Disrupting the Real Estate Sales? Will RE Agents be extinct?
Orlando, FL · Member since 2017 · 241 posts · 254 votes
Disrupting the Real Estate Sales? Will RE Agents be extinct?
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y92% of transactions are run through agents. 8% roughly do not involve agents, and half of those are family to family sales.
If no agency would accept your paper work, maybe the problem then was on your end and not on the 100% of people who were in agreement to not take your paper work.
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Originally posted by @Chuck Kramer:
@Tom Gimer here is one article among many: http://www.orlandosentinel.com/classified/realestate/os-bz-zillow-instant-offers-20170708-story.html
This is an attempt to create another paying client for Zillow... investors. Here is the story directly from Zillow: https://www.zillow.com/instant-offers/
I don't see how this changes much. The seller would still need a professional to help negotiate and close the deal, IMO. If they ignore that reality, that is their problem.
Gimer Law517 Reviews- Orlando, FL · Member since 2017 · 241 posts · 254 votes8y
@Tom Gimer I hear your argument about a licensed profession. And there and a number of highly professional licensed Re agents. Sadly, there are even more who simply took courses designed tonteach you how to pass a test, rather than gain a real understanding,
Its not an exactbparallel, but lets not forget that almost every person behind the wheel is “licensed”, but only a fraction can be considered good drivers.
- Orlando, FL · Member since 2017 · 241 posts · 254 votes8y
@Tom Gimer and how long before that agent is no longer necessary? My own belief, but not necessarily my desire, is that it will be 7 years or less.
- Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes8yChuck Kramer Disagree on recruiting :) If you want data, just look at the stock price of Korn Ferry, Heidrick, etc. over the past 5+ years. They’re doing juuuuuuuust fine. Just like real estate, if there’s a recession things will slide, it gets tougher, but if your recruiting contacts can’t earn today...then they’re like the swaths of unsuccessful realtors that (also) can’t cut it in a commission industry 🤷🏻♂️🤣
- Orlando, FL · Member since 2017 · 241 posts · 254 votes8y
@Andrew Johnson Cannot speak to others, but Korn Ferry moved into working as a contractor/subcontractor/service-provider several years ago with its acquisition of the Hay Group, and that is where there growth has been. I have hired them on several occasions. If you check their financials, the Hay Group is now more than 50% of their revenue and almost 70% of their staff — this is their contracting services group. Executive seach and placement has dropped from 91% in 2011 to under 50% in 2016.
- Rental Property Investor · Dayton, OH · Member since 2015 · 312 posts · 273 votes8y
It would be great if BP developed an auction.com type capability or platform. Something created by investors, for investors would have to be better than Zillow. All the options for a quick buy/sell or auction seem to be so focused on the desires of the seller. It would be nice to see who the seller is, and what the hidden reserve is. But you can't... In my view, there is a definite need to make it more buyer friendly than it is today.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes8y
Originally posted by @Gordon Starr:
It would be great if BP developed an auction.com type capability or platform. Something created by investors, for investors would have to be better than Zillow. All the options for a quick buy/sell or auction seem to be so focused on the desires of the seller. It would be nice to see who the seller is, and what the hidden reserve is. But you can't... In my view, there is a definite need to make it more buyer friendly than it is today.
That requires licensing, auctioneering and or real estate licensing. Simply not practical.
District Invest Group545 Reviews - 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Russell Brazil I had some OREO inventory that I OWNED and I went to hold my own Auction in MS.. and promptly got turned into the department of real estate there by another auctioneer.
turns out you need to be a broker to hold an auction in MS most auction houses hire brokers if not all of them.
I then went and got my MS brokers license..
- Real Estate Agent · Gardena, CA · Member since 2017 · 21 posts · 3 votes8y
I wouldn't go as far as to say extinct, but likely more of an alternative than they have been in the past (more so on the seller rep. side..although I suppose one side directly affects the other) . I don't think the buyers agents are going anywhere any time soon. Agents who represent sellers, I feel, have more to worry about with the tech surge. Frankly, when you get up to a certain price range the commission a seller has to pay out to sell their home is kind of outrageous. Especially when it's a sellers market and the homes are basically selling themselves...
- Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes8yChuck Kramer Either way, the industry is doing just fine. You can’t knock a company for acquiring, growing, diversifying, and expanding. If pundits were right about recruiting, Monster would have killed it. If pundits were right about Zillow, realtors would be dying out. But it’s the economy that kills mediocre recruiters and it also mediocre realtors. And, ironically, when that happens the “dinosaurs” like Russell Brazil that will survive and thrive. If any of the technology solutions delivered, all of this would be a moot point. But they don’t. At least not yet and not in the foreseeable future. Relying on a Zestimate for a value is about as smart as relying on your Monster post for a critical hire. Or trying to use a paper towel to write your retained search engagement contract with Korn/Ferry on 🤣 Just kidding...nearly 20 years in the retained search and recruiting industry has gotten the better of me 🤷🏻♂️
- 8yRick SantasierePro MemberReal Estate Broker · Granby, CT · Member since 2015 · 695 posts · 317 votesThe consumer will always need to be let into property and there will always be the need for sellers to maintain a level of privacy from the “consumer.” With that said, there’s a lot of great thoughts out here, but “disruption” will always, and has always been he way in which we, as a culture ultimately get better at doing things. As a real estate broker, I can guarantee there will be a major shift in what types of services the consumer expects from realtors, and the “disrupters” will fail, then others will learn and do it right. I’m ready for change, and I welcome the disruption. In the end though (and someone already mentioned it), relationships and trust are what drives people to make life altering decisions. Most realtors (who are good) make it a point to be of service and share their expertise to ensure their clients keep coming back, send referrals, and continue to expand their reach.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Rick Santasiere good points... I just watch my wifes transactions.. Mainly a listing agent and on the sell side 100% referral.
she listed out 23of our new builds . and every single sale ( 16 out of 23 homes in the last 3 months) is either another agent or she double ends them.. WE have had ONE sophisticated buyer who wanted to represent himself.. but he had a back ground In building and real estate.
She also just closed another rehabber we did in PDX .. closed today and that buyer represented themselves.. it was a 1031 ..
but generally 95% of people at least home buyers for resi purposes still need help.. they are not up to speed.
now I can see a big difference in the investment end.. But even at that you have the investment marketing companies that help buyers.. they are really present here on BP...
and they do a big business I know I see the huds.. LOL..
Roofstock has come into our Turnkey space and I guess is a disruptor we have half a dozen deals closing with them in the next 3 weeks in IN Cleveland FLA they are in my mind somewhat of a game changer. but they are also licensed brokers in each state, or work with a license broker on a referral basis. I really dig what they have done.. frankly.. now lets just see how smooth my sales go then I can report back.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes8y
@Jay Hinrichs The thing is the people on BP think they know real estate well enough that they dont need an agent....but that is like half a percent of the population. The other 99.5% are split into 2 groups. 95% are completely terrified by the purchase and sale process. Then there are 4.5% that are not, but want to hire a professional because the best use of their time is in working in whatever business they are working in.
Even amongst the people who think they are savy enough though, they simply dont know what they dont know. This goes for 90% of agents too. In my office a few weeks ago, one of my colleagues was on the buy side of a transaction and brought up a fact about the property they were buying at the closing table, that the seller nor the listing agent (Redfin) had not disclosed the cost of the private water utility amount. This might be something specific to Maryland that these even exist, but under state law if the amount of these private utilities are not disclosed, the seller has to pay the full amount of them and all additional years remaining on the bond. This was a $25k mistake, that my colleague brings up at the closing table, sellers go ape ****...title attorney tells them they have no choice, they got to pay it..take it to court, you will 100% lose. They settled there at the table for a $15k payment. Of course if there were no agents on either side it would never come up. That agent sure as hell earned his commission though.
District Invest Group545 Reviews - 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Russell Brazil to funny we would NEVER ever have both the buyer and seller in the same room at the same time.. and of course we are not attorney state. Not to mention the buyers or sellers agents.. talk about potential blow ups..
that is a pretty wild situation were an undisclosed bond becomes one parties liability.. Never heard that one.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes8y
Originally posted by @Jay Hinrichs:
@Rick Santasiere good points... I just watch my wifes transactions.. Mainly a listing agent and on the sell side 100% referral.
she listed out 23of our new builds . and every single sale ( 16 out of 23 homes in the last 3 months) is either another agent or she double ends them.. WE have had ONE sophisticated buyer who wanted to represent himself.. but he had a back ground In building and real estate.
