If you were to reform the Real Estate Sales processes, what would want changed?

sgip

Well-known member
This week I've had two buyers offers rejected without a counteroffer - only crickets from the listing Agent. Another buyer is being mistreated (their words, not mine) in a dual agency situation. Another buyer still has been told "all offers are in", but when a different Agent calls to see if the home is off market, it's all "come on in, the water's fine!" and told to send in their offer.

This level of less than consumer friendly behavior is common when sales are easy. Once sales become difficult, thankfully most of these agents are bounced out - as they were in 2007-2010. Unfortunately, a great number of home buyers and sellers get run over in between the good and the bad times.

If you were able to make one change to the industry that would make the buying or selling process more open, transparent, or able to make the industry itself better, what would you want done?

My wish - The NMLS licensing system has a much more rigorous standard than those requirements found to obtain a Real Estate license. If you have a BK, foreclosure, or other significant credit issues, your license is in trouble. Additional training every year in some cases is needed to keep your license current - not so with Real Estate Agents.

Raising licensing requirements to the same level as the NMLS has for LO's would be a huge step in the right direction, winnowing out some of the problem agents as it has done in the mortgage industry. There still are plenty of cutting to do, but not as much as before simply because of rigorous licensing standards.

What say you?

My .02c

SGIP
 
This is a fundamental issue though...the whole real estate selling/buying process is meant to be reasonably opaque.  Sellers and buyers do not have similar goals.
 
True, but some have suggested a way to upload offers to let all buyers and the seller know that offers are coming in, rather than the listing agent gatekeeping offers away. That's not tipping prices or terms, but ensuring that all offers are submitted.

Purplebricks has a rudimentary version of this. Not a complement since "rudimentary" is the key word here. At least it's a try though.
 
standardized single web browser-based buying and selling process where seller is presented with all comps in the area, fills out details themselves (sale price, close date, leaseback term/rate if any, etc.) and seller can pay extra if they want a real person to review the listing and offer advice re: price, structure, etc. and then seller can book staging, touch up repairs, etc.  open house dates are posted, if you want to have a "sales person" at the open house you can book that too.  offer window is clearly defined with countdown timer (and no bs calling for final and best offers, first offer is your best). 

buyers are all vetted and must have approval in "the system" in order to bid on homes, with earnest money already deposited and down payment ready with loan verified before being able to bid on homes.  banks in the system then bid for the loan based on buyer's verified credit history, income, etc. and best rates are automatically chosen for buyer.  buyer is now approved for a max loan amount and they can bid up to max loan.  buyer can then begin to bid on homes in their price range.

all one system, if you want in the system you need to be an approved vendor / service provider

an authoritarian-esque real estate platform, if you will
 
Soylent Green Is People said:
True, but some have suggested a way to upload offers to let all buyers and the seller know that offers are coming in, rather than the listing agent gatekeeping offers away. That's not tipping prices or terms, but ensuring that all offers are submitted.

Purplebricks has a rudimentary version of this. Not a complement since "rudimentary" is the key word here. At least it's a try though.

Then you would eliminate RE agents...if you have sufficient clarity/transparency...the middle person is unnecessary.  Just like how travel agents are no longer in demand.
 
I agree that more barriers to entry for RE agents would help.  Maybe a degree requirement or something that demonstrates a basic level of competency.

There are more stringent standards to buy/sell/lease commercial real estate as an agent, so maybe apply those same standards to the residential market.
 
Kings - I'd say we're about 7-10 years away from that. E-Mortgages (Rocket, etc) will help. An Amazon entry to the biz will be more of a shove in the right direction than anything else. Any homeowner over 50 still for the most part isn't computer savvy enough to effectively complete an e-sale. Any homeowner under 50 is getting more comfortable with tech and will be expected to e-sale.

IrvineCommuter - There still are travel agents, even buggy whip makers out there. For the very technical deals, or those who are wanting a Nordstrom/concierge level sales experience, a skilled, professional Real Estate Agent will absolutely be required.
 
