Real Estate Agents Are In The Goldilocks Zone – What Does This Mean For Their Future?

Will technology send real estate agents into near extinction like it did with travel agents and may be doing with taxi-cab drivers today?   This is a topic of frequent conversation in our industry, especially with dozens of new, well-funded startups, many with new and different business models, all gunning for a piece of the residential real estate industry.

I don’t like Kool-Aid® and don’t drink it..

Don't Drink the Kool Aid Before I start, for the naysayers out there that may think since I’ve spent my entire adult life in real estate that, of course, I’m going to come to the conclusion that real estate agents are critical and you can’t live without one.  Well, to quash those fears, just read some of the articles I’ve written here over the past 10 years, you’ll know I don’t drink the Kool-Aid®.   I do not recite the chant of REALTOR® cheerleaders or anyone else unless I completely believe what I’m saying and feel qualified to speak on the topic.  In fact, there have been many times my opinion on a topic, such as on the mortgage interest deduction, was in direct contrast to that of the National Association of REALTORS®.

Real Estate Agents serve as “The Goldilocks Zone” for consumers….

Goldilocks Zone - Rea Estate Agents in the Key ZoneForgive me for dragging a science lesson into this real estate conversation, however, it makes for a good illustration of one of the first areas of significance of a real estate agent I want to discuss.  In astronomy and astrobiology, there is an area around the sun that is habitable, by not being too close to the sun, nor too far from the sun, that is referred to as the circumstellar habitable zone (CHZ), or by it’s “street name”, The Goldilocks Zone.

I think this is a good metaphor for a real estate transaction.  Think of the sun as the buyer and the seller as earth. The seller needs the buyer however, they really need to keep their distance from one another otherwise it will most likely not end with a successful tranasction.  The reason I say this is homeowners often have an emotional attachment to their home and, believe it or not, often think their home is worth worth more than it actually is.  The buyer, on the other hand, has zero emotional attachment to the home, sees flaws and imperfections in it that are invisible to the current homeowner and, in most cases, thinks it is worth less than the seller.  So, with this in mind, if the buyer and seller, with their diametrically different thoughts on the home are put together in one room to negotiate a sale, odds are it won’t end well.

There is a better way!  Real estate agents operate in the “Goldilocks Zone“, that safe place that is close enough to each party to the transaction to be effective, but not so close so as to hinder the negotiation process.  When a buyer and seller are both represented by real estate agents, they (the buyer and seller) normally do not have any direct contact with each other no do any negotiation between them, but instead allow their respective agents to handle those things.  This keeps the emotion out of the picture and also filters what is said through a professional that will filter the message removing anything that wouldn’t be in their clients benefit.  An experienced agent, without an emotional attachment to the transcation, will be able to think and act much more objectively, than their client typically and their experience will help them know when and how is the best manner and method to convey offers, negotiate, etc.

There are many more reasons while agents are critical to a successful real estate transaction, some of which I’ll cover in future articles over the next few weeks, but here’s the first one:

Because real estate agents can operate in the “Goldilocks Zone” which is a critical zone to be in for a real estate transaction to have a successful outcome.


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