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The realtor and their commission are on borrowed time...........nobody wants to pay 5-6% of the gross sale amount.
Its only a matter of time before zillow/redfin figure it out. They will be like travel agents/stock brokers..........poof gone or morphed into other roles.
The realtor and their commission are on borrowed time...........nobody wants to pay 5-6% of the gross sale amount.
Its only a matter of time before zillow/redfin figure it out. They will be like travel agents/stock brokers..........poof gone or morphed into other roles.
I can see it already. Zillow comes out with their Z-agent online buying/selling experience. Now you get to pay 4% to have some poorly paid outsourced worker fill out your critical documents and negotiate on your behalf. Have a major issue requiring immediate attention? No worries, our chat-bot (complete with stock photo of a friendly looking person wearing a headset) is here 24/7 to spit out canned answers vaguely related to what you asked about!
When my Aunt went into a nursing home a couple of years ago, I was able to sell hers through "word of mouth", her next door neighbor's mechanic had told the neighbor he was looking for a home in the area, and he put us together. The upside for the neighbor was that he was able to "choose" who his new neighbor would be (instead of getting an extended family with ten kids moving in next door). I was physically unable to do much in her home except for boxing up her personal possessions (which I've had in my home ever since, but most of her clothes are going to Salvation Army in the next few weeks), and discounted the home accordingly. The buyer had to put in some sweat equity, but my Aunt's take wasn't all that much less than if I had paid someone to prep and list it, it was far and away "worth it" to me, and I would love to sell my own home in the same manner and price range - I used a local real estate attorney for the purchase contract and to handle the closing, for peace of mind for all concerned.
The first thing I intend to do on my own, is whenever I see my own neighbors outside in the coming months, is to ask them whether they have any friends or relatives looking to live near them.
The realtor and their commission are on borrowed time...........nobody wants to pay 5-6% of the gross sale amount.
Its only a matter of time before zillow/redfin figure it out. They will be like travel agents/stock brokers..........poof gone or morphed into other roles.
Nah. The real estate agent system isn't going poof any time soon. Most of the home buying and selling public are ignorant sheep that can be manipulated by a savvy agent. That's not going to change.
The realtor and their commission are on borrowed time...........nobody wants to pay 5-6% of the gross sale amount.
Its only a matter of time before zillow/redfin figure it out. They will be like travel agents/stock brokers..........poof gone or morphed into other roles.
You think Zillow, Redfin, etc work for free? Nothing is free, my friend. And if your prediction does hold water, just wait for those companies to start gouging the consumer of money - especially if there is less competition. Your dream may turn into a nightmare.
The realtor and their commission are on borrowed time...........nobody wants to pay 5-6% of the gross sale amount.
Its only a matter of time before zillow/redfin figure it out. They will be like travel agents/stock brokers..........poof gone or morphed into other roles.
Then why hasn't it happened? Not everything can be made redundant with technology. REA's are more akin to insurance agents, or wedding planners. One can plan a wedding, or buy insurance, or sell their house, without one, and certainly there are plenty of examples where the agent adds little to no value. But there are plenty of situations where the value is there.
Anyhow, there are plenty of discount or flat fee listing brokerages out there, and have been for some time.
I can see it already. Zillow comes out with their Z-agent online buying/selling experience. Now you get to pay 4% to have some poorly paid outsourced worker fill out your critical documents and negotiate on your behalf. Have a major issue requiring immediate attention? No worries, our chat-bot (complete with stock photo of a friendly looking person wearing a headset) is here 24/7 to spit out canned answers vaguely related to what you asked about!
4% is not cheap enough........the commission based on the gross sale is simply wrong especially in a down market sale. Buyer could be coming to the table with checks to get the deal done!
Stock brokers used to get paid commissions, now you buy/sell for a flat trade fee or in some cases no fee.
Travel agents used to book your flights/hotel/rental cars.............now who does it? Expedia/priceline etc.
So once the industry figures it out, the realtor will be gone just like the broker/travel agent. They will morph into other duties. They will still service the high end market (5mm+ houses) but there sure will be a lot less soccer mom agents out there.
4% is not cheap enough........the commission based on the gross sale is simply wrong especially in a down market sale. Buyer could be coming to the table with checks to get the deal done!
