 100% of what my home is worth. When buying, I want an individual who will not steer me one way or the other in regards to my wants and needs.
        Tech will remove a lot of the above by giving smart consumers all the info straight up before agreeing to move forward, thus diminishing the role – not eliminating the role of an agent. I can’t help but think that in the GTA one day (might be 10 or 20 years) a Realtor will have to be a consultant vs an agent.
        I gotta tell ya’ I love the passion in this forum and wish both consumers and agents mutual success in their real estate endeavours!

      • I guess you have nothing better to do with your time, hence you are debating with your useless posts that do not serve a purpose.
        I think everyone should stop worrying about “the future of realtors” and just carry on with their job. That is the way I have worked in this industry for over 20 years.
        Change is constant, every industry is changing because of technology, so what. We don’t need hear predictions and what the future may hold, they are just opinions which do not mean much.
        I think I have a solid foundation from which I state my opinions. I owned/operated my own brokerage, I have written 100’s successful transactions, never have I had any ethical issues, I volunteered on over 8 committees and have a firm understanding of real estate markets all across Ontario.
        Let’s focus on working instead of making far fetched predictions.

  14. Take into account the reputation of realtors and you’ll see how a lot of people will take advantage of any technology available to avoid dealing with them.

    • Dear James: I’d really appreciate if you can clarify your comment about “the reputation of Realtors”. What EXACTLY do you mean by that ? Maybe I’m wrong, but it seems to me that “taking into account your words”, you have NO CLUE AT ALL about what realtors do for their clients and all the expenses they have before getting a commission cheque (if they get one)
      Of course, as in any profession, there are good realtors and not so good but, in any case, applying the same concept, you can also talk about the reputation of Lawyers (“they are all crooks”), Mechanics (they are all liars”), etc, etc.
      If you were so fast to send a criticism, I assume you’ll have the same speed to send an answer. Right ?

      • Ever been to Vancouver?
        shadow flipping. obscene commissions, the decades long prctice of being the “gatekeepers of information” a la “a real estate infomation cartel”…..
        I could go on but whats the point .
        You commission based lifestyle deny’s the future……one that doesnt need “middle men” snuffling up ten of thousands of dollars to “help” people buy or sell by unlocking a door and turning on the smile and the snake oil sales pitch.
        In Australia they have “auctions”.

        Time will tell who’s right.
        But perhaps you should upgrade your skills at pouring coffee.
        I hear Starbucks is always hiring…….

        • Dear James:
          In the last decade, only in Toronto and GTA almost 1,000,000 transactions were reported and, in most of the cases, each transaction involves two agents. Maybe in some of them could happened what you describe but, certainly in just a few. And the proportion is even smaller if you consider the whole Canada.
          If you apply “generality” to your ideas you’ll get the wrong impression about what REALLY happens.
          Let’s do this: While I fill the Starbucks application, you think about this again. If after thinking for a few days you still feel the same, then, what I said in my first note will demonstrate that I was right: You STILL have NO CLUE AT ALL of what Realtors do (at least 99% of them).
          Talk to some of them and they will tell you. It’s never too late to learn something new.

    • I’ve worked directly with hundreds of realtors. But yes they often work very hard- to justify their existence.

  15. Brilliantly thought out article. Congratulations to the author.

    Looks as though the machines will take over many of the routine tasks currently performed by real estate agents. Exposure seems destined to become a free service. It’s already free for buyers. If the author is correct, the proptech industry will make exposure free to sellers as well.

    Maybe the residential agent of the future will transition from the current mindset of “list to last” to one of working for buyers. And maybe our work with buyers will shift from matching buyers with the home of their dreams, to one of negotiating a better price. We all negotiate to some extent. It’s integral to any agency process. What if we made it our central value proposition?

    The funny thing is, we have the data to prove that we are very good negotiators indeed. It’s already being tracked by every local real estate Board. So why aren’t we doing the analysis? And publicizing it.

