The Age of Information
There is a proliferation of information available for free on the internet. Whether you are buying a refrigerator or a house it is possible to learn a lot about pricing while you are still in your pajamas. Zillow is fast becoming one of the first stops for buyers and sellers of homes. Their algorithms collect precise information about every single home in the United States. Their web crawlers discover an amazing amount of facts about a house, from its square footage and number of bathrooms to lot size, to annual property taxes. They then use their “bots” to assign a value or “zestimate” of the home’s expected value in the open market. All of this is being done to displace, or tamp down the impact of the licensed real estate expert. And it may be increasingly effective in lowering the use or value of residential real estate agents.
The Role of Data in Commercial Real Estate
LoopNet and Costar are attempting to provide similar metrics of data regarding commercial real estate. Whether you are seeking an office building to purchase, a land site for new construction, or a huge warehouse space for lease, LoopNet and Costar are enabling shoppers and real estate professionals to access key bits of data quickly and accurately. The efficiency with which data is available and shared at nominal expense is both an advancement and a concern. Much as Best Buy has become a showroom for a product to be purchased on Amazon, so have LoopNet and Costar enabled serious real estate buyers and sellers to arrive at a fairly accurate budget and value range for their real estate decisions. So a logical extension of these online advancements is that the commercial and residential real estate professionals are on their last legs.
Are Zillow or LoopNet eliminating the role of a real estate professional? The answer is yes and no.
Yes the real estate professional will be eliminated if they are unable to add something to the information freely available. Now that anyone can access information it would seem the Realtor’s value is diminished. In fact, it has never been more important to add value on one condition: the professional must be able to offer a unique value and level of expertise in the area of greatest interest to the client.
Why Would I Need a Broker?
A buyer of investment real estate can now use the internet to identify the most accomplished and proficient expert in investment real estate. A buyer or seller needing the best broker for land brokerage services can do the same thing and hopefully land on our page and learn more about our capabilities. And in fact this is exactly what we are witnessing. Several times a month a caller will say they found me on the internet. The typical client in the future will use the internet to “vet” the broker’s capabilities before the phone ever rings. Maybe it starts with our sign on a random parcel. Maybe it starts with asking an attorney, or accountant or business acquaintance to recommend a few names for a real estate requirement. But increasingly the calls we receive indicate the caller has done considerable research on us before we picked up the phone!
There is one thing they cannot receive from a bot or an algorithm or a free website. And that is ADVICE.
Our clients are facing major economic decisions that can affect their business, their career advancement or the value of their inheritance. These major decisions are best left to people like us that are on the battlefield every day. In the case of choosing a land broker for example, there are too many variables the bots and algorithms cannot track accurately if at all. Topography, zoning, traffic patterns, neighborhood gentrification, environmental issues, entitlements from the municipality and the myriad other details that can affect land value are the issues that matter – and these are where are our advice is worth every penny.