Disintermediation Is a Death Threat - Where's NAR?

Bill Cherry, Ph.D., Realtor

A long time ago, in graduate school, I studied economics as it pertains to the international banking exchanges. 

But to more simply describe my course of study, it was to learn how the US economies deal with commerce when more than one country's money is involved.

In the course of study, a rather innocuous term, disintermediation, cropped up.

Disintermediation primarily defines what happens when commerce bypasses a middle-man.

In this flow chart, (a) is the traditional method of producing and selling goods; (b) is the disintermediation of wholesaler in a production and selling of goods; and (c) is the disintermediation of all middlemen, i.e., the producer sells directly to the consumer


Amazon is a hybrid disintermediator similar to (b).

In finance, disintermediation occurs when the rate of return on savings deposits at banks become substantially lower than projected returns on investments in equities and mutual funds.  Deposits fall and thus, loans the banks can make reduce.

No one seems to be talking about it, but disintermediation is  occurring in the traditional real estate brokerage business.

In the past, we primarily were affected by For Sale By Owner sellers/buyers. Realtors were disintermediated -- the listing agent for sure, and often the selling agent as well.

For whatever the reason, two additional disintermediators have been added to our equation,  apparently neither has a real estate license.  First, there are the Truilas, Zillows, Hubzus.

Second, there are the flippers who are sending out mass mailings encouraging those interested in selling their home, to contact them first, inferring a quick sale with no real estate commissions to be paid by the seller. No real estate license is required of flippers, yet they are infringing on brokers.

All of these are examples of disintermediation. The traditional Realtor buyer agent, seller agent combination are, in someway, disintermediated.

Disintermediation, when successfully applied, quickly becomes cancerous to a business. It is metastasizing the real estate business now.

Within the past week, Thw Wall Street Journal wrote a voluminous piece about current housing markets and their future. Their expert sources were those identified as staff economists for Truila and Zillow, not the economist for the National Association of Realtors. The NAR's representative made a brief guest appearence toward the end of the article.

One only wonders why our industry has cooperated with disintermediators rather than challenge them.

This time, disintermediation is not innocuous.


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Comment balloon 6 commentsBILL CHERRY • June 25 2017 08:50PM


Interesting I anm surprised  NAR has not taken a bigger stand . There is a petition on Linkedin  BILL CHERRY  asking NAR to take a stronger stand on Z last action

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) over 2 years ago

Bill I this is exactly what has happened (disintermediation) and will continue to grow even more so as time goes on.  NAR sold us out a long time ago and there is no putting the genie back in the bottle.

Posted by Anna Banana Kruchten Broker/Owner, CRB, CRS, 602-380-4886 (Phoenix Property Shoppe) over 2 years ago

As soon as Trulia or one of the others figures out how to replace MLS, members will leave NRA by the droves. It 's not far in the future. State laws could wipe out the Trulias of the world by requiring licenses and compliance, but they don't seem to be addressing that either.


Posted by BILL CHERRY, Broker & Wealth Coach (Bill Cherry, Realtor) over 2 years ago

NAR is too busy putting out ridiculously embarrassing commercials starring that buffoon from Modern Family to actually do something.  

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 2 years ago

"Where is NAR?"  That's a question I have asked myself in relationship to this topic, Bill.  My concern is they will either not involve themselves, or wait until the horses are too far out of the corral.

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 2 years ago

CONGRATULATIONS Bill, on having this blog featured in the "FEATHER NESTERS" group!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 2 years ago

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