    Here’s a proven way to quantify the value of our negotiating skills. Simply compare the sales price to list price ratios across two sets of transactions. One where the buyer’s agent is negotiating on behalf of their client. The other where the agent remains silent and the buyer negotiates for themselves.

    Many years ago, Sprint Corp conducted a similar study and concluded that the value of having an agent negotiate on a buyer’s behalf was approximately 5% of the final sales price.

    We fund our local Boards to service our needs. Why aren’t we asking for this type of analysis?

    • I’ve never seen any analysis from any RE boards or the support associations that we pay (OREA, CREA, etc,) provide any analysis of what the future might be. All of these organizations are reactive and some spend millions on trying to prevent the dissemination of information that will almost certainly not belong exclusively to them within 5 to 10 years. What a colossal waste of money that could have been spent elsewhere.

    • Micheal some interesting thoughts. Buyer do need more protection and perhaps there will be a movement to do away with dual agency in the future. Unfortunately there is a a great deal of resistance by Realtors to prevent this from happening. Realtors do understand it is very difficult for an agent to negotiate on behalf of a buyer or seller if their broker is also representing both parties, but are hesitate to make changes. Making DUAL AGENCY illegal would be a good start to changing the future of real estate for the benefit of consumers. Unbundling real estate fees is going to change the industry. Changing the traditional commission model will be one of the biggest changes to come to the real estate industry in the future. Today’s model requires that in MOST situations the seller sets and pays both sides of the commission. This does not make sense. In the future buyers will hire their own agent and set their own fees and they will not be set and paid by the seller or seller’s agent. Although many buyer’s agent contracts allow for this to take place today, most agents will inform their buyers that the seller will pay their fees suggesting that their services are FREE. We know that is not true, but it works. So what is the future for this wonderful business? Are you ready for the real changes?

      • I believe the traditional reason the seller paid both sides is that the money is all with the seller when the transaction completes. It’s ‘expected’ that the seller will include in their price setting considerations that the buyer rep’s commission is on top of what the property is worth, although that may have been forgotten (or accepted as standard practice) because it’s been done this way for so long. I also agree with your point on Dual Agency (multiple representation). Dual agency requires coming to a compromise where the buyer has to accept paying more than they wanted to and sellers accepting less than they wanted.

        • Chris

          There is no normal. And if everyone is honest a transaction can come together without problems.

          Back in sub-agency days, I annually double-ended typically 60% of my listings, or office listings, or branch office listings. Year after year after year. Seller paid 6 and 7 points. And I was never asked to work for less. They knew “who” they were hiring and my track record spoke for itself. That’s the secret. Develop a track record.

          Then came buyer agency. When I sold an MLS listing under the new buyer agency, and many REM readers know my history, my buyer agency fiduciary duty was to my buyer. I owed nothing to the MLS seller except the Duty of Care.

          The buyer agency contract said he would pay any differential between what the co-op brokerage was offering and what my chosen fee was. I only had one client who couldn’t quite decide, but then agreed.

          This buyer’s remarks after closing speak to this topic. Here is what he wrote, in part, as his thank you letter (the whole letter is on my site at Carolyne’s Clients Speak): “We are thrilled with our purchase . . . and are certainly in your debt. We basically made a windfall of 10’S of thousands of $ in one night due to your efforts. You told me that you earn your fees and you were not kidding . . . I sensed that you were for real.”

          The law office handling either or both sides of a transaction received a special differential invoice, along with a copy of the buyer agency contract. And that extra invoice was treated as a buyer’s closing cost and the law offices collected my fees and delivered.

          I have to say that most real estate lawyers had no clue about buyer agent contracts. And I spent several years educating those offices.

          I never had a buyer agent contract customer/client complaint. Not one. I always delivered more than was expected and that is the key. The fault with buyer agency lies with the agent, not with the system. It wasn’t easily understood initially. And today, sadly, all those years later, seemingly still isn’t.

          Agents still mislead the public, stating that the seller pays all the fees, as often so too does the press: it’s simply not true that the seller pays all the commission, all the time.

