Is the Internet Replacing Real Estate Agents?

Before the Internet became popular, homebuyers had to spend days touring dozens of homes pre-selected by their real estate agent, and were often forced to settle on a home that was merely satisfactory.  Now individuals can shop online for homes, take virtual tours of homes, and even list their homes for sale online without ever stepping foot inside an agent's office.  The Internet provides what previously could only be provided by an agent:  a direct connection between buyers and sellers, thus eliminating the need for a middleman that charges a pricey commission.  In this age of technology though, some argue that the middleman can never be entirely replaced by the Internet.          

The Internet offers a variety of sources for people searching for homes for sale.  One type of site is the "real estate portal."  [1]  This type of site offers searchable listings, where buyers can choose their location, price range, and features they want in a home, such as number of bedrooms and bathrooms.  [2]  These sites also provide other useful and related information, such as the basics of buying a home; links to mortgage lenders, movers, and home improvement services; and also offers demographic and lifestyle profiles.  [3]

Other types of home-finding sites are geared toward helping buyers find second or vacation homes.  [4]  These sites focus on providing information about locations so that buyers can first determine where they would like to purchase a second home and then allows buyers to find properties for sale as well as agents in that location. [5]

Blogs have also been useful tools for selling people on houses before they ever walk through the front door.  [6]  Blogs are easy and free or cheap to set up, and let sellers give a personal view of their home to potential buyers, which could not be given by an agent who is merely showing the property.  However, the drawback to using blogs to sell homes is that local bloggers must access the site in order to know that the home is available, which means that bloggers are appealing to a limited audience unless the particular blog is very popular in the local area.  [7]

These various avenues for locating homes leave people interested in certain specific properties, but do not eliminate the need for real estate agents.  Once people locate homes online, they will likely be directed to an agent who is listing the home, who they will then have to contact to actually see the home.  Even though many websites offer online video tours or extensive digital photos of homes, rarely will anyone purchase a home without actually walking around inside the home to make sure it is the home they really want.  [8]   Buyers and sellers must also complete the buying process and all the paperwork that goes along with that with their agents, lenders, and lawyers, which means meeting in person rather than completing the deal online.  At best, the current state of these types of websites does little more than save buyers' agents time in locating potential homes to show to their clients or give sellers' agents more publicity and allow for a faster sale of the home. 

However, aside from offering different avenues for locating homes for sale, the Internet also offers another unique service to both buyers and sellers:  the Web-broker.  The Web-broker is an agent, usually found online, who offers lower commission costs for buyers who are willing to do much of the leg work themselves in locating homes of interest, and lower costs for sellers who list their homes through these Web-brokers. [9]  These Web-brokers generally work from home and arrange to show clients homes that the clients themselves select online, thus eliminating expenses and time investments for the broker.  There is much controversy over the fact that most buyers are doing a lot of the work in locating homes of interest, which used to be solely the job of the agent, and yet traditional real estate agents are still charging the standard 6% commission fee to list and sell homes, with that fee generally being split equally between the buyer's and the seller's agents.  [10]  However, Web-brokers are passing along their savings in expenses by cutting commission fees by up to 25% for sellers, and are offering commission rebates for buyers as well.  The buyers rebates work by allowing buyers to include the full commission fee as a part of their mortgage obligation, but after the closing of the sale, the Web-broker returns a portion of the commission fee to the buyer in the form of a rebate check.  [11]   

Overall, the Internet has not eliminated the need for real estate agents for either buying or selling homes.  However, using Web-brokers can be advantageous for buyers interested in saving money on commission fees, so long as the buyer is willing to do much of the work that a traditional real estate agent would do in exchange for higher commissions.  Sellers can also use the Internet to save on commission fees either through Web-brokers who charge lower commission fees, or through paying flat fees to list houses for sale online with the tradeoff of not having an agent at all.  Thus, though the Internet has helped make shopping for homes more convenient, using a real estate agent is still preferable for those who want to easily and quickly buy or sell a home.





[1] Kathy Yakal, Online House Hunting Eliminates Some Hassles, Barron's, June 29, 2004,

[2] See, e.g.

[3] Id.

[4] Yakal, supra.

[5] See, e.g. 

[6] Tara Siegel Bernard, Home Sellers Use Blogs to Market Their Properties, Dow Jones Newswire, Oct. 12, 2005,

[7] Id.

[8] Let the Internet Loose on Real Estate, Fin. Times, Jan. 12, 2006, available at 2006 WL 631853.

[9] Steve Stecklow, From Cyberspace to Living Space:  Using the Web to Buy a Home, The Wall Street Journal Online, Feb. 16, 2006,

[10] E.g., Id.

[11] See, Id.see also