Can Web Replace RE Agents?

[NoSoup4U]

http://lansner.ocregister.com/2011/06/17/web-wont-replace-real-estate-agents/113939

I always wondered how long it would take for the web to replace the RE agent.  I figure as the non-tech savvy older generation get phased out (i.e. die) this would create opportunities for buyers and sellers to save on the ridiculous amounts on commission.  What is the biggest obstacle to accomplishing this?  Is the NAR using all their resources to prevent this from happening?  At the very least, I could save on buyer agent commissions by using a relative's access to the MLS and searching for homes I am interested in.  I could then have him show me the homes that are vacant or just use his Supra key (I am sure this is illegal though).  For the non-vacant homes I could just contact the listing agent myself and schedule a time with the occupant.

Off the top of my head, here are some things that a buyer would need to do away with buying agents:

1) Access to the MLS or another site that is updated as often (sites like Redfin are slow to update).  We also need the listing agent's contact info

2) Access to the Supra key.  Perhaps we can have people rent this device while collecting all their info so they do not abuse this by throwing parties in vacant homes (how is this controlled right now if an agent shows the house and something gets damaged?).

I figure if someone is smart enough to afford an 800k home then he/she should be smart enough to accomplish the tasks that a buyer's agent does.  If I am not mistaken, all the difficult legal situations are taken care of by the escrow company and not the buyer's agent.

What else am I missing?

 

[usctrojancpa]

http://lansner.ocregister.com/2011/06/17/web-wont-replace-real-estate-agents/113939

I always wondered how long it would take for the web to replace the RE agent.  I figure as the non-tech savvy older generation get phased out (i.e. die) this would create opportunities for buyers and sellers to save on the ridiculous amounts on commission.  What is the biggest obstacle to accomplishing this?  Is the NAR using all their resources to prevent this from happening?  At the very least, I could save on buyer agent commissions by using a relative's access to the MLS and searching for homes I am interested in.  I could then have him show me the homes that are vacant or just use his Supra key (I am sure this is illegal though).  For the non-vacant homes I could just contact the listing agent myself and schedule a time with the occupant.

Off the top of my head, here are some things that a buyer would need to do away with buying agents:

1) Access to the MLS or another site that is updated as often (sites like Redfin are slow to update).  We also need the listing agent's contact info

2) Access to the Supra key.  Perhaps we can have people rent this device while collecting all their info so they do not abuse this by throwing parties in vacant homes (how is this controlled right now if an agent shows the house and something gets damaged?).

I figure if someone is smart enough to afford an 800k home then he/she should be smart enough to accomplish the tasks that a buyer's agent does.  If I am not mistaken, all the difficult legal situations are taken care of by the escrow company and not the buyer's agent.

What else am I missing?

Honestly, the large brokerage based commission model needs to go first...the only ones benefiting there are the brokers and the franchisors.  I'm all for empowering the buyers and sellers, but there will always be those buyers that don't know all the in's and out's of a real estate transaction and/or buyers who want someone to handle all the paperwork for them.  That being said, the NAR is a very powerful lobbying focus and they will not go down quietly. 

 

[NoSoup4U]

the NAR is a very powerful lobbying focus and they will not go down quietly.

That's what I'm afraid of.  It's like trying to take down big tobacco.  We need a company like Google to spearhead this.

 

[usctrojancpa]

the NAR is a very powerful lobbying focus and they will not go down quietly.

That's what I'm afraid of.  It's like trying to take down big tobacco.  We need a company like Google to spearhead this.

The problem is that no company like Google will spearhead to take down the NAR unless they stand to make money for their time and effort. 

 

[irvinehomeowner]

Access to the Supra Key should never be granted to non-licensed buyers.

Would you list your home knowing that anyone who has Internet access can unlock your door and roam through your home without someone being responsible for them?

 

[NoSoup4U]

Access to the Supra Key should never be granted to non-licensed buyers.

Would you list your home knowing that anyone who has Internet access can unlock your door and roam through your home without someone being responsible for them?

Agreed.

2) Access to the Supra key.  Perhaps we can have people rent this device while collecting all their info so they do not abuse this by throwing parties in vacant homes (how is this controlled right now if an agent shows the house and something gets damaged?).

 

[irvinehomeowner]

Even if it collects their info... any type of arrangement that opens up your private property to a stranger with no professional sanctioning is just not worth it. This doesn't even take into account the type of security that would have to in place to prevent fraud to enable such a rental.

 

[NoSoup4U]

Maybe just have the owner or listing agent coordinate a time to be present?  I also think that more detailed pictures should be present in a listing.  And to avoid the camera tricks with wide angled lenses, we should also utilize a video walk-through posted on Youtube.  This will help buyers filter out the properties they don't like.

I can understand how out of towners might want to use a buying agent but I honestly think that with an hour or two of research on the web, we can get all the knowledge that most buying agents can provide.

 

[usctrojancpa]

Maybe just have the owner or listing agent coordinate a time to be present?  I also think that more detailed pictures should be present in a listing.  And to avoid the camera tricks with wide angled lenses, we should also utilize a video walk-through posted on Youtube.  This will help buyers filter out the properties they don't like.

I can understand how out of towners might want to use a buying agent but I honestly think that with an hour or two of research on the web, we can get all the knowledge that most buying agents can provide.