As SGIP mentioned, it's so easy to get a real estate license that it's scary.  The standards need to be bumped up....college degree required with a certain number of analytical type classes required (math, stats, accounting, finance, etc) along with a more difficult test (doesn't have to be the 4 part CPA exam but make it more challenging then the joke of the exam that it is today).  Then require newbie agents to have to work under an experienced broker for 2+ years and sign-off to become a full pledged agent would be required (similar to getting a sign-off to get your CPA). Increase the continuing education requirements. That would be a good start, but the NAR/CAR will not do any of that because that would decrease the fees that the organizations collect which would decrease their lobbying power. 

From a commission standpoint, the whole commission structure needs to be revamped to better align the interest of the agents with their clients.  The standard commission structure is older than the Egyptian pyramids.  But again, old habits die hard for realtards and most can think their way out of a paper bag let alone come up with some unique out-of-the-box commission structure. 
 
USCTrojanCPA said:
As SGIP mentioned, it's so easy to get a real estate license that it's scary.  The standards need to be bumped up....college degree required with a certain number of analytical type classes required (math, stats, accounting, finance, etc) along with a more difficult test (doesn't have to be the 4 part CPA exam but make it more challenging then the joke of the exam that it is today).  Then require newbie agents to have to work under an experienced broker for 2+ years and sign-off to become a full pledged agent would be required (similar to getting a sign-off to get your CPA). Increase the continuing education requirements. That would be a good start, but the NAR/CAR will not do any of that because that would decrease the fees that the organizations collect which would decrease their lobbying power. 

From a commission standpoint, the whole commission structure needs to be revamped to better align the interest of the agents with their clients.  The standard commission structure is older than the Egyptian pyramids.  But again, old habits die hard for realtards and most can think their way out of a paper bag let alone come up with some unique out-of-the-box commission structure.

You have a double-edged sword here.  The question is whether a real estate agent should be a "salesperson" or an expert in real estate.  The current state of the law is that the real estate agent is a salesperson with some knowledge but not a lot.  A real estate agent owes a duty of loyalty to his/her client but not a high level of duty.  They are only required to disclose known and/or obvious defects, identify any conflicts of interests, and not make any misrepresentations.  I mean, the law even provides for an agent to represent both parties, which results in even fewer duties for the agent.

The more knowledge and expertise you require a real estate agent to have, the more liability you impose on a real estate agent.  It's not a right or wrong thing, it's just a double-edged sword.
 
Irvinecommuter said:
USCTrojanCPA said:
As SGIP mentioned, it's so easy to get a real estate license that it's scary.  The standards need to be bumped up....college degree required with a certain number of analytical type classes required (math, stats, accounting, finance, etc) along with a more difficult test (doesn't have to be the 4 part CPA exam but make it more challenging then the joke of the exam that it is today).  Then require newbie agents to have to work under an experienced broker for 2+ years and sign-off to become a full pledged agent would be required (similar to getting a sign-off to get your CPA). Increase the continuing education requirements. That would be a good start, but the NAR/CAR will not do any of that because that would decrease the fees that the organizations collect which would decrease their lobbying power. 

From a commission standpoint, the whole commission structure needs to be revamped to better align the interest of the agents with their clients.  The standard commission structure is older than the Egyptian pyramids.  But again, old habits die hard for realtards and most can think their way out of a paper bag let alone come up with some unique out-of-the-box commission structure.

You have a double-edged sword here.  The question is whether a real estate agent should be a "salesperson" or an expert in real estate.  The current state of the law is that the real estate agent is a salesperson with some knowledge but not a lot.  A real estate agent owes a duty of loyalty to his/her client but not a high level of duty.  They are only required to disclose known and/or obvious defects, identify any conflicts of interests, and not make any misrepresentations.  I mean, the law even provides for an agent to represent both parties, which results in even fewer duties for the agent.

The more knowledge and expertise you require a real estate agent to have, the more liability you impose on a real estate agent.  It's not a right or wrong thing, it's just a double-edged sword.

