Real estate discount – can the traditional model survive?

The beginning of the discount price of real estate: The creation of the Internet has had a great impact on society as a whole. It has made the world a smaller place and the intern has changed the way we communicate and do business. It has helped customers target the likes of Google and Yahoo, and subsequently put the products and information consumers want at their fingertips. Social networks such as MySpace and Facebook have made it possible to stay in touch with friends and family around the world via the Internet. As time passes, these changes and effects become more widespread and manifest themselves in alarming ways. One of the most influential industries is real estate.

For decades, the real estate industry has been defined by traditional representation, in which the agent charges the seller a commission to market and sell their home, or represents buyers throughout the entire home buying process. In the past, the traditional model was the core of the real estate profession and faced little opposition. This is starting to change. With society’s growing dependence on the Internet, creative minds have started developing new models that cater to every type of consumer. As a result, consumers no longer need to meet the traditional model of “one size fits all”, but must choose the type of service that best suits their real estate needs.

New modelsConsumers can now choose from a variety of real estate products and services. These services are known for allowing buyers or sellers to seek specific real estate assistance as opposed to the overall package. In the case of sellers, real estate agents only charge for the services they provide. For example, a seller may only want to list their home on the MLS (a multiple listing service used by local real estate professionals) for added exposure, and need some help preparing a purchase and sale agreement. Listing a home and getting it accepted with P&S will cost you hundreds of dollars, as opposed to paying a 5%-6% commission that can cost thousands of dollars. Buyers interested in owning their own home or willing to participate in the initial house hunting may receive a discount at closing. This model provides buyers with professional realtor assistance and rewards them with a portion of the commission at closing for their efforts. One company that offers discounts to buyers is SharpBuyers. They are a national real estate discount company based out of Boston, Massachusetts. They have agents all over the country who can help buyers find a home and give them an offer at closing. Another new model is real estate consultants. These are licensed real estate professionals who charge only a flat fee for certain services.

Brokers who offer these innovative real estate services are called discount brokers, discount agents, and real estate consultants. It is clear that all these new models involve buyers and sellers in the home buying or selling process. Next, these models are perfect for tomorrow’s homebuyers, Generation X and Y. These are tech-savvy homebuyers and aren’t afraid to go through the motions if it means saving thousands of dollars. Ten years from now, Generation X will generally be in their early to mid-30s. Many use the traditional method to buy their first home, while others look for new brokers. How will market share shake out in 2017? Only time will tell. It is expected that many traditional brokerages will be forced to adapt to a mixed service model, which means that they offer both traditional and discount services to buyers, rather than one or the other. This may be an important strategy if traditional brokers want to remain competitive beyond 2020. The new real estate business models allow consumers to have the best of both worlds, professional help and more money in their pocket.

Real estate and the Internet todayIn today’s world, the impact of the Internet on the real estate profession is very evident. As the popularity of the Internet grew in the beginning, many agents worried that consumers would immediately cut out of the deal. To date this has not happened. The real estate industry has come to embrace the internet and the great marketing tools it has given birth to. It also helps real estate professionals better access detailed information, recent sales history and various statistical reports. Leonard Nomura of Bentley Real Estate Group says he can’t imagine life as a broker without the Internet. The numbers are amazing. According to the National Association of Realtors, 77% of home buyers used the Internet to find their home in 2005. This is estimated to be more than 2% of buyers using the Internet in 1995 and 85% today. . According to clickz.com, 50% of consumers who visit a website intend to purchase consumer goods and services. This includes real estate, automobiles, clothing, music, and anything else imaginable.

Due to emerging hybrid service models, users can choose real estate services that were not available before. Many real estate professionals see these new models as a threat because they are believed to have a significant impact on the traditional real estate brokerage’s market share. According to industry newsletter Real Trends, alternative real estate models currently account for 2 percent of the market, but could grow to 12 percent by 2010. The transformation of the real estate industry is just beginning. Time will tell the true story of how the market shakes out, but the bottom line is this; Alternative real estate models are putting money into consumers’ pockets and you will always put a smile on their face when you show them how they can save thousands of dollars.

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