Will Competition for Real Estate Services Finally Fall Victim to Too Many Internet Lead Generation Middlemen?

There may be storm clouds forming on the time horizon, one that could exact a major cost toll on the North American Real Estate Services industry and of course consumers who will be footing the bill. Instead of a free and open internet working to increase competition among Real Estate service providers and drive down costs, lead generation middlemen are instead trying to repackage the services of others, taking a big cut of the financial pie for themselves, while doing their best to convince consumers by obfuscation of the facts that they can help them save money! Well I'm calling Balderdash!

The fact is, when middlemen lead generation referral companies insert themselves into the financial vein of real estate services, consumers will ultimately PAY more for the services they receive, not less.

The most important concept a consumer needs to understand is that anytime you add more MIDDLEMEN, your cost for services tends to increase. Whether you hear a neat new radio ad promising a low cost Realtor® solution or land on a middleman website offering to save you more money (more money based upon what?), if the ad is not directly from the Brokerage that will provide the actual services, and is instead a "promise" to find you a low cost (somebody) service provider, just understand that you're cost of services will now have to include paying the lead generation company, plus all the traditional Realtor® fees.

So if the Realtor® reduces their fees, but you are now paying a lead generation company, are you really that much better off? I think that answer has to be no. Cutting out as many middlemen, and working with a "direct to consumer solution, is your best way to get the services you need at rock bottom cost.

Then there is Zillow.com! I wonder if consumers even understand the added cost burdens associated with Zillow.com, a BILLION Dollar Wall Street company? Most likely not.

Basically, the more middlemen you add to the cost of the real estate services you ultimately receive, the higher the real cost becomes and or the lower the services offered. Here is a handy graphic that illustrates what you may have already suspected.

Real Estate is Local and the Best Agent Deals are Local Too!

When you work directly with a local realty agent who operates with a minimal overhead cost, and who is known for quality of services provided, you can save real money while getting proven agent services designed to help you earn top dollar on the sale of your home. Before you step into a higher cost trap maybe you need to ask some key questions of agents and conduct additional research.

This video can help to explain Zillow.com, but also lends itself to understanding how real estate lead generation businesses work to add costs to the services you receive.

The options expressed are my own.