Opinion: Do Real Estate Agents Still Matter?
May 6, 2022
With an uneasy economy facing interest rate hikes and inflation, it’s no surprise real estate professionals might feel concerned. Although homes have sold with unprecedented speed in most markets, others are showing signs of slowing down. In the middle of all of this, it’s worth asking: What is the role of the real estate professional in 2022? Clever Real Estate’s new report has some answers.
General seller expectations
Clever found that 45% of home sellers believe the housing market is in a bubble that might pop in 2022. Still, 43% of sellers think their home will sell over the asking price, with more than a quarter of them (28%) expecting to receive an offer on the first day their home is listed.
More than half of home sellers (53%) believe they’ll accept an offer within a month of listing, and — judging by other findings on the current speed of home sales — that confidence appears to be justified.
But this seller optimism masks some real fears, too. The vast majority of sellers (74%) worry that their house will languish on the market for too long, straining their finances and reducing their final sale price.
Given their fears of a market crash, many sellers are eager to complete a sale as quickly as possible — evidenced by the fact that 35% of sellers are pushing up their plans to list their house.
Accordingly, sellers are looking for a real estate professional to help them do so.
Do Realtors still matter?
Overwhelmingly, yes. Even if you’re a new realtor who earned your license during the pandemic, the results of the study are encouraging. The percentage of sellers who say they plan to use a real estate agent has grown from 54% in 2019 to 77% in 2022.
One intriguing finding from the report is that nearly 20% of sellers say finding a qualified real estate professional to sell their home is the hardest part of the sale process. So what methods are sellers using to find real estate agents?
More than half of sellers surveyed (54%) say they plan to find an agent using online real estate platforms such as Zillow or Realtor.com. Nearly half (48%) say they expect to use internet reviews from places such as Yelp or Google. Meanwhile, word-of-mouth referrals from friends and family are now the third-most common avenue for finding an agent, with 42% of sellers planning to explore that option.
One of the biggest surprises? Millennials in particular are showing a sharp spike in interest in using a real estate agent to sell their home. The cohort is almost twice as likely to hire an agent for their sale in 2022 than they were in 2019 (80% compared to 47%).
Realtors make a difference, and these findings show sellers recognize that more than they used to.
Educating home sellers
One of the most important roles that real estate agents play when it comes to selling a home is being an educational resource for sellers. This is especially important when it comes to fees — including their own commissions — and explaining what exactly they are responsible for.
In the Clever survey, only 54% of sellers know that real estate commissions typically come out to 4% to 6% of their home’s sale price. And 42% of sellers surveyed are unaware that they’re usually expected to pay the buyer’s agent’s commission.
For both sellers and investors looking to get the biggest return on their investment, an appraisal is a critical tool. However, almost half of all sellers (47%) wrongly believe the seller’s agent is responsible for appraising a home’s value.
These findings demonstrate that educating home sellers on each step of the process is still a critical need in real estate.
Advances in technology
The pandemic brought serious changes to the technology of home sales. Without the ability to physically show prospective buyers a home, coupled with a shortage of housing availability, real estate agents had to pivot and embrace technology.
In the past two years, agents and their clients have had to rely on technological tools, including virtual tours and eSigning, but more changes are on the way. Real estate trends to watch in 2022 include the rise of web 3.0 tools such as:
- Automation of property management
- Big data that uses artificial intelligence (AI)
- Increased utilization of the Internet of Things (IoT)
- Crowdfunding platforms tailored to real estate
- Non-fungible tokens (NFTs)
Think this sounds farfetched? Picture this: A chatbot answers a seller’s initial inquiry about listing a house. The seller decides to proceed with a listing, and the same chatbot directs them to a questionnaire that interprets their answers and sends the client to a realtor who is matched to their needs.
That agent then designs and launches a virtual walkthrough, with interactive features and options to get prospective buyers’ questions answered or indicate their interest. The same platform that hosts the virtual tour can also send the buyer information on potential lenders (and get the prequalification process started). And all of this is accessed via a smart speaker or mobile device.
This entire process is happening right now, possibly down the street from you, and more sellers want a real estate agent who is savvy in this technology. Why? Approximately 47% of sellers surveyed have more confidence in the power of artificial intelligence (AI) than in a traditional agent, with millennial sellers more inclined than baby boomers to trust in the increasingly popular technology.
About 73% of sellers say they would consider using AI to find a buyer. That’s up from 51% in 2019 — before the pandemic demonstrated the power and reach of technology in home sales.
Even still, millennials are more interested in hiring a realtor to sell their home than they were in 2019. This speaks to the consistent prowess of real estate agents.
The world is changing
The world is changing, but some things stay the same. If anything, Clever’s research has uncovered the remarkable potential that lies in the real estate market. The tools might be changing, the numbers may shift, but realtors remain consistent at the center of it all.
Source: Opinion: Do Real Estate Agents Still Matter? RealTrends (May 4, 2022) Tracey Velt