She also just closed another rehabber we did in PDX .. closed today and that buyer represented themselves.. it was a 1031 ..
but generally 95% of people at least home buyers for resi purposes still need help.. they are not up to speed.
now I can see a big difference in the investment end.. But even at that you have the investment marketing companies that help buyers.. they are really present here on BP...
and they do a big business I know I see the huds.. LOL..
Roofstock has come into our Turnkey space and I guess is a disruptor we have half a dozen deals closing with them in the next 3 weeks in IN Cleveland FLA they are in my mind somewhat of a game changer. but they are also licensed brokers in each state, or work with a license broker on a referral basis. I really dig what they have done.. frankly.. now lets just see how smooth my sales go then I can report back.
Jay,
Maybe you can provide some insite into this for me.
I checked out Roofstock's site just now after reading your comment. All of their homes in the Cleveland area are incredibily overpirced. As in I'll be shocked if any of them sell for the prices they have them at. Outside of that I noticed this house.
This house looked really familiar to me. Reason being the Zombie flipper guy reached out to me a month or so ago asking me to sell 50 houses for him. I sent him a follow up email & never heard back. Not really the point. Point is I went on his site to check into him & he's got the same house listed. His house is actually listed for $1.9k more than what is was listed on Roofstock. Both of which are listed about $25k more than what it's actually worth. Were talking low price points to. IE it's worth about $35k, Roofstock has it at $58k & that guy has it on his site for $59.9k...
What's the deal here? You have any insight on what these folks got going on? Spill the beans.
Originally posted by @Chuck Kramer:
Thanks @Noel Challenger! I totally agree that people want, and most need, that human touch on such an important transaction.
Its more than that, a good agent will bring you deals. good ones help you identify the market price, they help you find deals. My realtor has helped me find comps on a refinance she wasn't apart of, she has met someone at a house to let an appraiser in, staged a house for us. SHe has often given us guidance as to when to walk away, and when to run. A good agent will have pocket or off market deals, contacts to contractors, etc.
In return, giving her 6% on an easy deal is just what you do.
There are a lot of places you can save money, trying to cut out a realtor isn't one of them....imo.
And I think for the retail buyer, they need the experience of getting someone thru the process.
- Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes8yMaybe the powerful Realtor lobby can make non-agent sales extinct. NJ and OR you must use an “agent” to pump your gas.
- Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes8y
@Jay Hinrichs Couldn't agree more, buyers and sellers never in the same room together.
It is becoming the norm here in my market for the sellers to pre-sign and for the sellers attorney to either overnight the docs to the buyers attorney or just the sellers attorney alone attends the closing with the buyers.
That is a wild story @Russell Brazil. I'll definitely refer to it when needed.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @James Wise:
Originally posted by @Jay Hinrichs:
@Rick Santasiere good points... I just watch my wifes transactions.. Mainly a listing agent and on the sell side 100% referral.
she listed out 23of our new builds . and every single sale ( 16 out of 23 homes in the last 3 months) is either another agent or she double ends them.. WE have had ONE sophisticated buyer who wanted to represent himself.. but he had a back ground In building and real estate.
She also just closed another rehabber we did in PDX .. closed today and that buyer represented themselves.. it was a 1031 ..
but generally 95% of people at least home buyers for resi purposes still need help.. they are not up to speed.
now I can see a big difference in the investment end.. But even at that you have the investment marketing companies that help buyers.. they are really present here on BP...
and they do a big business I know I see the huds.. LOL..
Roofstock has come into our Turnkey space and I guess is a disruptor we have half a dozen deals closing with them in the next 3 weeks in IN Cleveland FLA they are in my mind somewhat of a game changer. but they are also licensed brokers in each state, or work with a license broker on a referral basis. I really dig what they have done.. frankly.. now lets just see how smooth my sales go then I can report back.
Jay,
Maybe you can provide some insite into this for me.
