Where is a Silicon Valley mentality in the real estate world? That mentality seems to be everywhere else now particularly when Amazon bought Whole Foods so why is real estate still stuck in the 20th C?
Change is hard. Just look around…many people are resistant to change. It’s threatening, it’s anxiety producing, it usually means we have to learn new things, it usually means we have to share what and how and the rewards for what we do.
People in power like to keep their power.
The people in power in the real estate world are and have been real estate agents. The agents are the ones with the local knowledge. The agents are the ones who have the monopoly on listings and listings’ information on the MLS. The agents know the myriad of options related to buying and selling properties and the agents know and understand the complexities of mortgages, contracts, closings, etc. And, agents in the U.S. earn a standard commission of 6%, higher than anywhere else in the world.
Squint to extrapolate the impact of technology on real estate in 10 years from now. Squint even less to see what’s happening right now.
1. Control – Apps such as ForSaleByOwner enable sellers to communicate directly for listings, showings, price histories, valuations, taxes, 360 degree videos of property interior/exterior; interior design alternatives, etc. Such platforms may eliminate the” middleman,” the agent.
2. Accessibility – AI and targeted ads can access the “right” buyer. XOME helps sellers price their home without an agent. EasyKnock and HomeLight help connect the right house with the right buyer…anywhere.51% of homebuyers are finding the properties they’ve bought online. In Q3, 2016, investors forked out $1.8B for real estate start-ups, apps and websites…we don’t know what that number will be yet for Q3, 2017.
3. Price – Right now, Opendoor connects resellers with buyers at a fraction of the cost while retaining many legal protections available with an agent. Redfin is now offering cutting-edge tech plus agents for less cost than the standard 5-6% commission of traditional real estate firms. Free from Zillow, a consumer can hack data about a house to give buyers and sellers meaningful information concerning the “right” price.
4. Public scrutiny – Anyone with an agent can see any house and often potential sellers say “no thanks” because they don’t want “anyone” to be in their house. Right now platforms can connect serious, qualified buying contenders and enable owners to control who walks in and out of their house.
5. Days on the Market – DOM stats can be punishing to buyers if there are “too many” days. Apps such as OpenDoor see buyers as sellers and therefore do away with DOM altogether.
Agents, of course, are essential to the process and the industry of real estate. The key is to continuously define and redefine your role as an agent within the process and the industry. As in every other business, the good ole’ days are over.