Let’s face it; the Internet has led to the demise of many long-standing brick-and-mortar businesses, like the yellow pages, or travel agents, to name just two that come to mind.
And now it appears as if another popular profession is at risk, real estate agents.
Yep, Google finally made a major move in the real estate realm today, announcing a $50 million investment in Auction.com, a well-established website for buying and selling real estate online.
Last year, Auction.com sold over $7 billion in real estate via more than 35,000 auctions. And since 2010, the company has reportedly sold nearly $20 billion in so-called real estate assets.
Google Capital, which was formed just last year, made the investment, giving them a roughly four percent stake in Auction.com based on its $1.2 billion valuation.
As part of the investment, Google Capital will gain a seat on the board of Auction.com, along with a board observer position.
As for what Google plans to do with the investment, partner David Lawee noted in the press release that they think Auction.com can “fundamentally change” how real estate is bought and sold by leveling the playing field for smaller investors.
Lawee also seemed particularly interested in commercial real estate, meaning residential real estate agents probably don’t need to worry, yet.
At the moment, Auction.com is focused primarily on distressed real estate, such as bank-owned homes, foreclosures, notes, land, and commercial property.
So it’s not as if an everyday Joe is going to use Auction.com instead of their neighbor who also happens to be a real estate agent.
Google Real Estate Coming Soon?
At the moment, there isn’t a “Google Real Estate” division at Google, at least not publicly. In fact, some random guy seems to own the domain name GoogleRealEstate.com.
There is a Google Real Estate team, but I believe they focus on Google’s own properties, keeping the Zen for employees by creating beautiful campuses.
And if anything, Google took a step back from real estate in recent years. In 2011, the company pulled real estate listings from Google Maps, citing low usage as a reason, along with other “excellent property-search tools” that were readily available.
So is this another experiment for Google, or the beginning of a major foray into real estate?
After all, companies like Zillow, Redfin, and Trulia are making big money, with two of the three publicly traded and Redfin soon to be.
Could we soon see local real estate listings in Google’s search results, or back on maps? Or something even more robust? Only time will tell, but either way, I don’t see the real estate agent going away anytime soon.
At the end of the day, you need a physical human to help navigate the oft-confusing process, at least for now.
Sure, buyers are doing a lot more of the legwork nowadays thanks to those real estate listings websites, but someone still needs to negotiate and handle the paperwork.
However, major players in the field should be on notice now that Google has pledged a decent chunk of change toward real estate.