Net neutrality and property: May be the repeal a hit for realtors and lenders?

You might be acquainted with how the FCC’s vote against net neutrality may impact your day-to-day Internet use. Only time will tell how our new Internet rules could affect buying a house. Industry experts predict that certain of the most popular alterations in the housing market after the net neutrality repeal at the end of 2020 come in how homebuyers connect to their realtors and lenders.

New net neutrality forecast: Prices go up, smaller businesses affected

In December 2020, the Federal Communications Commission voted against the existing net neutrality rules, set up through the Federal government in 2020, which prevent broadband providers from reducing websites and charging more for faster Internet use. Since the web is deregulated, packages and pricing for website users are expected to alter. Many anticipate that prices will go up.

The controversial vote not only affects the average Web surfer, however it may crowd the small business operator too. Making Internet use more like cable tv, Ohio Congressman Tim Ryan says, could make it harder for small enterprises, like Etsy sellers and individual proprietors, to keep up with bigger businesses advertising within the “fast lane.” Realtors and lenders who rely heavily on the web for advertising and building client relationships could also be influenced by the shift.

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4 ways the web neutrality repeal could change the way you buy a house

Access to the web has made it incredibly easy to buy a house. You can get prequalified for any mortgage on the internet and within a few minutes, and you may also house-hunt and find an agent. Younger, first-time buyers will be the ones most likely to locate their homes on the web. Buyers will also be more likely to walk-through the homes that they’ve already viewed online.

So what goes on to this seamless online-to-offline buyer experience now that the Internet’s rules have changed? Realtors and financial experts share their insights:

1. You might see fewer real estate videos.

Jeff Miller, co-founder of AE Home Group of local realtors in Baltimore, states that there’s without doubt the repeal of net neutrality can change the way realtors market properties for their clients. “Using the cost of bandwidth affecting access, it is likely that fewer individuals will choose to access bandwidth-heavy types of media like videos,” he explains.

Prediction: “More emphasis put in low-bandwidth media like text and low-resolution photos could allow for broader access,” Miller says.

Since July 2020, the National Association of REALTORS(R) (NAR) has been vocal in their stance against the repeal as a means of “supporting the small guy” in real estate. New real estate technologies, the NAR said, like virtual reality, drone photography, and mobile apps, are a few of those most likely to be affected.

“Ryan could explain difficult mortgage concepts within an clear to see and entertaining way. [He used] realistic scenarios from past housing markets and current. His enthusiasm and data of the housing industry really helped with our final decision to buy a house.” – Interact with a Cornerstone loan officer so what.

2. Local realtors and lenders could lose business.

Just like the indie artisans of Etsy, local realtors and mortgage brokers starting to build their business may also experience setbacks. One possible results of the web neutrality repeal, Mark Ferguson, realtor, property investor, author, and creator of, says, is the fact that agents who manage their own personal websites to obtain leads might not have exactly the same success.

Prediction: “[Local agents] might see reduced traffic on their own sites if they’re failing to pay extra to obtain the preferential service,” Ferguson says.

Ralph DiBugnara, President of Home Qualified, believes net neutrality’s potential impact on property advertising and marketing could slow business. Most agents are considered self-employed, even if they sort out an agency. Meaning, they are commission-only and canopy their own expenses. “The less established agents and even some veterans all advertise through social media (YouTube, Facebook, Instagram), as well as Zillow and Trulia,” DiBugnara says. “Which have grown to be necessary tools in marketing listings, services, and new properties to the market. 97 percent of searches start online. If net neutrality makes it more expensive to advertise for individuals who can not afford to, they will be at a disadvantage.”

3. Independent realtors might charge more.

What goes on when smaller proprietors feel the squeeze? Added costs, unfortunately, often pass right down to the consumer. Jeffrey Berthiaume, founder and CTO of LoanBot, a lead-generating service for realtors and lenders, explains, “The net neutrality repeal implies that ISPs are not restricted from arbitrarily limiting bandwidth to websites. In practice, they could choose to decelerate websites from companies that don’t pay extra fees or reduce the websites of competitors which do pay them.”

As an example, if a major real estate website taken care of “enhanced bandwidth,” they could ensure that other small realtor sites get reduced bandwidth. Those smaller realtors would have to pay additional fees to that particular ISP and could pass on those fees included in settlement costs to the end consumer. Berthiaume explains, “If they targeted specific metro areas, it could attempt to affect housing prices. There'd be no upper limit to what an ISP could charge. Or what certain realtors or mortgage brokers might pay in order to get a benefit.”

Prediction: “Our industry is about getting as much attention as you possibly can to be able to generate leads,” Berthiaume says.

Berthiaume believes when this option can be obtained (and isn't federally monitored), it's very quickly taken advantage of by companies with deeper pockets looking to get an advantage over their competitors.

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4. Realtors and lenders will have to change the way they connect with buyers.

Using their backs from the wall, smaller realtors and lenders may have no choice but to innovate, Randy Nieves, CTO from the full-service IT provider Cal Net Technology Group, predicts. “In reality, the Internet has not been fair or neutral,” Nieves says. “ISPs have always charged different rates for access speeds, and traffic prioritization has been around for years. What's different relating to this repeal, though, is the theoretical concept of bundling sites into packages like the cable company does with channel lineups.”

This begs the question. What goes on to the realtor or mortgage company whose website generates most of their revenue if they de-prioritize plus some of the market can't even find them? Can a company or lender “pay off” the ISP to incorporate them in the lineup? Many consumers fear this newfound competition will only create conflict, Nieves says, with potential fights between property agencies like those between CBS and Spectrum.

Prediction: Based on Nieves, we avoid unhealthy competition in the property and lending industries by reinventing the wheel.

He says, “The the truth is that innovation always wins. Regardless of what the ISPs attempt to do to control traffic, you will see innovators who will find ways around it and/or create new business models correctly. Look at what Hulu, Roku, and Netflix did to cable.”

For realtors and lenders, this newfound innovation may mean returning to basics — by focusing first on the customer experience. Clients who have a problem accessing a website might not return, making that personal touch and word-of-mouth reputation more important than ever before.

Even using the big changes happening within our digital space, one thing remains the same. Purchasing a house can nonetheless be easy. Download our free LoanFly app and obtain prequalified for a mortgage in minutes.*