How to Disrupt the Real Estate Industry
I read some posts recently on Entrepreneur.com and GeekEstate about disrupting the Real Estate Industry.
Disrupting the industry is a polite way to say, we are getting rid of Real Estate agents.
In my opinion, there is only one way to disrupt the Real Estate industry. That would be to prove to sellers that you will get more money to your bottom line selling without an agent.
The complexity of the transaction and the liability can all easily be handled, but proving to a seller they will get more money by not using an agent is hard to do.
I don’t think anyone can do this, and that is why Realtors are still around. There are so many factors that go into pricing a home, and it is really hard to prove that a seller can have a larger bottom line by not using an agent.
There will continue to be new and exciting technology used in the Real Estate industry, but a Realtor will remain a key part of most transactions.
Lynetta Cornelius
Posted at 15:13h, 15 OctoberHow might “Getting rid of Real Estate Agents” be possible. Disrupt the Industry? This would likely bring the industry to its knees. Hmmm, this is indeed an issue to ponder…Great post.
Bryn Kaufman
Posted at 00:21h, 17 OctoberThanks Lynetta
Malcolm Lewis
Posted at 06:58h, 16 OctoberBryn,
I’m not sure “disrupting” automatically equates to “getting rid of agents”
My definition of disruption is a dramatically new way to do something that is core to the industry. The web, for example, has dramatically changed the way home buyers find homes for sale – but they still need an agent to negotiate and close the transaction. By the same token, Uber is disrupting the way in which consumers find a cab or limo, but they will never eliminate the need for someone to drive the car.
IMHO, for the real estate industry, candidates for disruption include: 1) Helping buyers find homes for sale; 2) Helping sellers find agents; 3) Helping agents find clients; 4) Helping agents market properties; 5) Helping agents manage themselves and their clients through the transaction process from offer to close of escrow.
Drew Meyers
Posted at 08:24h, 16 October“they will never eliminate the need for someone to drive the car.”
At least not before self driving cars are normal
Malcolm Lewis
Posted at 10:06h, 16 OctoberTrue. But I bet we see self-driving cars before we see self-closing real estate tractions.
Bryn Kaufman
Posted at 00:29h, 17 OctoberUber could dramatically reduce the number of taxi drivers.
I believe there are a lot of small entrepreneurs trying to come up with an “Uber” like company that would reduce the number of Realtors.
I think what you are saying above is more like the evolution of how we buy and sell homes, rather than a disruption.
hkpropertyhunter
Posted at 19:17h, 17 OctoberAgree. Real Estate Industry will always need Real Estate Agents because Real Estate Agents are they key for almost all transactions and communications. You can or you should never get rid of them. Nice read!
Bryn Kaufman
Posted at 19:22h, 17 OctoberThanks!
SloveniaInvest
Posted at 21:33h, 17 OctoberReal Estate industry in incomplete without real estate agents. Yes, this is true that real estate agents makes good money but that is at the cost of providing the buyer his dream home. I think they worth it !
Bryn Kaufman
Posted at 11:07h, 18 OctoberI agree!
#Str8ReaLestate
Posted at 22:09h, 22 OctoberBy 2020 80% of sales WiLL NOT include a commissioned real estate agent/broker.
Brian Kurtz
Posted at 14:37h, 01 NovemberYou must be a millennial. They say stuff like that.
Gabe Sanders
Posted at 08:35h, 25 OctoberIn areas like mine in Florida, where many if not most buyers are not familiar with the area, I find it hard to imagine being replaced by automated systems. Though, if one develops a system with good enough local information, it’s certainly a possibility.
I don’t think it will result in any savings for the consumer though. Might actually end up costing more.
Brian Kurtz
Posted at 14:52h, 01 NovemberSellers do NOT want to sell their own home. The whole thing is a crazy ton of work. Agents make it look easy, but Olympic figure skaters make what they do look easy too. Step out on the ice and try to do a triple lutz and see if you don’t break a wrist.
How much money a seller realizes is NOT the determining factor in whether agents remain relevent or not. Whether or not the home sells AT ALL, at ANY price is the driving force.
Think about it. A retired couple doesn’t want to move, rather they NEED to move…for whatever reason. They want to save the coin so they try to FSBO. House doesn’t sell. They still need to move and now the need is greater and the issue has been promoted to the level of PROBLEM. Now the problem needs to be solved and they want someone on their team to do it. So they hire a real estate agent and the house sells. Problem solved.
What is wrong in the real estate tech space is that everyone trying to get an edge in on things is trying to convince everyone that if you use their “magic widget” that the above scenario will not happen to them. You put the home up on their special site/app/widget/whatever and the real estate fairy comes to visit and blesses you with a buyer. House sells.
Each new Johnny-come-lately company only has to have ONE house sell using their platform and they can sing this same song. Nobody seems to realize that it’s just a different verse.
When you have an army of salespeople who jump out of bed every morning and run down stairs to see what new homes are available to match to their buyers so they can get a paycheck in the near future…THAT is the kind of motivation that keeps the marekt moving when the average buyer is overly busy and preoccupied.
Money motivation causes agents to pick up the phone and call buyers while they are at work and tell them to skip grandma’s 80th birthday party and look at this house before someone else writes on it. Sellers put up money to get the job done and, wonder of wonders, the job gets DONE! Then you have FSBOs who try to get the same results and wonder why nothing happens.
I mean..common. You hire one listing agent and in any area you all of a sudden have 1,000 people trying to figure out if they can get a buyer into your house faster than any other agent does. The only thing that stands between those 1,000 salespeople and your house with a SOLD sign on it is choosing to overprice the house in the first place.