Last week, the National Association of Realtors, one of the country’s largest industry associations, reached a groundbreaking $418 million settlement over an alleged conspiracy to inflate realtors’ commissions. Some have said the settlement signals an end to real-estate agents as we know them. But an award-winning finance professor, specialized in housing economics, says the demise of this particular profession has been coming for a while.
Indeed, Andrew C. Spieler, a distinguished professor in business and finance at Hofstra University, likens real estate agents to travel agents. Like travel agents, realtors were once the “gatekeepers” of information. They had access to MLS listings that consumers couldn’t find on their own, so buyers had to be much more “dependent” on their agents to even start house hunting, Spieler tells Fortune.
“You just don't need them,” he says in regard to both travel agents and real estate agents. “I mean, there's still a few out there, but it's going to compress the industry.” Spieler is an award-winning academic who has won several industry awards for his real-estate research.
It’s not rocket science, he says. It’s the internet. Online, homebuyers have access to nearly all the information they’d need to purchase a home. On websites like Zillow and Realtor.com, consumers get almost all of the details they’d want to know, plus photos of the property.
Questioning the use of real estate agents was “inevitable even without the settlement,” Spieler says. “If you think about what an agent does for you, I think it's very different than what they used to do for you because so much more information is available on the internet.”
Before the advent of the internet (and online real estate marketplaces, more specifically), homebuyers had to be much more “dependent” on their real estate agents to even show them inventory, he says. In fact, it was hard to even start house hunting “unless you happened to be driving by and someone had a for-sale sign.” Back in the day, real estate agents would just print out the MLS listings (that only they had access to), or “if you’re lucky, [they’d] email it to you,” Spieler says.
“Now, that part of the process is completely removed,” he says. “The buyers are so much more informed. And to me it comes down to, ‘What am I paying for as the buyer?’”
Really, the main purpose a real-estate agent serves now is getting the transaction done with the “least amount of stress,” Spieler says. They still can be useful in situations where buyers or sellers need to make a quick move to avoid a “misstep” in the transaction.