What Changes Has the Internet Brought to the Real Estate Brokerage Industry?
In a market where buyers and sellers are both highly decentralized, a market maker acts as a neural center, establishing the rules of the trade and integrating the decentralized information channels. For one thing, it can acquire listing information and c
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What Changes Has the Internet Brought to the Real Estate Brokerage Industry?
Readers Guide • In a market where buyers and sellers are both highly decentralized, a market maker acts as a neural center, establishing the rules of the trade and integrating the decentralized information channels. For one thing, it can acquire listing information and control the supply; for another, it can attract buyers and control the demand, providing a highly centralized platform for buyers and sellers to find each other. • Since 1995, the Internet has fundamentally changed people’s ways of communicating, acquiring information and buying products or services. Buyers, sellers and renters alike can all benefit profoundly from the Internet, since the real estate industry is large-scaled, regionally decentralized, and highly informationintensive. The Internet has undergone two periods of development since 1995. • For most consumers, buying or selling a home is a daunting event involving a huge amount of money and complicated procedures. It is a highly informationintensive decision which relies heavily on accurate information. Unfortunately, such information is not easily accessible to consumers due to its complicacy, specialism and opacity. The century-long history of the US brokerage industry has witnessed the centralization and integration of information matching media, a process that can be termed as “the rise of the market maker system”. In a market where buyers and sellers are both highly decentralized, a market maker acts as a neural center, establishing the rules of the trade and integrating the decentralized information channels. For one thing, it can acquire listing information and control the supply; for another, it can attract buyers and control the demand, providing a highly centralized platform for buyers and sellers to find each other. In short, a market maker is a platform where buyer information and listing information are shared and correlated. In the pre-Internet days market makers were multiple listing services; now they are Internet platforms (Fig. 3.1).
© Xiamen University Press and Springer Science+Business Media Singapore 2016 S. Ba and X. Yang, “Internet Plus” Pathways to the Transformation of China’s Property Sector, DOI 10.1007/978-981-10-1699-8_3
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sellers
market maker
home owners property managers real estate developers
decentralized localized non-standardized
brokers brokerages MLSs the Internet
centralized
home owners tenants immigrants
decentralized localized non-standardized
buyers
Fig. 3.1 The structure of the real estate brokerage industry. Source The Authors
3.1 The Driving Force Behind the Transformation of Information Media 3.1.1 The Three Periods in the Development of Information Media There were three obvious periods in the development of information media in US brokerage industry. The first period was from 1905 to 1995, which was the longest of the three. Agents, being both providers of listings information and the
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