Real estate has been an essential part of human civilization since ancient times. The concept of property ownership and the buying and selling of land have existed for thousands of years. However, the modern profession of being a real estate agent has a relatively recent history. In the early 20th century, the real estate industry in the United States began to formalize, and real estate brokers emerged as intermediaries between buyers and sellers. Over time, this role evolved into that of a real estate agent, a licensed professional who assists clients in buying, selling, and renting properties. Today, being a real estate agent is a popular career choice, but it is also a profession that has faced numerous challenges and criticisms throughout its history. In this paper, I will examine the evolution of the real estate industry and the role of the real estate agent through the lens of George Ritzer’s rationalization.
Where do we see Rationalization in Real Estate?
Modern real estate and property exchange may be a far cry from the original no-holds-barred free-for-all home sales in America in the eighteen-nineties; with this mostly well-documented process, it is easy to examine the storyline of how brokerage came to be the profession we know it as. The modern practice of hiring a sort of middleman to sell your home did not start out so organized. Different agents would put up their signs in front of a house that was being sold and it was essentially a free-for-all when it came to someone wanting to buy the house. These outdated brokers are called “Curbstoners” (Matley).
As time progressed, this profession began gaining more structure and guidance. The first of these structural changes, or rationalizations, was new certification requirements. Up until 1919, when the Real Estate Act of 1919 was widely adopted, there was no licensing required to call yourself a broker. This step towards the modern role of a broker created more control over this industry, weeding out those who were only in it to sell one home and maximize profits for themselves because they are not worried about their reputation in future home selling pursuits crookedly benefit. This new requirement made the industry more controllable because there was finally a way to document who was entering and exiting the market. The next large step in rationalization came when internet listings became a popular way to list homes. Although there were many rationalizations that took place between these times, this is one of the more prevalent ones as well as interesting to dissect. Because of these changes and the constant updates, being a fully invested real estate agent takes a lot of effort and time, so the people in this industry are fully invested in their client's personal living pursuits.
Revolutionizing the industry using the internet
The industrial revolution in the modern age has brought us many innovations with the most recent major one being the invention of the internet. This section further explains how buying homes has changed with the widespread use of the Internet.
Do websites like Zillow and Redfin really make the home-buying process quicker?
Contrary to popular belief, the accessibility of homes on buying sites such as Zillow and Redfin, does not cut down the time spent searching for a new home, they are actually increasing the time they spend looking for a home. In a recent study done by the National Association of Realtors, it was found that a majority of buyers use the internet to support the decisions that they are ming with their realtors. This means that home buyers are using a hybrid of real estate agents and the internet to make their decisions. Now this does not necessarily mean that the homebuying process takes less time, buy means that because of the ease of information potential buyers are spending more time scrolling through other options “just in case” even if they have already found the home they will purchase just to make themselves feel like they have gotten the best option. In Figure 2, we see that the internet has become a huge part of the process of home buying since the early twenty-first century, however, the drop in the percentage of real estate brokers is not decreasing at nearly the rate that internet findings are increasing. In reality, this graph looks more like responders using a hybrid of both the Internet and real estate agents to buy their homes.
The internet has turned homebuyers into prosumers of sorts, a term adopted by Ritzer to mean they are really servicing themselves. An example of this in another context is someone getting their own drinks and utensils as well as bussing their own tables in a self-service restaurant. This means that you end up doing the work that people once hired others to do for them. In terms of the real estate industry, this means that real estate agents' roles are changing in that the agents are doing less of finding houses and more of just the paperwork of buying a house.
The Future of Real Estate
Since 2014 there has already been an uptick in the amount of licensed real estate agents in the U.S. but because of the low barriers to entry and people's desire to have modern-day connectedness, there will be many more people who join this profession part-time. This will in turn create a boom in part-time real estate agents. Through my research, I have found that it is shocking the wealth of information freely available on the internet for buying a home. The profession seems to be coming full circle. In the beginning, there were no rules for selling homes and anyone could stick a sign on your lawn and try to sell your house. In the nineteen-sixties, real estate agents had the only information on who to call how to show houses, and how to list a house for sale. This was the peak of being a real estate agent because all of the documents were well accounted for with most of the work being done in the same office and easy paper organization keeping each case straight. Now, it seems like anyone could list a house or buy one. There are countless websites that you can buy and sell houses on without being a licensed real estate agent and it is only a matter of time before rationalization and the internet make this career into an obsolete memory of the past.
Credits:
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