I read an article this morning from The Hustle about Stanley Lo, the eccentric king of residential real estate in Silicon Valley. Over his career Mr. Lo has sold nearly $6B worth of houses in the San Francisco Bay area. His rags to riches story is inspiring and instructive for anyone interested in becoming a successful real estate agent.
Yet, even as I was reading the expose on Lo’s success in residential real estate, I couldn’t help but think how the real estate industry is ripe for disruption, and that training to become a realtor is a much harder proposition than it used to be.
What are the biggest threats to real estate agents future income?
The days of making $50K per year as a “part time” residential real estate agent are long gone. This is in large part because of the continued technological innovation and access to information. It’s been years since buyers have needed to ask agents for prices on properties meeting their criteria. That only still happens on HGTV!
The other big challenge for real estate agents is the fact that the competition has gotten better. This trend will only accelerate, so if you are getting into residential real estate, you will need to not only work hard but also work smart. For example, staying up-to-date on market conditions both in your sales area and on a macro level. A great resource should be the continuing education opportunities offered by most local Multiple Listing Service (MLS) entities.
Why we will still need good real estate agents in the future?
The threat to realtors compensation from a more efficient transaction process is a legitimate concern. Put yourself in the place of the home owner. Why wouldn’t you sell your own home using a service like Homie and save thousands of dollars versus the typical realtor seller commissions.