The topic of disintermediation coming to the real estate industry has been bandied about for years, with no one obvious solution. This author brings it up again, whining about the usual complaints:
http://techcrunch.com/2013/08/04/who-will-disrupt-real-estate/
What has slowed the revolution is that the big players have insisted on playing nice with the old guard – traditional realtors. But in the comment section of the article above, Glenn left his normal glossy opinions of himself, but wound up with this:
If nothing else, Redfin is a mission-driven company. We will strive and seek and find. We will not yield.
That is stronger public language than usual for Glenn, and he also threw this punch at Zillow:
The reason I love working at Redfin is that we are trying to taking on the whole enchilada: not just showing pretty pictures of houses on the web, or generating leads for agents who haven’t changed much how they serve customers at all.
Hopefully this means that the fight is on. Who’s in the fight? This is how it could go down:
1. Redfin continues to develop more whiz-bang gimmicks, even though in the last panel discussion Glenn himself said that buyers only want to know bedroom/bath counts, and square footage when looking at homes on-line. But because they are a brokerage, at some point the old guard will have to take notice.
2. Realtor.com is so far behind that they need to make a drastic move, like buy Trulia or visa versa to try to take the lead. Being the chosen one of the NAR isn’t enough – because NAR might not last.
3. Zillow will continue to team up with the old guard as a support system, not a competitor.
4. Corporate titans could square off too; Berkshire vs. Realogy.
The ultimate fight will come down to Zillow/Old Guard vs Redfin/New Age.
For now we will all happily co-exist, but you can’t help but think that the friction between is starting to build. With the realtor population loaded with old folks, the Old Guard will be faced with severe attrition in the coming years. The real estate selling business will be in a prime position for change.
But Redfin’s model doesn’t match up with what buyers and sellers have needed most – expert advice. How the fight turns out will be based on whether the consumer values actual real estate expertise, or if they think they can do without. For many, they choose a realtor quickly and never experience it anyway, so the difference may not be obvious.
Realtor.com is behind the times BUT AT LEAST they show the listing realtor name and number!!!!!!!!!!!
When it comes to the listing agent getting proper exposure for their listing, it’s a hot mess.
Realtor.com shows the listing agent, but we have to pay extra to get listing enhancements like being able to customize the remarks….on our own listings. And they’re supposed to be on our side!
Zillow will display the listing agent alone is you pay their friendly extortion rate of at least $500 per month to be a Premier Agent.
Redfin highlights their agents, and they phony sales records – they never mention that each featured agent has 5-10 licensed agents and others doing the processing. Sure, most “teams” do the same thing, but the red team is the one promoting transparency – at least when it’s convenient for them.
“How the fight turns out will be based on whether the consumer values actual real estate expertise, or if they think they can do without. For many, they choose a realtor quickly and never experience it anyway, so the difference may not be obvious.”
This is a prescient observation Jim. I would think the majority of people do relatively few real estate transactions in their lifetime. What’s the average? Three? Four tops maybe? So, your “first house” and your next move up might be luck of the draw until you get wiser. How many people choose agents because “Aunt Hattie just got her license and she can sell our house?”
Also, as people do more and more business online, will they think that real estate online is analogous to ordering from Amazon?
I agree with your observation that a sea change is coming. It has happened in many other markets that are information driven as a result of the web. The differentiator here is that you’re dropping major coin and there’s lots of ways to get screwed if you don’t have the proverbial “boots on the ground” who knows the ropes.
Getting hosed by a couple of grand by a car salesman (apologies to car sales professional readers!) could by eclipsed by 10x or 20x in real estate, and be a gift that keeps on giving (property line disputes, drainage issues, etc.) that make that dream house not so dreamy.
Best have someone in your corner who knows the area and the issues who keeps your interests in mind.
(Full disclosure: JtR is the guy in my corner)
Thank you CB Mark!
You know what it is like being me.
I regularly hear from people who tell me how much they appreciate what I do here, but they used a different realtor. But when I look around at what other agents offer on-line, and for the most part it is garbage.
Consumers have a romantic idea of what their realtor is supposed to be, and they select them without much, if any, investigation – but because I’ve been transparent about my services, they have preconceived something about me that gets me deleted.
I appreciate the people who do use my services more than ever!
UT has their own MLS listings that look pretty good: http://sdut.adicio.com/homes/search/results/all
Local listings better?