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Are Listing Agents Being Replaced?

Written by Posted On Thursday, 19 September 2019 13:35
Are Listing Agents Being Replaced?

With the advent of low cost technology driven listing services, listing agents are becoming less important than ever before because of the potential significant savings possible. Listing agents used to hold the only key to the MLS but many companies are not offering access to MLS through a low cost model and providing minimal service. This shift is happening because the savings is significant and sometimes the service a listing agent provides is not reflective of the fee they are paid. If we look at a $300,000 house the standard listing agent fee is 3% or $9,000 and many listing services can cut out up to 70% of that fee. Is this trend going to continue to drive the listing agents out or is this a fad? When does it make sense to use a listing agent and when is it best to use a listing service? How are listing agents handling this disruption in the marketplace?

Are Listing Agents Being Replaced?

Yes but not entirely. There will always be a need for listing agents but not in the same ways that we are used to. There are certain transactions that will require the help of a listing agent like first time sellers, a higher end or very unique home. People who have a little bit of real estate experience or can navigate the contract language, will gravitate towards the low cost listing services in order to save on the standard 3% listing fee.

Who Should Use A Listing Agent

People who are selling their first house will usually need to use a listing agent to help guide them through selling process to ensure they get the price they need and to help them navigate the contract language. People who have a higher end or unique home will use listing agents because the selling process may require more work than just listing on MLS. The listing agent may need to facilitate multiple open houses or network with other agents to find the right buyer for these high end / unique homes.

Who Should Use A Listing Service

People who have a little real estate experience or are comfortable with the real estate contract language can usually avoid the listing agent and use a listing service like Listing Spark. Listing Spark has a very easy user interface and allows you too see all the activity related to your home sale during the process. Investors will usually use a listing service to sell properties to squeeze every dollar of profit from deals and because they have experience reading contracts. When we buy houses to remodel to flip, we use Listing Spark to sell our houses. Once you have read the standard official residential contract 2-3 times it becomes a less daunting task to avoid any unfavorable language.

How Are Listing Agents Adjusting

It may be too early to tell how the majority of listing agents are handling this shift in listing homes for sale but the change to low cost listing services is not going away. If anything it is going to continue to grow as more companies come into the market. Redfin is offering a 1% listing fee and Zillow is growing into one of the largest authorities in the real estate industry. These companies are based on technology and are here to disrupt the traditional listing service. Listing agents should consider both models to adjust to the changes by offering full service listing services as well as a discount listing service. 

If you have any questions or want to discuss this topic further you can reach out via my Real Estate Investing website at We Buy Houses Fast in Dallas. 

Adam Mitchell 

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Adam Mitchell

I am a real estate investor and my company is We Buy Houses Fast in Dallas. We buy houses to remodel and flip as well as buy, remodel and rent houses in the DFW area. I write to help educate homeowners and to help new investors get started in the market.

https://www.webuyhousesfastindallas.com

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