          Carolyne L 🍁

          • “The fault with buyer agency lies with the agent, not with the system. It wasn’t easily understood initially. And today, sadly, all those years later, seemingly still isn’t.” Carolyn I have to agree with your comments 100%. If many agents don’t understand buyer agency, how can one expect the consumers to understand the importance of being represented 100% of the time. Why is it that after 20 + years that there is not one Exclusive Buyer brokerage company in Canada? This is a huge opportunity for Realtors. I know you are a professional Realtor and work in the best interests of your buyers and sellers, but there must have been times in the past when you were selling your own listing or a listing in your company that you felt that you may have unknowingly advantaged or disadvantaged one of the parties at the expense of the other. You state -“it’s simply not true that the seller pays all the commission, all the time.” This is probably true, but I would sure like to know what percentage of buyers today actually write a cheque to their buyer agents for their services. Not many I expect since the seller pays the listing broker the fee and the listing broker pays the buyer’s agent. This is a huge conflict. This is why I believe the commission model should change, but I’m not betting on it. Enjoy reading your comments.

          • Thank you, David. I apologize for long reply… There is no REM reply button at your comment due to the forum process, so I post as a reply to my prior comment hoping you will see it; seems the only way to continue the discussion…

            I have to say no to your question, did I ever feel one was disadvantaged over the other. Not once, not at all. I answered all questions truthfully and did not ever advise either a seller or a buyer as to what price to list at, or how much for a buyer to offer. I did not see that as part of my fiduciary.

            I saw my job as being a provider of good, true to the best of my knowledge, information by which my listing seller or the buyer could choose to make their own decisions. And if there was any discussion about what was part of my job description, I had a disclaimer signed saying the parties were not coerced in any manner as to how much money should be paid as the buyer, or expected as the seller. I was definite in my opinions in this regard. I merely dealt in facts, supported by provable data. Specific as best as could be found, relative comps.

            Again I state, I was merely the purveyor of “information” not the decider of numbers per se. That decision belonged purely to the buyer and or seller. This was particularly important with multiple offer situations: in fact it was a multiple offer situation where I quoted from the particular buyer’s thank you letter.

            For all the talking I do, I know when to be quiet. I was hired for my knowledge and expertise, I didn’t get either by bullying people. And I categorically never rushed anyone to make a decision. They had to know for certain that all decisions were theirs and theirs alone, arrived at by using solely the information I provided. I believed I didn’t have a right to a personal “opinion.” I dealt strictly in the facts, substantiated by market data.

            That’s why it’s vital to “know your (limited) market.” And know it inside out and upside down and have at your fingertips the proof at hand. You simply cannot offer such if you work all over the place even so licenced to do so. I didn’t pretend to be smarter than colleagues (there were many far smarter than me), but it became apparent that often I was more organized.

            And, clearly my people knew I was genuine and cared about their outcome. I advised as to proven philosophy and practicality and often was heard to say: if you don’t get it you weren’t meant to have it; another buyer will come along, or to a buyer, a better house to buy opportunity will present itself. I said: you “must” let the paperwork speak for you. Make your first offer your best offer if you really want the property. Don’t even think about playing games, you may not get an opportunity to negotiate further. Think if you, as the seller decline an offer, and the buyer walks away – will you be unhappy? Likewise as a buyer, if the seller refuses your offer, will you be unhappy? The resultant answer to either of these questions spoke volumes to me, as to how serious either party was. In any kind of market.

            If a property is priced properly within a given range then take that seriously into consideration, either as the seller or a buyer. Yes, I will negotiate on your behalf, but bear in mind my “duty.” If I represent the buyer then my duty is to him. Likewise if I represent the seller, my duty is to him. If in dual representation then “only” the paperwork can talk, for sure. That’s not easy. But is an absolute. I know many disagree.

            But my duty is not the same thing as my opinion (I don’t allow myself the privilege of having one). I rationalize this by saying this is not my money. It’s not my equity. Don’t ever ask me: “what should I do, accept or not” as part of the negotiating strategy. I negotiate based on facts, not emotion. I must disengage any emotion I might be inclined to reveal.