Stock brokers used to get paid commissions, now you buy/sell for a flat trade fee or in some cases no fee.
Travel agents used to book your flights/hotel/rental cars.............now who does it? Expedia/priceline etc.
So once the industry figures it out, the realtor will be gone just like the broker/travel agent. They will morph into other duties. They will still service the high end market (5mm+ houses) but there sure will be a lot less soccer mom agents out there.
But... People LIKE working with soccer moms and Little League coaches. And in-law agents. And cleavage. And low handicap golfers.
Etc.
Travel agents?
They are reduced, but not gone. They also have no fiduciary function.
Agents who offer good guidance and advocacy have little to fear.
The $300,000 house deal gone wrong generally impacts that owner or buyer as much as a $5 million deal gone wrong impacts that owner or buyer.
Then why hasn't it happened? Not everything can be made redundant with technology. REA's are more akin to insurance agents, or wedding planners. One can plan a wedding, or buy insurance, or sell their house, without one, and certainly there are plenty of examples where the agent adds little to no value. But there are plenty of situations where the value is there.
Anyhow, there are plenty of discount or flat fee listing brokerages out there, and have been for some time.
Quote:
Originally Posted by Sno0909
You think Zillow, Redfin, etc work for free? Nothing is free, my friend. And if your prediction does hold water, just wait for those companies to start gouging the consumer of money - especially if there is less competition. Your dream may turn into a nightmare.
I'm not a realtor but if you aren't smart enough to look down the pipeline and see that the industry is going to bypass you then that's on you. I've given the stockbroker/travel agent analogy and those industries got wiped out with a click of a mouse. A realtor's transaction costs are too high for what they do! The whole transaction is focused on price from the selling price to the mortgage rate so at some point someone will see that line item commission as ridiculous and come up with a better model.
I'll give you a 2019 example: My sister just moved to a new area, she had previously lived within 40 miles of this place but it was over a state line. She was shopping from 1000 miles away in a fairly hot market and knew the school district/area she wanted to live in.
She narrowed her search to about 10 houses. Clicked a Redfin agent and forwarded a list of the 10. Agent set up the showings, my sister flew in Friday night, saw the 10 on Saturday, signed a contract Sunday and flew home. Closed within 45 days. That whole transaction started with the internet, the realtor was essentially a chaperone. One of the houses was only accessible by cutting through a rough area, the agent did point that out before the showing but my sister said it was very noticeable on the ride over. The agent offered very little input outside of that.
My sister and her husband were qualified buyers, 25% down, pre-approved mortgage, perfect credit so the realtor didn't need to hand hold them, help them with anything. They sold their former house (it had been rented for 10+ years) with the "local neighborhood specialist" and it was a disaster. That agent was hoping to handle the buy side of the new house (40 miles away, she was licensed in that state also) but my sister said the redfin plan worked out perfect and she was interested in fast/no hassle.
Total value of the real estate involved was 678K.......so not NYC prices but the concept works on all levels.
Using the "neighborhood favorite realtor" wasn't beneficial. In my own neighborhood the "local favorite" loves to quote fast sales (under contract in 12 days type thing) but her price per square foot is the lowest also. I bet you could get a same day contract every time if you give the property away........
I personally know 6-7 realtors, like their contacts are in my phone and I call/text them about stuff outside of real estate. I would not hire 5 of them for my personal home. One girl is a straight up hustler (she also is the broker/owns the office) and the other has been selling good for 2-3 years. The other area agent is a superstar but I don't know her. She has sold stuff on my street and thinks way way outside the box. If I was listing today, I'd call the 2 I know and the 3rd agent and tell all 3 who they are up against and get them to pitch me their ideas for selling the property. The listing agent will be the one with the best strategy. All 3 coincidentally had set records for high sales in my neighborhood, only to get bested by the other 2.
If I was buying, I'd be searching realtor.com and other sites for houses I like/areas under consideration.
The technology is improving, the price per square foot numbers are easily accessible to anyone so the "lock on the market once held by the MLS/realtors" is losing ground fast. You would be blind not to see that big changes are coming down the line. Covid might have sped up the "virtual tour" concept so it is more acceptable to more buyers, further decreasing the need for the chaperone realtor to unlock the front door.
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