The internet has been around for a while now…yet it hasn’t really transformed the real estate business the way it should have writes Brad Stone:

• Sites such as Zillow have made it easier for buyers and sellers to trade properties – yet agents remain a part of the process and their fees have stayed the same.
• This is despite the studies that indicate that going through an agent, rather than selling the home directly, decreases the price of the home by up to 7.7%.
• This might be due to collusion –there are agents involved on both the buy and sell sides; one agent might navigate their client away from another agent that offers a discount low-cost model.
• Things aren’t likely to change in the future. It’s not as if buyers and sellers haven’t used the internet – in fact 90% of real estate transactions begin on the web – they just feel the need to work with an agent who overcharges them.

Read more about the company that is (unsuccessfully) trying to challenge the standard model, a couple companies that have given up on challenging it, and how agents do in other countries over here.

Source: Businessweek

Via: Marginal Revolution