I checked out Roofstock's site just now after reading your comment. All of their homes in the Cleveland area are incredibily overpirced. As in I'll be shocked if any of them sell for the prices they have them at. Outside of that I noticed this house.
This house looked really familiar to me. Reason being the Zombie flipper guy reached out to me a month or so ago asking me to sell 50 houses for him. I sent him a follow up email & never heard back. Not really the point. Point is I went on his site to check into him & he's got the same house listed. His house is actually listed for $1.9k more than what is was listed on Roofstock. Both of which are listed about $25k more than what it's actually worth. Were talking low price points to. IE it's worth about $35k, Roofstock has it at $58k & that guy has it on his site for $59.9k...
What's the deal here? You have any insight on what these folks got going on? Spill the beans.
don't know but what if there has been a 30k rehab done to it.. we see this all the time you have a home that has been lived in for 20 to 30 years all the components are that old and ya I guess that sells for like you said a 35k price and its serviceable .
but then you have a flipper rehabber buy it and do a top to bottom rehab for 20 to 25k then sell and make 10 to 15k on it like all flippers do.. maybe that's what happening here..
WE have to remember these mid west homes are sold for cash flow.. so if that rents for 700 to 900 a month which who knows it could and a turnkey buyer can pay 60k that's a great price in todays market for that given cash flow and IF its had a top to bottom rehab then its totally in line with all the other turn key companies in the US I know I fund a bunch of them. . If its just an old dog with no rehab then ya then its over priced.. But I am pretty sure Roofstock once they have done their inspections are not going to sell something that is old and broken down.. they are just like any other turnkey remarketer they want fresh rehabs.. they send their own inspectors in to do the home inspection so they Don't End up with a Morris Invest Oceanpointe fiasco IE selling homes that have no rehab .. they do their own independent inspection that they pay for so they know the inspector is working for them.. Once this is all verified its put on their site.. That's how I have seen it done and understand it.
I have been in their offices they have about 40 people on the floor doing analytical and everything on every market in the US they started selling bulk hedgefund portfolios to other big investors.. and now are entering your space.. you should be happy since your part owner of a title company hopefully you will get some of their business. Also realize Roofstock charges the lowest marketing fee's in the industry lower than any of the other name brand out of state marketing companies your familiar with and in line with what your fee's are .. they are just a broker like you are on most of your stuff..
However I would if I was u next time your in Oakland you should pop into their office like I did I have 44 years in this industry and boy it was darn impressive.. Its really cutting edge.. but that's just my opinion in the for what ever its worth file.
So although and back on subject although not a main distrupter to the business as Out of state marketing companies as you know have been around for a decade or more.. this one is the most advanced by a long shot.. And I have seen all the others up close and personal over the years.. Does not mean the others are not fine people to work with.. just in my mind these guys are got 75 million in venture capital and put it into building robust systems for their clients ... I think they are here to stay..
- I think it's not set to go one way or the other. the fact is competition is great and will end with what's best for the consumer. I do think sites like Zillow, as well as the fact there is just so much more information at our finger tips, will hurt Real Estate Agents, but not the good ones. The good ones know their markets inside and out and will provide a great worth every bit of the commission. However, I believe lower quality agents will struggle in the future more than ever if they don't learn and adapt. They can still provide some value, but not enough for people to give up 3-6% consistently. Right now, I'm sure there's some 20 year old scheming in his mom's basement for the next big idea that will wipe out Zillow and give RE Agents a true run for their money (i.e. Netflix to Blockbuster). So, everyone should always be on their toes and ready to adapt!
Originally posted by @Chuck Kramer:
@Tom Gimer and how long before that agent is no longer necessary? My own belief, but not necessarily my desire, is that it will be 7 years or less.
I would say no chance of this. Same thing was said about legalzoom and certain types of lawyers. Just a blip. Good realtors will be fine for a long time.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Will Mann although in general I agree with you.. but as an old dog who has lived through the rise of the computer age.
I remember starting in the business and bringing along my box of carbon paper to make copies for my clients. then you had this stuff invented called NCR paper NO Carbon Required.. that was genius kept us from making a freaking mess with the old carbon paper.. Also when I need to stop and call a client or something I had to find a pay phone ?? now a days I was just at Altanta airport this week I saw a total of ONE pay phone and about the only place I see those now a days is at a port when I am on a cruise ship trip.. or in a internet café were foreigners are calling home.
