According to a March 7th feature article by Brad Stone in Bloomberg Businessweek, real estate agents and brokers have managed to successfully weather the technology storm that threatened to take their jobs. For the time being, at least, their professions seem to be safe.
But what about the rest of the industry? Can, say, title agents continue to thrive despite the emergence of sites like ENTITLEDIRECT? If one looks to other professions that have faced similar competition, then the evidence suggests yes: title agents can survive. For instance, consumers can turn to sites like Legalzoom for legal documents or to tax software like Turbotax for help with their taxes. And yet, attorneys and accountants aren’t obsolete by any means. Still, the threat is real (think of the travel agents) and the profession must take proactive steps toward mitigating that threat if it hopes to have a sustainable future.
One of the main reasons that real estate agents are alive and well is because they exploited their existing strengths (expertise and relationship-building) while simultaneously embracing the benefits of the very technology that threatened to upend them. Consumers in the market for a new home may start their search online with sites like Trulia and Zillow, but they end them with an in-the-flesh realtor. In many ways, realtors benefit from sites like Trulia and Zillow because clients can look at homes on their own before asking a realtor to show them the ones they really like—it’s a time-saver. And on the sale side, real estate websites only help to increase the visibility of a home, thereby increasing the odds that the right buyer will find it.
Even with sites like Redfin, which allow consumers to purchase or sell homes online with the assistance of a salaried (no commissions) agent, most people still turn to the traditional real estate agent because they want someone to guide them in-person through the process, especially the negotiations and paperwork.
This paperwork brings us to the title agents. If assistance with paperwork is one of the chief reasons consumers seek the services of a realtor—and transferring titles is a big part of that paperwork—then it might seem that the resilience of real estate agents bodes well for the title agents, too. After all, a significant portion of a title agency’s business is driven by realtors’ client referrals. It’s a people business, and consumers still prefer face-to-face interaction. Of course, there’s a lot less interaction with a title agent than there is with a realtor, and buyers and sellers may not see the advantage of paying high fees for a service that they don’t actually see. It’s crucially important, then, that title agents reinforce why their services are worth the higher fees. Is it the attention to detail? Is it the customer service if something goes wrong? Where’s the value? Because buying or selling a home is such a major life event for most people, having that extra bit of reinsurance will likely keep them coming back.