Last week, 1000watt Consulting had a post from Joel Burslem about his aunt selling her home on Zillow without the help of an agent. She edited the home’s details; Zillow marketed it for sale, and it sold quickly, for above-asking price.
Industry voices took sides immediately. Either it was a bellwether of agent disintermediation, or it was an irrelevant anecdote.
Should agents be worried that the FSBZ will take their jobs?
There are lots of reasons to not be concerned. Like in every FSBO discussion, we can quote the declining rate of FSBOs overall. We can discuss the unique nature of the current market and the unknowns during the transaction. And we can question whether the seller received market value. The vast majority of consumers still receive significant value from their agents and plan to continue using them.
Joel’s conclusion points us to what might be a more immediate concern: the well-being of our homebuyers and sellers. Consumers often choose speed, simplicity and low prices over thoroughness and quality. Redbox’s half-rented-out, $1 DVD kiosks survive though rental stores with hundreds of better choices for $5 went out of business. We book reservations on Hotwire without even knowing the hotel’s name because we can save $20. Parents entrust their inheritance to a will that they crafted on a legal website for $99.
As these transactions get incrementally larger, it’s obvious that technology shortcuts are not always the best deal for consumers, but they’re still attractive. We owe homeowners who are going to sell without agent representation a full explanation of the potential drawbacks. The faster they can list their homes without professional guidance, the faster they can fall into legal trouble and potentially lose significant money.
Homeowners don’t have to use real estate agents, but they should understand why so many consumers do. Before clicking “Submit” to list their most valuable asset on a website, they should be educated. Our online partners in the industry should be working with us to do just that.
As to the likelihood of FSBZ catching fire: We’ve been through these markets before. What didn’t exist in previous years, however, was a singular dominant online marketplace that prominently highlights by-owner listings to its growing consumer base. In this perfect storm of scarce inventory and price appreciation, many buyers might view FSBOs as less-competitive, or a more accessible prize to pursue. That could give the FSBZ a unique opportunity to take hold.
History says that the FSBZ has the potential for slow incremental adoption, but it will likely not make a significant dent in the market. Taxi companies would tell us to keep an eye on it.
Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and a director for Washington Realtors and Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.