In an increasingly technological world, there are few industries that thrive on personal relationships like real estate. The internet has torn down business model after business model, rendering them ineffectual and useless. Online giants have stormed the gates of the brick and mortar and middleman businesses alike, leaving cable tv, encyclopedias, print newspapers, and perhaps synonymous with this phenomenon, video rentals. These days, the only time I hear someone mention the word blockbuster it is either preceded by the word summer and used in a movie context or it carries with it a connotation akin to going the way of the dodo. And the internet is
to blame responsible. Thanks to the wonders of technology, without ever stepping foot outside our door (or even off our couch), we can directly buy, sell, or trade nearly anything we could ever have or want. The necessity for the middleman has all but vanished in nearly every industry out there – including real estate. For example, there is nothing preventing someone from selling their home for sale by owner (FSBO). There is also nothing that says one needs an agent to represent them in their buying transaction. But in the 21st century, these do-it-yourself real estate transactions are still a small fraction of the overall housing market – 8% in 2016, according to the National Association of REALTORS (NAR). Last year, the FSBO market actually declined! Eight percent is the lowest number since the NAR began tracking these data back in 1981. Why is it that we have an app for quite nearly anything on our smartphones, including finding, buying, or selling homes, but we continue to rely in real estate agents – and pay them for it? It’s an interesting question that has stumped economists, particularly in the face of declining similar middleman-centric industries, such as those which house stock traders and travel agents. Even when the field isn’t entirely crushed, the internet has caused a drastic decline in their fees and commissions, while those of the real estate agent have remained stable. A recent article in The Washington Post stated,
“The Web has changed how agents hustle for a share of the estimated $60 billion paid each year in residential real estate commissions. But it hasn’t taken their jobs. In fact, the number of agents has grown 60 percent in the past two decades.”
It certainly has changed the hustle. I think that Diane Castro-Perez may be the busiest person I know, but it’s not just the hustle. She’s constantly working on ways to deliver more for her clients like showcasing their homes in drone videos, performing open houses, and providing top-of-the-line customer service. Technology (and elbow grease) has helped Castro Real Estate Group to operate smoothly while growing to be the largest successful real estate team in Onslow County. I posit that the human element is responsible. Real estate commissions have remained stable, despite consumers being enabled to do more research on their own. For example, on this very site, you can browse homes in Onslow County or search the MLS. You can also contact a team of real estate professionals who will work diligently on your behalf and see you through every step of your buying or selling journey. We all know how complicated a real estate transaction can be. Not only that, your home likely going to be with you every day of your life for decades, if not the remainder of your time in this world. Compare that with ordering a pizza and it can quickly become evident that an advocate would be a welcome addition to the mix.
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A handshake and a smile are things that you can’t get with an app or a website. But then again, the infamous Bernie Madoff likely doled out plenty of handshakes and smiles. For that matter, so does the sheisty salesman on the corner. Clearly there is something else at play here… Your agent has a fiduciary responsibility toward you. That means they will work in your best interest, and that’s far and away different from other industries. International best selling author and personal growth guru, Tony Robbins, has recently turned his focus on the financial industry, and regarding fiduciaries, he has this to say:
“When it comes to your financial future, would you rather have someone who is legally obligated to act in your best interest, or someone who might be, but is really only obligated to give you “suitable” advice? It seems like a silly question, but here’s a quick example to demonstrate. When you walk into a butcher shop, you are always encouraged to buy meat. Ask a butcher what’s for dinner, and the answer is always “Meat!” But a dietitian, on the other hand, will advise you to eat what’s best for your health. She has no interest in selling you meat if fish is better for you. Brokers are butchers, while fiduciaries are dietitians. They have no “dog in the race” to sell you a specific product or fund.”
That’s specifically in regards to financial advisors and tools, but there is a lot of similarity to that of a Realtor. The National Association of REALTORS states that:
“A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct, will be deemed to be a fiduciary. Fiduciary duties are the highest duties known to the law. Classic examples of fiduciaries are trustees, executors, and guardians. As a fiduciary, a real estate broker will be held under the law to owe certain specific duties to his principal, in addition to any duties or obligations set forth in a listing agreement or other contract of employment.”
The duties set forth by the NAR include loyalty, confidentiality, disclosure, obedience, reasonable care and diligence, and accounting. You can see their entire statement on fiduciary duties here. When we consider the extra mile that Diane and her team are willing to go in addition to the code of ethics that they follow, things become a little more clear. It comes into focus how the internet, which has literally changed the world and wrecked some industries, hasn’t eliminated the role of the real estate agent like many have predicted. If Diane Castro-Perez and Castro Real Estate Team are any indication, it simply poses more opportunity for innovators who can back up their work with integrity.