There was no fed ex had to rely using snail mail... and then they came out with this thing called a fax machine.. but that was OK but the paper was such that the print faded with time.. so you could not really use it for files you would hold a long time.. then there was plain paper fax.. now that was cool
then the scanners came out.. I was afraid of scanners could not figure out how to use them.. but in the last 7 to 8 years I finally figured out how to do it.. once my computer guy made it easy on my desk top and I got a Scansnap from Fujitsu now I could not live without it..
but at the end of the day.. in RETAIL owner occ real estate.. folks just don't really know how it works they need the personal touch.. its belly to belly it has been that way when I started 44 years ago and it will be that way in the next 44 years.. we can do a lot of information collation into the computers that help.. and the days of driving clients around in your car is kind of done..
were I see the distrupter really is the buyers will search on line and do there own search's first before finally calling the agent to get in the house.. Or write the contract..
Investment real estate is different but its still relationship based.. the commercial real estate professional once established they don't even list their listings on any sites until they have sent them to their own buyers.. once their own buyers pass then they may start to let the general public look at them and once they make it to a site like LoopNet means its generally been passed over by many..
I don't see that changing at ALL any time soon. its belly to belly in that part of the business period.
Friends and colleagues I know that own bigger multis IE 10 to 20 million dollar properties. the good brokers somehow get their cell phone.. they work like a good stock broker would in the day they work the phones. NO letters e mails they track them down and get them on the phone. with the pitch being Hey I can get you 15 mil for that building do you want to sell.. or I can sell it today at a 4 cap to a hedge fund you bought at an 8 time to sell.. its all belly to belly.
Good points @Jay Hinrichs. In the end, the strong professionals never knee jerk react to the times. They know where the value is and only adapt when needed. But, when they need to, they are willing and able to make the change. Just in reading your comments, you strike me as someone who will find a way to be successful regardless of whats changing. It might just take a new form of thinking, better use of newer technology, or in some cases, going back to the old ways to make it happen!
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes8y
Originally posted by @Tom Gimer:
Originally posted by @Chuck Kramer:
@Tom Gimer here is one article among many: http://www.orlandosentinel.com/classified/realestate/os-bz-zillow-instant-offers-20170708-story.html
This is an attempt to create another paying client for Zillow... investors. Here is the story directly from Zillow: https://www.zillow.com/instant-offers/
I don't see how this changes much. The seller would still need a professional to help negotiate and close the deal, IMO. If they ignore that reality, that is their problem.
Just from the outside looking in, Zillow Instant Offer appears to be operating as a medium in the underbelly of the wholesaler space, not the retail agents' turf.
Zillow is trying to vet the cash investors of not retail-ready homes for the sellers. A niche that does need help. I wouldn't be inclined to respond to a mailer from someone I don't know because I wouldn't trust em, and I've sold plenty solo- but if a big name vetted and 'qualified' this mostly shady group of cash buyers... List it up and see what you get as is. No obligation.
Sounds a little like an ad I heard on the radio for Rental Warehouse while near Seattle the other day. "Before you sell, call to get a rental analysis on your home. We'll take care of everything for $99 down and $99/mo." Whoa! Competition for traditional PMs out there, too!
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Steve Vaughan Actually I think Auction.com has been somewhat of a disruptor . as they have taken over a lot of bank OREO stuff that would have gone to traditional agents. and they are now even crying sales at the court house steps.. but what I like about them and believe me I don't like to have to use all this on line stuff to purchase etc.. you know me.. but you have to have a real deposit to bid then you have to have a REAL POF ( although there are probably fakes out there) you make an offer in a LLC name or your name and YOU CANNOT change vesting so you HAVE to close in that name and you need usually 3 to 10k NON refundable EM... now that right there being that you need 3 to 5k minimum to bid and up to 10k or more to go into contract in real money.. is a great thing for guys like us.. and it keeps the no money wholesalers from daisy chaining these assets.. I like that part.
now as I said a little frustrating but if we call this disruptors they defiantly changed the landscape and forced someone like me who is use to making the rules into bending to their rules. LOL if that all makes sense.
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