Sure you can get a lot of information from the web, but a lot of information comes from MLS which is controlled by local realtor associations.  You'll get about 80% of the information that is out there but a good buyer's agent will fill in the gaps.  Having gone around to many different villages, tracts, and floor plans...I'm sure I can give you more insite than you'd be able to find on the web...details like that matter sometimes. 

 

[NoSoup4U]

Sure you can get a lot of information from the web, but a lot of information comes from MLS which is controlled by local realtor associations.  You'll get about 80% of the information that is out there but a good buyer's agent will fill in the gaps.  Having gone around to many different villages, tracts, and floor plans...I'm sure I can give you more insite than you'd be able to find on the web...details like that matter sometimes. 

True, but there are also a lot of agents out there who have zero knowledge of the villages I am interested in.  I think forums like this can almost answer any question a buyer might have.  I have been registered with this site for only a short time and I have learned more than I could have from 90% of agents.

I don't have all the answers but I do see an opportunity to replace these agents.  Someone just needs to figure out a way to monetize the idea.

 

[usctrojancpa]

Sure you can get a lot of information from the web, but a lot of information comes from MLS which is controlled by local realtor associations.  You'll get about 80% of the information that is out there but a good buyer's agent will fill in the gaps.  Having gone around to many different villages, tracts, and floor plans...I'm sure I can give you more insite than you'd be able to find on the web...details like that matter sometimes. 

True, but there are also a lot of agents out there who have zero knowledge of the villages I am interested in.  I think forums like this can almost answer any question a buyer might have.  I have been registered with this site for only a short time and I have learned more than I could have from 90% of agents.

I don't have all the answers but I do see an opportunity to replace these agents.  Someone just needs to figure out a way to monetize the idea.

Oh believe me, I've discussed the idea with a few people.  It's easier said than done, especially when you are going up against a 500lb gorilla like the NAR and local realtor associations.  Old habits die hard.  Most of my buyers tend to be very sophisticated and have done a lot of research on their own and don't need me to hold them by the hand.  Because of that I employ my commission rebate structure that is based upon 3 factors....purchase price, commission percentage, and time/effort spent.  I think my model better aligns my incentive to those of my buyers. 

 

[NoSoup4U]

I employ my commission rebate structure that is based upon 3 factors....purchase price, commission percentage, and time/effort spent.  I think my model better aligns my incentive to those of my buyers.

Interesting. So if I only needed access to the MLS and I did all my own searches and I arranged all showings.  I can even fill out my own RPA's.  How much would you charge me for a 700k house?  Flat fee?

 

[usctrojancpa]

I employ my commission rebate structure that is based upon 3 factors....purchase price, commission percentage, and time/effort spent.  I think my model better aligns my incentive to those of my buyers.

Interesting. So if I only needed access to the MLS and I did all my own searches and I arranged all showings.  I can even fill out my own RPA's.  How much would you charge me for a 700k house?  Flat fee?

Yeah, if all you wanted was for me to open the home and handle some paperwork (I have to complete my broker file and get some escrow paperwork handed) I'd be open to a flat fee arrangement or a rebate that is higher than Redfin.  I did that before with one buyer....I didn't even see the home until about a month after they closed.  I can be as hands on or off as my clients need me to be and obviously the less hands on I am the more I rebate....simple concept, eh? 

Btw, keep in mind that if you are financing the purchase the lender will only allow you to use any credit/s up to your actually closing costs.  Seller and/or buyer's agent commission rebates can not be used for any part of your equity if the purchase is financed.

 

[sgip]

I work with Redfin as a preferred lender. Many of my contacts for mortgage loans - refi and purchase - do not use Redfin for anything else other than data. The pull through from those buyers who first start with the mortgage processing, then look for a Realtor, appears to be in the 30-40 percent range. That means 60% or so of buyers I've met through Redfin are seeking out the services of a traditional Realtor.  The experienced buyer often will choose a traditional Realtor because Redfin has a more "do it yourself" system. The newbie also wants some measure of hand holding through the purchase process. I like Redfin's business model. Their adherence to transparency during the entire transaction from first contact to closing survey is admirable. I very much believe it's the way ahead for the industry, but that transition period is going to take some time. As buyers become more used to electronic interaction than face to face, the traditional Realtor's need will begin to diminish.

I got quite a bit of heat on RF for saying that traditional Realtors will soon find themselves in the same place Travel Agents have. You might need a good TA to help book a complex trip, but for the most part Expedia, et al, can do almost everything better, faster, with greater accuracy, and cheaper. I believe this will also be the pathway forward for Mortgage Loan Professionals as well. Any information heavy industry is going to see their value crammed down to that of a buggy whip.

Need more proof? Look at what this company has created:

www.mortgageharmony.com

A self directed resetting mortgage rate that requires no reapplication, appraisal, or re-qualification. Yes, today it's for what appears to be a 5/1 ARM loan only. That's the current "gimmick" or "hook", but if you think back, wasn't Zillow's "Zestimate" a gimmick? Wasn't LendingTree also a pretty dodgy start-up in the beginning as well? History isn't kind to those who mock innovation. They are usually proved very wrong in the long run. 

Didn't intend to hijack this thread as it's about Realtors, not lending, but since it's a parallel industry with similar issues facing it I'll add my .02c on the subject.

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