Are Realtors the Next to Get Disrupted?

HelpUSell has been around since at least the 80s and is a very good flat price option. I think disruption is now continuous. The issue is disruption seems to usually mean lower salaries/wages/revenue (ROI aspect). Even Amazon is paying people at its warehouse so low that they make Wal-Mart look good.

The issue is while it seems an expensive home is good for these choices, if you are not flooded with enough self-service buyers, selling can be tricky. The transaction itself and such is no different once you have a qualified buyer with these low-cost agencies.

Rasheed

The other area ripe for disruption is title insurance and blockchain technology could, in theory, disrupt the industry by maintaining guaranteed chains of title.

Of course, the Torrens system should have already obsoleted the title insurance industry.

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As someone who has a Realtors licenseā€¦but doesnā€™t really practice (I use it for my own investing, and help a few people per year)ā€¦I can see both sides of the coin.

The reality is it is a serviceā€¦ there is nothing wrong with doing it yourselfā€¦but the vast majority of the public donā€™t feel comfortable doing such a large transaction on their own, particularly when they have never done it, or only do it a few times in their adult lives.

In a red hot marketā€¦a seller can probably put their place FSBO on Zillow and sell it. In a normal or slow market, thatā€™s likely not going to work.

On the flip sideā€¦a buyer in a red hot market is going to get really frustrated, really fast. As Zillow is delayed a day or two from getting MLS feedsā€¦and by then the house could be gone.

That gets to the ace up the sleeve of the Realtors associations. The MLSā€¦Realtors own it, they are the gate keepers. Zillow is out of business tomorrow if Realtors decide to cut off their feed.

So no, I see it very unlikely that theyā€™ll be too disrupted.

BTW, Redfin is nothing but another broker with another pricing model. Every city has always had discount brokersā€¦I got discounts/rebates on every home Iā€™ve personally bought/sold in last 20 years. Just ask for itā€¦nobody should be paying 6% unless you are under say $125-150k range.

Finally. Donā€™t underestimate peopleā€™s cluelessness when it comes to negotiations. And Iā€™m not just talking the price. Inspection repairs are the biggest hangup I see occurā€¦and if one party is clueless, belligerent, or whateverā€¦it can become a mess real quick. People often become very emotional about their homes and having agents mediate often really moves things along when problems come up (inspection, closing, mortgage, etcā€¦)

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So I actually have a RE license here in Florida. Iā€™ve only used it to represent myself and a few friends of my parentā€™s who know exactly what they want, and in turn, I kick back ~75% of the commission.

It cost me about $50, a case of beer, and an all-nighter to complete the course, along with about $400 and a few hours to pass the exam and get fingerprinted, etc.

In certain areas of the country, having access to the MLS is still useful. For example, where I live now, it takes 3-5 days for listings to propagate to Zillow, Realtor.com, etc. Nonetheless, personally, I am not a member of any MLS since the fees they charge are simply obscene, in large part because most of that money goes straight to the Realtor lobby. Itā€™s insane the amount of power those guys have when frankly, Realtors are by and large greedy idiots.

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Your math checks out.

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[quote=ā€œrascott, post:23, topic:2141, full:trueā€]
As someone who has a Realtors licenseā€¦but doesnā€™t really practice (I use it for my own investing, and help a few people per year)ā€¦I can see both sides of the coin.

The reality is it is a serviceā€¦ there is nothing wrong with doing it yourselfā€¦but the vast majority of the public donā€™t feel comfortable doing such a large transaction on their own, particularly when they have never done it, or only do it a few times in their adult lives.

In a red hot marketā€¦a seller can probably put their place FSBO on Zillow and sell it. In a normal or slow market, thatā€™s likely not going to work.

On the flip sideā€¦a buyer in a red hot market is going to get really frustrated, really fast. As Zillow is delayed a day or two from getting MLS feedsā€¦and by then the house could be gone.

That gets to the ace up the sleeve of the Realtors associations. The MLSā€¦Realtors own it, they are the gate keepers. Zillow is out of business tomorrow if Realtors decide to cut off their feed.

So no, I see it very unlikely that theyā€™ll be too disrupted.

BTW, Redfin is nothing but another broker with another pricing model. Every city has always had discount brokersā€¦I got discounts/rebates on every home Iā€™ve personally bought/sold in last 20 years. Just ask for itā€¦nobody should be paying 6% unless you are under say $125-150k range.

Finally. Donā€™t underestimate peopleā€™s cluelessness when it comes to negotiations. And Iā€™m not just talking the price. Inspection repairs are the biggest hangup I see occurā€¦and if one party is clueless, belligerent, or whateverā€¦it can become a mess real quick. People often become very emotional about their homes and having agents mediate often really moves things along when problems come up (inspection, closing, mortgage, etcā€¦)
[/quote]Everything that you mentioned is right on. To me, the issue with real estate agents if the fact that the entry barriers are incredibly low, such that the market is flooded with incredibly inexperienced and frequently incompetent agents who provide very little or no value to their clients, and, in many cases, can actually be a net negative.

To me, this is the biggest problem with the industry, as people who donā€™t know much about real estate also donā€™t know how to differentiate among good and bad agents. So, they either blindly call up an agent who happens to be advertising in the area, or ask for referrals. The latter would be a good strategy, except that most people whom theyā€™re asking know just as little about real estate as they do, so theyā€™re just as likely to get referrals to incompetent agents.

Having said that, the vast majority of the population, including those who say that they really donā€™t need an agent, actually knows practically nothing about residential real estate, and could benefit quite a bit from a competent real estate agent. In the right situation, a competent real estate agent can actually add a lot of value, but knowing whom to hire and at what price is a definite problem that most people face.

Yes, the commission rebating model has been around for quite some time, and you can frequently do a lot better than Redfin or any of the other large rebating agencies, both in terms of the commission rebates and the actual service. On our last purchase, for instance, our commission rebate was 70% from a highly experienced agent, but it really depends on your level of experience (meaning how much or how little handholding you require from an agent) and the purchase price.

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I just bought a FSBO and sold via MLS (spouse didnā€™t want to do another FSBO). In my limited experience in a small market, Zillow was faster than MLS in posting information.

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