            As to your comment about a real true office of buyer brokerage representation only… Back in the mid 80’s, someone among REM readers might remember a test case: if memory serves me, the story of the day was that a franchise test case was put in place in a mall in Ottawa. They put a buyer office at one end of the mall and a seller office at the other end. I believe in less than a year they had closed both. It just didn’t work. And it was another nearly ten years before paperwork was put in place for “buyer agency” contracts per se.

            I resisted buyer agency initially in my mind. Sub-agency was so much simpler it seemed. Much more clearly defined. But as a sole operator corporation I had to wake up and smell the coffee. Buyer agency contracts were here to stay. I had to figure out a way to work within the parameters. I even got to enjoy it eventually. Even so the largest part of my business was representing sellers,

            But my choice to have buyers top up the missing percentages served me well. Eliminated confusion. The choice was always the buyer’s. But my choice was to decline to represent them. That nearly happened in the arena where I quoted the thank you letter. He understood clearly what I explained, but he had other agents running all over town trying to find him a house to offer on for more than a year, and they had never even asked him to sign a buyer agent contract, and they told him to walk away from doing so.

            Finally he came to his senses, called and said: where do I sign? I nearly chose to disengage. You read the end result. The full story including my supplementary comment is easily viewed on my site. I always added a relative comment when noting a thank you; often explaining how the transaction came to be consummated. Many took a long education-time to be done. But worth it to all involved.

            Thank you for your REM post and your genuine discussion.

            Cordially
            Carolyne L 🍁

      • “Changing the traditional commission model will be one of the biggest changes in the industry.”….It’s already here, it’s been around for nearly 10 years. Why does that surprise you? I would guess that because it’s not so popular. In my experience well informed consumers want the best and trusted Brokerages in the field.

  16. When ordinary people (the masses) sitting side by side “talk” to one another by “Txting,” instead of physically speaking, this perhaps is an acknowledgement precursor as to how real estate business will be done in the future using AI. Eliminating any need for personal one on one discussion, as in conversational rapport. We are merely seeing the tipping point of the zeitgeist. There’s so much more to come. We should live so long?

    Here is an example someone might find interesting. A 40-something local couple bought a three-million plus property on the coast, never having seen it. Shocking? Found it on social sell-all site best to remain nameless but well-recognized. They bought it sight-unseen. Literally. They are just plain folks whose dad ran small businesses and sold them to help the child’s dream happen.

    Turns out it is a historical property. The intent was to turn it into a B and B. The father has since put another three million into it, and every change has to be govt approved. Takes months. Even right down to needing permissions regarding removing generations-old, ancient wallpaper.

    It’s become a whale with its mouth open. Sneaking suspicion it will never get finished. Fortunately the father, nearing 80, can afford to keep feeding the whale, apparently. For the daughter it’s a plaything dream nightmare. Hard to believe but true. I know the people just a little. It’s an earth-moving experience. Typically very down to earth ultra-cautious investment people who believe in GIC’s.

    This example is likely just one of thousands: no agent of any descriptor involved. There’s a new person joining this AI group constantly. Are they more than just part of the overall group of buy/sell privately new world echelon?

    Carolyne L 🍁

  17. This article outlines the very reason that Canadian realtors should never put their listings on or sign any contracts
    with Zillow. Why would you give the control of your real estate business to a foreign country? We already pour billions into Google, Facebook, Apple, Amazon and so on. Trump should be thrilled at how stupid we are to pay these American companies.
    This article points out the future intentions of Zillow. Why would anyone sign on to a future slow death of your business?
    It is not possible to eliminate realtors in the next ten years. We have many buyers and sellers who will still need the service and guidance of a good REALTOR.
    But wake up and protect your business!!

  18. This sounds a lot like a fluffing of an article from 1980’s when computers and (ILS Independent Listing Service) and other discount brokers and online sales were going to put realtors out of business. How’s that working so far?

