10,000 will drop out of real estate industry, says agent

The housing market will one day recover but the real estate industry probably won't.

That is the prediction of Kapiti real estate agent John Bradley who believes 10,000 of his ilk will quit the industry in the next two years because of the property slump.

He says they may not be needed when the market eventually recovers, because the industry will have been reshaped by the Internet.

The forecast does not cut ice with Real Estate Institute president Murray Cleland who says that while the Internet can help people, house buyers will still need an agent "to take them to a property and do a deal for them".

Mr Bradley last week closed his own "bricks and mortar" estate agent, Totally Kiwi Real Estate in Paraparaumu, with the loss of seven fulltime and part-time jobs.

But instead of bowing out of the industry he is putting all his efforts into cyberspace, hoping to ride the Internet wave and turn his national "virtual" real estate agency, Jet Agent, into an international franchise. Sellers can list their properties on the website and negotiate direct with buyers, calling on advice only when they need it.

3months software developer Mark Chambers, who helped develop the site, says buyers and sellers negotiate through an online version of a sale and purchase agreement, editing the selling price and submitting it back and forth until agreement is reached. They can only edit the price in turns and must first type in their passwords.

Once a price is agreed, the document can no longer be edited and is printed off to be signed.

The Real Estate Agents Licensing Board says there were 17,793 licensed estate agents selling property in April 2007. Mr Bradley says the average number of sales per agent has fallen to just five a year and he believes "a couple of thousand" agents may already have drifted off into other jobs.

"Since Christmas it has just hit a wall. We are looking at a couple of years before there are reasonable volumes again. In time the market will recover, but by then the Internet will be the next wave that hits traditional real estate and the industry will never be the same again." Mr Bradley says that till now the Internet has been used only as an "electronic catalogue" for property listings and the next wave will be the adoption of Web 2.0 technologies.

The "obvious next step" is to let sellers write their own appraisals and upload their own photos of properties, but Jet Agent has "jumped the whole fence" by letting buyers and sellers negotiate and make offers online.

"We sit there at a helpdesk giving support. What you have got to consider is do people want to do it? Do they know enough to enter into a sale and purchase agreement themselves? I believe at least half the market knows what they are doing and they wouldn't need an agent if they could find a buyer and have the process laid out for them."

He has registered Jet Agent websites in all English-speaking countries.

- © Fairfax NZ News