iSchool professors awarded for research on internet’s effect on real estate
Courtesy of SU Photo and Imaging Center
Three professors at Syracuse University were presented with an award recently for research that would test the validity of conventional wisdom regarding electronic commerce.
Kevin Crowston, Steven Sawyer and Rolf Wigand in SU’s School of Information Studies started collaborating on the project 18 years ago. They were given the Best Paper Award by the Association for Information Science and Technology in Copenhagen last month.
The internet was just beginning to spread its wings and would eventually create a market place that would be devoid of middle-men when the researchers started. These professors decided to check if that would be the case with real estate agents. According to their research, the internet didn’t pose a realistic threat to the real estate agents.
Titled “Social Networks and the Success of Market Intermediaries: Evidence from the U.S. Residential Real Estate Industry,” the paper explores the importance of the networks of professional relationships that the real estate agents cultivate to remain successful.
The professors theorized that buying a house is not a single transaction, such as buying a pair of shoes. The transaction of purchasing a house is embedded in a series of transactions that may include a mortgage broker, house inspector, repair person, interior design and so on, Crowston said.
“Our argument was that the successful real estate agents are the ones with the good relationships with all these professionals so that they can guarantee work. It’s sort of mutually beneficial,” Crowston said.
Rolf Wigand, former iSchool professor, referred to a process called disintermediation that was occurring in several industries with the growth of electronic commerce. It meant customers were bypassing the middle-men to directly contact the seller.
Both Crowston and Wigand cited the case of travel agents, who have largely disappeared because airline tickets, for example, are just available on the airline’s website.
Conventional wisdom during the beginning of the growth of electronic commerce predicted the downfall of real estate agents, primarily because it was perceived that establishing a connection with the buyer and seller was the most important transaction in the real estate business, Crowston said.
“The assumption was that buyers and sellers would just find each other on the net,” Crowston said.
From a national survey of 525 real estate agents, the professors discovered that prospecting for buyers is only a small part of what real estate agents actually do and in some ways, it wasn’t the most important part either, he added.
“It just seemed like all these predictions about real estate agents disappearing were based on very naive notions about what real estate agents did,” Crowston said.
It took several iterations and papers before the professors arrived on this final paper, which wrapped up their years of work. Crowston said work on the project was never a continuous one since its inception. There were periods of activity followed by periods of inactivity.
After work on the project was reinvigorated in 2010, the professors made the connection between real estate agents and the importance of interpersonal relationships, which led to their award-winning paper.
“It was very gratifying to see an 18-year project come to a successful fruition,” Crowston said. “In retrospect that fact that it took 17 years to go from the initial idea to this paper. That is ridiculous in some ways.”
Published on December 5, 2016 at 12:08 am
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