  19. Predictions are almost always more aggressive in timelines than reality … but not always wrong. I didn’t discount the emotional aspects of the realtor’s role in the real estate transaction. I only had 800 words for the article, which is why the follow-up article begs to be written — what WILL the future realtor’s role be? The fact that the cited technologies have been available doesn’t mean realtors have embraced them–which was my point. If you don’t, you’ll be left behind. To your point about Artificial Intelligence (AI), and to my point about doing some homework, many people think what you think and so they believe they’re safe. They’re not. In March 2016, Google’s DeepMind A.I. algorithm AlphaGo repeatedly defeated Lee Sedol, the world’s top Go player. The algorithm displayed sophisticated machine learning to win one of the world’s most complex strategy board games. Fan Hui, a world class Go player first thought one of the computer’s lethal moves was a mistake. But when the outcome became evident he said in shock, “It’s not a human move. I’ve never seen a human play this move. So beautiful”. So, AI may not replace humans but the line is blurring. Alan Turing argued against all the major objections to the proposition that “machines can think”. Notwithstanding whether you believe AI can supplant realtor services, there’s no question that the realtor of today will not exist in 10 years and its possible that the role of one changes so much that the realtor of tomorrow may not even be called a realtor then.

    • Hi Chris,

      My nearly four decades reassures me that some things never change. That specifically being, that the public, any member of the public, has a me-first destiny to fulfill. My experience has repeatedly taught me that the bulk of the population doesn’t do nearly the research one might think. Instead of investigating or researching blockchain and the use of AI, they want to know: what’s happening in “my block.” (Their block.) At best, within a few blocks of where they live.

      They want to know the current value of their property and some don’t even want to compare theirs to immediate others. Theirs is all that matters. And buyers, often sadly rely almost entirely on emotion. But they want to know their negotiator has stood in their best interest. Both buying and selling are largely emotional experiences. We are merely the messenger, the go-between. That isn’t likely to go away. The human element holds a valid position in all decision-making.

      Several generations will yet have to die off before AI kicks in on a permanent level or has the status being forecast and forewarned. Those between 25-35 are most dominate thinkers in that arena because they were born into the world of computer-think. Over that age is still the dominant buyer and seller.

      Part of the distinction is that if the foundation of the industry (that being the first time buyer) is eroded as is currently happening, it’s like the house built on no foundation. It simply cannot stand. THAT will speak to any propelled market crash and world economy attached as the adjunct supply chain weakens.

      Owners often live in a tiny brain-field radius, regardless of their level of education. They often educate themselves relative to real estate by reading news headlines so they have an overview perhaps cross-country, but when it comes to their own buying and selling experience they are totally and completely “local.” And all they really want is the truth in advertising and care very little if their Toronto home for example is advertised in Morocco. Even so there are people buying coming in from all over the world.

      If you live in Belleville and are considering moving to Cambridge for example, you are going to need the services of a local agent most likely. It’s a long drive between the two locations and there’s simply no way to learn all you need to know expeditiously enough in a relative timeframe, particularly if you have timelines needing met. And no matter who says what, there’s a lot of work involved. Even a skilled REALTOR moving from one city to another needs a shoulder to lean on. Sadly there are agents out there that will eat their own, even, to get that commission cheque.

      So I don’t think we need to be terribly concerned that the need for an agent (read “representation”) will evaporate any time soon. Perhaps back to basics might apply? But working with all the new tools (toys) at one’s disposal.

      Just my thoughts. Plain old-fashioned good business skills will always have a spot in the playing field. Being and remaining calm, cool, and collected still rules the day. Stop all the “rushing” and concentrate on one client at a time.

      And those reps will always be well-paid and hold a place of both honour and respect. Even more so if they manage to become the dominant, skilled, go-to person “on the block.” Know your “territory” well and stop trying to be all things to all people. AI and blockchain are merely support tools. You still have to be knowledgeable about “your area.” Concentrate on Tom Peters’ famous words: “Stick to the knitting.”

