October 03, 2006
Will real estate "consultants" replace real estate agents?
Several days ago, a blog reader asked:
Anyone know of any national source out there promoting or aggregating discount/fee based real estate agents/brokers?
The question comes on the 6th anniversay of the first course "Consumer-Centric Real Estate Consultant" (C-CREC) training offered on October 1, 2000 in Orlando, FL by Julie Garton-Good, founder of the National Association of Real Estate Consultants (NAREC.com). NAREC is one of two national organizations formed in the past six years to help promote alternative or fee-for-service real estate business models.
Here's my short history of attempts to aggregate alternative / fee-for-service real estate service providers:
1997-98: Pat Rioux, of http://www.listforless.com, worked with an assistant to develop a nationwide database of alternative real estate services. The same database was published on the International Real Estate Digest, http://www.ired.com, at approximately the same time because Pat also wrote for the site. IRED was a pioneer in the online real estate world, nominated around the same time for a Webby Award.
July 1999: The Real Estate Cafe (http://www.realestatecafe.com), publishers of this blog, hired Pat and her assistant to update their database. The directory of over 500 companies was available to visitors to the Cafe, then a walk-in, internet-based housing information center in Cambridge, MA -- the first nation when we open in 1995.
2000: Julie Garton-Good founded the National Association of Real Estate Consultants, http://www.NAREC.com. Their membership includes a wide range of alternative real estate business models.
November 2000: The National Association of Realtors (http://www.Realtors.org) released a strategic planning committee report, written by consultants at Arthur D. Little in Cambridge, MA, which predicted that the use of the term real estate "agent" would be replaced by real estate "consultant" during the second half of this decade. Think we're on schedule?
Early 2001: A well-financed internet brokerage concept approached The Real Estate Cafe about updating our database so they could license their technology to alternative business models. We've maintained a private database ever since.
2002: eBay real estate (http://pages.ebay.com/realestate/ ), which had focused primarily on auctions up until that point, and http://www.HomeGain.com launched a national experiment to link MLS listing-entry-only service providers nationwide with web-savvy sellers. The initiative was not pursued aggressively, and disappeared by year-end.
2006: http://www.AREBA.org, the American Real Estate Brokerage Association, was launched in the 2nd quarter of 2006. Their membership is made up primarily of flat-fee, MLS listing-entry-only real estate services.
Efforts to reform the residential real estate industry reform span nearly 25 years, beginning in 1983 when the Federal Trade Commission (FTC) investigated the industry and then rose in frequency eight years later when the Consumer Federation of American (http://www.consumerfed.org) first called the industry a "cartel." More recently, the FTC, US Department of Justice, and others have renewed efforts to create a more open, competitive real estate marketplace. Some predict that the fruit of their reform efforts, market innovation, and web-savvy consumers will yield $30 billion annually in consumer savings. Do you agree?