I came across a provocative article in Bloomberg BusinessWeek over the weekend, and, frankly, it struck at a question I’ve been wondering about myself. The internet has changed so many industries–the iTunes Store and music; Expedia and travel agents–what about real estate?
There have been a number of web players entering the space, from Trulia and Zillow to Redfin, all with slightly different models and a range of success and failure. Here are two things I highlighted in my reading:
• 90% of consumers now begin searching for real estate on the web, but
• The average commission rate to agents has actually gone up since 2008, from 5.0% to 5.4% in 2011
How has this industry defied what many might say is inevitable? Knowledge and service. It’s a major, major purchase, and lots can go wrong. No one, even the savvy and well-heeled, wants to make a mistake when so many commas are in the price.
The web is playing a role, but it’s largely shopping vs. buying.