There is a chance that disruption could be upon us.
Reader Booty Juice said today said that since he bought his house 30 years ago, the transaction process hasn’t changed a bit. It hasn’t – sellers still pay a full commission for two agents to figure out how to get to the finish line.
Is it possible that Zillow could make the MLS obsolete, and cause a sea change in how real estate is sold?
Let’s test it every chance we get.
I inputted a ‘Coming Soon’ listing this morning, and it has had 162 views in the first 12 hours – most of which were probably buyers, not agents.
The new Paragon MLS allegedly has a listing counter too. I’m inputting the new listing now, and will try to track how many views happen through the MLS. My guess is that Zillow views will exceed the MLS.
Here’s how it looks on video:
http://www.zillow.com/homedetails/357-Willowspring-Dr-N-Encinitas-CA-92024/16715502_zpid/
Open Tuesday 4-6pm, and Wednesday 10-12:30 and 4-6pm!
Nice property at a decent price. But no drone video clips?
I have to pick my spots carefully to demonstrate my hobby.
Folding doors from the kitchen to the back patio is a must upgrade.
It’s really amazing how long the industry has been able to stifle the free market by controlling the free flow of information. The MLS system gave the appearance of a free market, which helped mask the true nature of it – control of information for the benefit of its members. Now that information can be disseminated and obtained by all in real time, realtors will need to figure out how to add value beyond being able to search a proprietary database and know the lockbox code. The herd will thin to only those truly dedicated to the profession, which is a good thing for all.
It’s never been so easy to investigate realtors and their performance, yet people just want to grab one and go.
If there was some upfront pay structure, or pay-as-you-go, then consumers would look harder at their choices. When it feels like it is free, it’s too easy to pick a realtor willy-nilly.
I’ll bite. For the million + listings, full-service listing realtor comes in with his or her team including a day or two of handyman fixit work, staging consult and de-clutter, light landscape freshen-up, professional photos and marketing materials. All coordinated and done. List and hold brokers open and two or more public opens. 60 day listing. Flat up-front fee $5,000. If it sells, commission of 1%. Selling agent commission, don’t know.
Let’s use $1.4 million for the comparison, and though some still believe that 6% is the standard, let’s plug in 5% (2.5% to each agt) to keep it closer.
$14,000 + $5,000 = $19,000, or
$35,000 (2.5%).
Most of the high-end agents would scoff at the difference, and go on a diatribe why they are worth the extra $16,000. You’ll note how hollow it sounds though when you hear that it is the expensive advertising and corporate presence that you are buying.
The agents believe they are worth the extra $16,000, and because the sellers aren’t that experienced and just want to grab a realtor and go, they roll over. Many have paid less than half of what they are asking, so the extra $16,000 isn’t that much in the scheme of things.
Instead, they turn their focus (and ego) back to price, which is all that matters to them in the moment. Comparing realtors, analyzing their marketing plans, verifying their testimonials – no sellers do that. They just want their price, and will sign with the first agent who promises they can deliver it.
The smart agents would consider your proposal because the $5,000 up front is attractive when you are carrying several listings for 6-18 months with sellers demanding more money spent on ads.
But the high-end agents don’t live in the same world as you and me – they take listings at any price and implement their 3P marketing plan (Put a sign in the yard, Put it in the MLS, and Pray). They figure that someone will come along someday and pay whatever it takes to enjoy the yellow shag and avocado appliances that are 40 years old – and pay 10x what the sellers paid. If it never sells, oh well.
Your comments on this one post, Jim, is the reason you are one of only a very stellar group of realtors who tell the truth and truly have their clients’ best interests at heart.
JtR even helped me with advice even though I didn’t have the joy of working with him since he only held a CA RE license, and I was moving out-of-state.
I’ve used agents for times in my life. My rate of satisfaction for the agents is only 50%. Our first agent sold the house we built in Hawaii (and came to every showing by other agents). We got her name from another agent (who had encouraged us to build instead of buy) who was moving from Hawaii to San Diego. He was very impressed with her in numerous transactions where she was across the negotiating table from him.
One agent was very enthusiastic, but looking back she implemented the ol’ 3P marketing plan. I wasn’t into open houses, but I finally agreed as our home wasn’t selling. Ironically, she did an open house (in the middle of a January blizzard) and was swamped with people. It worked as we immediately got an offer from one couple who was moving from another city, and happened to come to the open house.
The other one was my last one when I moved from CA to out-of-state. She not only answered her phone (no assistants or team) immediately, but her integrity, tenacity and other characteristics were stellar. I really felt like I was her only client–even though she had numerous others ones at the same time. She’s been the #1 top producer at a well-known real estate company four years running. It’s even more impressive because she rarely sells upper-end homes here.
After a bad experience with a male RE agent (who I fired), it was Jim who told me to find a female one. I still remember his words: “You’re moving out-of-state. To most guys, it’s just ‘sticks and stucco’. You want someone you can really talk to from long-distance.”
More people should do research on agents. If they did, there wouldn’t be so many people who are unhappy with their real estate experiences…
Thank you Susie!