Real Estate Rebate – Can the Traditional Model Survive?

The Internet’s Impact on Society: The internet has had a profound impact on society as a whole. It has changed how we communicate and conduct our business. It has allowed companies to target clients via avenues like Google & Yahoo and has subsequently made it easy for consumers to find the products and information they are looking for. Myspace and Facebook allow you to keep in touch with your family and friends via the Internet. These changes will continue to be evident and spread more widely over time. Real Estate is one such industry that will be impacted.

Traditional representation has been the hallmark of the real estate business for decades. An agent charges the seller a commission to sell their house or represent buyers throughout the home-buying process. The traditional model was the norm in real estate and faced little opposition. This is changing. Because of the dependence society has placed on internet, creative minds have created new models to cater to all types of consumers. Consumers no longer need to choose the traditional “One Size Fits All” model. Instead, they can choose the service that best suits their real estate needs.

New models: Customers can now choose from a range of real estate products or services. These services allow buyers and sellers to get specific assistance, rather than the entire package. Real estate agents charge only for the services that they provide in the case of sellers. A seller might only wish to list their property on MLS (Multiple Listing Service Used by Real Estate Professionals Around the Country) in order to increase exposure and may need assistance with drafting a purchase-and-sale agreement. A P&S, which is a service that allows you to list a property and receive assistance will save you hundreds of money instead of paying thousands of dollars for a commission of 5%-6%. A rebate can be given to buyers who are willing to help with the initial house hunting process or those who are interested in buying a home by themselves. The model provides buyers with the professional help of a realtor, and rewards them with a portion the closing commission. SharpBuyers is one company that offers buyers a rebate. SharpBuyers is a national real-estate rebate company, based in Boston Massachusetts. There are agents across the country who will assist buyers in finding a home and offer a rebate at closing. Real estate consultants are another emerging model. These licensed real estate professionals charge flat fees for specific services.

These brokerages offer innovative real estate services and are known as Real Estate Consultants, Rebate Agents, Discount Brokers, or Rebate Agents. These new models are designed to engage buyers and sellers in the home-buying or selling process. These models are perfect for home buyers of the future, generation X/Y. These home buyers are tech-savvy and will not hesitate to explore the process, even if it means saving thousands of dollars. Generation X will be collectively in their mid- to late 30’s ten years from now. While many will choose to purchase their first home using the traditional route, others will look for innovative brokers. What will 2017 bring? It will only be time to find out. Many traditional brokerages will have to adapt to a mixed-service model. This means they will offer both traditional and discounted services to customers. If traditional brokerages want to stay competitive after 2020, this may be a good strategy. Consumers can have both professional help and more money with the new models of real estate businesses.

The Internet and Real Estate Today: It is obvious that the Internet has had a profound impact on the real-estate profession. Many agents worried that the Internet would make it difficult for them to close deals. This has not been the case to date. The internet and all the marketing tools it offers has been welcomed by the real estate industry. The internet has made it easier for real estate professionals to access information such as recent sales history, listing information, and other statistical data reports. The Internet is a key tool for brokers, according to Leonard Nomura from Bentley Real Estate Group. These numbers are staggering. According to the National Association of Realtors 77% of homebuyers used the Internet in 2005 to search for their homes. This is a significant increase from the 2% of home buyers who used the internet to search for their homes in 1995 to the 85% that are using it today. reports that 50% of consumers surf the internet with the intention to buy consumer goods and services. This applies to everything from Real Estate to automobiles, clothing and music, as well as other products.

Consumers can now select from a variety of real estate services thanks to the new mixed service models. Many real estate professionals view these new models as a threat due to their potential to drastically impact traditional real estate brokerage’s market share. Real Trends, an industry newsletter, reports that alternative Real Estate Models make up just 2% of the market today, but could increase to 12% by 2010. The real estate industry is in transformation. The market’s future will unfold over time, but here’s the bottom line: alternative models in real estate are putting money back in consumers’ pockets. If you show someone how to save thousands of bucks, you’ll always bring a smile to their face.

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