I see what you are saying, but the bar is so low than pretty much anyone can get a real estate license (including someone with little to no education).  You would think that the governing boards would want to ensure that the people entrusted to assist the public in the most expensive transaction in their lives would be higher quality. I consider myself as more of a real estate consultant than I do a sales person.  I don't think there would be anything wrong with making it a bit more difficult to become a realtor, might weed out the weak links right off the bat. Watch how much deadwood will be plucked out of the industry in the next downturn.  I guess I was lucky that I started out in the right when things were falling apart.
 
Many jobs have liability. Doctors, lawyers, public accountants, etc.  why can?t real estate agents?
 
Irvinecommuter said:
Soylent Green Is People said:
True, but some have suggested a way to upload offers to let all buyers and the seller know that offers are coming in, rather than the listing agent gatekeeping offers away. That's not tipping prices or terms, but ensuring that all offers are submitted.

Purplebricks has a rudimentary version of this. Not a complement since "rudimentary" is the key word here. At least it's a try though.

Then you would eliminate RE agents...if you have sufficient clarity/transparency...the middle person is unnecessary.  Just like how travel agents are no longer in demand.

Not really, you still need an RE agent to explain the terms of the offers, to counter and to advise.

I agree with SGIP that the sellers should be able to see ALL offers, not just the ones that favor an agent who would use their position to do so.

Additionally... I would like to see the elimination of any counters that are "Give me your best and final offer". :)
 
qwerty said:
Many jobs have liability. Doctors, lawyers, public accountants, etc.  why can?t real estate agents?

They have liability too...just lower standards.  Again...neither the public nor the law seem to want to hold RE Agents to that level of professional liability. 
 
irvinehomeowner said:
Irvinecommuter said:
Soylent Green Is People said:
True, but some have suggested a way to upload offers to let all buyers and the seller know that offers are coming in, rather than the listing agent gatekeeping offers away. That's not tipping prices or terms, but ensuring that all offers are submitted.

Purplebricks has a rudimentary version of this. Not a complement since "rudimentary" is the key word here. At least it's a try though.

Then you would eliminate RE agents...if you have sufficient clarity/transparency...the middle person is unnecessary.  Just like how travel agents are no longer in demand.

Not really, you still need an RE agent to explain the terms of the offers, to counter and to advise.

I agree with SGIP that the sellers should be able to see ALL offers, not just the ones that favor an agent who would use their position to do so.

Additionally... I would like to see the elimination of any counters that are "Give me your best and final offer". :)

Some people may but I think that is going to be less and less.  I mean mortgage brokers used to be a lot more hands on but a lot of people also bypass mortgage brokers now.
 
Irvinecommuter said:
Some people may but I think that is going to be less and less.

Sure, but booking a flight and a hotel is a much different animal than buying a house.

I mean mortgage brokers used to be a lot more hands on but a lot of people also bypass mortgage brokers now.

What do you mean? Most people still have to use a broker or a bank.

I actually prefer a broker over a bank has they can find a wider variety of products/rates.
 
irvinehomeowner said:
Irvinecommuter said:
Some people may but I think that is going to be less and less.

Sure, but booking a flight and a hotel is a much different animal than buying a house.

I mean mortgage brokers used to be a lot more hands on but a lot of people also bypass mortgage brokers now.

What do you mean? Most people still have to use a broker or a bank.

I actually prefer a broker over a bank has they can find a wider variety of products/rates.

Yes but more and more are doing their own legwork. 

Within the next 5 to 10 years, a resounding YES (and no artificial intelligence required). In fact, for some companies it may have already happened. The field is getting crowded with contenders like, Sindeo, RocketMortgage, Lenda, Clara, Better and software providers like Blend and Roostify. At least one of them will figure out how to close north of 20 loans per month per broker, if they haven?t already (RocketMortgage by Quicken closed $7 billion in originations in 2016, but it is unclear what their per broker productivity level is for this new product). Furthermore, cultural, technological and regulatory headwinds are are blowing in the right direction.
https://medium.com/fintech-devs-pms...-but-the-gains-for-consumers-are-22e6a9ac8fd7

Yes...there are still people who like RE agents and use them (especially out of state/country clients) but a significant portion of population can and will do it on their own.  Offers are form in nature anyways. 
 
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