      Carolyne L 🍁

      • Thanks for posting this detailed and thoughtful reply. It’s certainly better than some of the posts that rant without substance. As you’ll see from my other replies, I agree with you 100% that there’s a role for realtors in the future. And I agree that local knowledge will be a critical element that online services won’t be able to provide. I further agree that consumers won’t know (or care) about black chain just like they and realtors don’t care or need to know about TCP/IP, which enables just about everything we all do on the Internet today. I mentioned block chain only because it is THE invention that will enable aa transaction to be trusted between two strangers, which was never possible before and which was always previously handled by realtors, lawyers, lenders and gov’t. I disagree that it will be several generations … I say one at the most. To your point about whether real estate transactions will remain primarily local, that is, between two parties in the same local area, that remains to be seen. That may be true today but whether that’s because people weren’t empowered with such information before or if humans are intrinsically creatures of habit and want to stay in their local geography comfort zone is an entirely different question. Obviously, proptech companies like Zillow seem to be betting on the former. I also agree that the ‘last reps standing’ (perhaps not a fair interpretation of your words) will be well paid because they will be significantly better educated with a wide array of cross-disciplinary skills and services necessitated by these technology changes that consumers will expect of realtors, so there will likely be far less of them.

        • Thank for your astute reply, Chris. Perhaps I didn’t note clearly re “local.”

          You wrote, in part:
          “To your point about whether real estate transactions will remain primarily local, that is, between two parties in the same local area, that remains to be seen. That may be true today but whether that’s because people weren’t empowered with such information before or if humans are intrinsically creatures of habit and want to stay in their local geography comfort zone is an entirely different question.”

          Please let me clarify, which I should have done: my reference to local wherever I use that term, is in reference largely to local laws, local rules, local municipalities, and all that governs such. I didn’t mean to infer that buyers and sellers would locally buy each other’s houses, limiting the geographical trail of physically moving from one house to another.

          The import I always stress because I truly believe it – agents should develop a local area, wherever local is, skill set that enables them to be the automatic go-to person. That is making it possible to create and maintain expertise status, when agents are “working in the dark,” so to speak.

          As an example, if your base of operations is Barrie and you help a homeowner there sell because that is your area of expertise, and your home seller client wants to move to Belleville, I can’t wrap my head around fiduciary duty that comes automatically with representation, in such a circumstance.

          How can the buyer’s agent in such a continuum, “represent” in an official capacity, not knowing anything in particular perhaps about Belleville, aside from what he/she can learn on the MLS or the internet? None of which stands as a support system for helping the buyer client make appropriate decisions. It’s just my personal opinion. But it is very close to negligent representation if anything goes haywire. That is my point of referring to “local.”

          Thanks for allowing me to quantify and qualify. Always enjoy your perspective on this industry. You clearly have a dedicated interest and more than average knowledge. Doesn’t mean everyone has to agree necessarily but always worth considering other points of view.

          Respectfully always,

          Carolyne L 🍁

  20. I would hardly consider, social media , on line advertising , blogging, email drip marketing or aerial 3D video as being tech savvy. These are , and have been , services readily available to realtors for quite awhile now. One important factor over looked in this process is that the purchase of a home is largely a human emotional experience. The human guidance , weather it be a lawyer, banker or realtor, is an important part of the process. And with all this technology taking over who will ever be looking for any commercial properties? And in my own opinion AI is removing all creativity and discovery of anything new for humans. Back in 1995 I attended a conference where the speaker was preaching that in five years you will not recognize the real estate industry. Over Twenty years later nothing much has changed. Sure communication is easier , pictures and videos are great. And quite often you never meet the agent you do a deal with. But there are still open houses , flyers in my mail box, ads in news papers and buyer’s looking at properties with a realtor. This is not the first time in history that others have been trying to take over an industry with technology and I predict it will not be the last time.

    • Please consider reading the reply I wrote to Kevin Lynch further above as well as my replies to other commenters here. The article is about what the realtor ‘won’t’ be. The technologies I cited was simply a sampling, not a statement of future skill set.

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