What’s Happening to the Practice of Real Estate

Few things have changed real estate more than technology. A generation ago real estate agents got a weekly book with all the listings from the Greenwich MLS. With Realtors being the only ones that had this information they had a powerful advantage over buyers and sellers. A buyer couldn’t easily find out what properties were selling for in each area of Greenwich. Sellers generally knew, because then as now, sales prices got printed in the paper, but it was a lot of effort to research these prices without one of these books.

Now buyers and sellers have most of the information that agents have on sites like Realtor.com and Zillow. Some folks predict that such sites will put Realtors out of business as sellers just post their properties online and buyers will run some searches and find the right house on their computer and wire transfer the funds. The chances of that happening are nil.

While the information is easy to find, the government and people’s demands have made the job of real estate agent much more complicated. We have a whole series of environmental demands that we didn’t have before. Issues of oil tanks, asbestos, lead paint and radon all must be checked and remediated if necessary.

Local government issues have also gotten much more complex. We have planning & zoning regulations that have evolved greatly in the last 30 years. In additions to setback and height restrictions, we have an ever evolving floor area regulation that has become a competition between developers and regulators to control how big houses can be. We now also have green area requirements and the building department has a very complicated set of water drainage rules. We also have inland wetland regulations and real estate tax issues. All of these issue are controlled by state and local rules.

The idea that someone would make a million dollar purchasing decision by looking at some photos is just not very likely and fool hardy. Now some would argue that computers are becoming so powerful that systems like IBM’s Watson, that can diagnose diseases, would end up replacing Realtors. That also is not likely because real estate is so local. The negotiation process in Greenwich and Stamford are distinctly different while the closing process in New York and Connecticut are very different. As a result you don’t have a the economies of scale that you have with a say Trulia where the programming for the website can be used for any house in the US and the site can be used by anyone anywhere in the world.

The other place where technology has clearly changed the practice of real estate is in buyers and sellers expectations on communications. Email and in particular text messages have called on agents to be much more communicative than before. Often, the younger the client the more immediate communication is demanded. Sellers want to know what buyers thought of their house very quickly. Buyers want to see new listing minutes after the come on the market and set up showings the same day.

The amount of information communicated has also gone up. Every real estate office has a high-speed scanner to convert paper to digital files that can be emailed. Photos are no longer enough, now plot plans, aerials, septic permits and building permits are all moved electronically. The job is getting faster and more complicated to provide state of the art services to the client.

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