SQFT, Buying / Selling Homes on Your Phone without Agents
This press release by SQFT was brought to my attention:
SQFT, the world’s first fully transactional real estate app, is pleased to announce that its first electronic real estate listing is under contract at a price of $550,000. The seller, Helen Marshall of Boulder, Colorado listed her home on the SQFT app using her iPhone and quickly received an offer on her iPhone from the buyers, Melanie and Garrett Simon, also of Boulder, Colorado. The parties negotiated their price and terms exclusively through the app until they reached a deal. Within minutes of agreeing to terms, the Seller and Buyer signed a contract on their iPhones using nothing more than their finger as a stylus.
Another company trying to take agents out of the equation, in an effort to disrupt. Allre is another recent attempt.
I’m curious if anyone actually thinks buyers are going to find a home, click a few buttons, and spend hundreds of thousands of dollars to purchase a home…directly from their phone?
Maybe I’m wrong, but I call BS.
Using a mobile app to close the transaction? Great. I get the benefit to having a negotiation and transaction management via a simple app. But how the hell do you find a buyer? That is where the real value is created. If I were in their shoes, I’d sell the technology to agents, brokers and franchises and ditch all the positioning about bypassing agents; I’ve heard the industry doesn’t like it when that happens.
SQFT either needs to put a hard foot in the ground and be the consumer centric play to do the transaction on their own, or work with the industry. They can’t have it both ways (which they are trying to do now).
Really
Posted at 13:12h, 25 OctoberLet the free market win!
Drew Meyers
Posted at 13:40h, 26 OctoberI agree. I’m just saying, they will most likely fail if they try to toe the line and be both consumer friendly (save $ by NOT using an agent) and partner with brokerages. Much higher chance at success if they pick one or the other.
Bryn Kaufman
Posted at 14:01h, 26 OctoberThe free market is alive and well.
No one is forced to use a Realtor.
They only do so if they feel it is their best option.
Bryn Kaufman
Posted at 09:58h, 26 OctoberThe big challenge here is can they sell homes without buyer’s agents?
The signing on the phone is not new, we do that now via DocuSign.
We also offer a discounted rate depending on the list price of the home, and we do give a larger discount if no buyer’s agent is involved, so essentially we do everything they do now, but we do offer to pay a 2.5% commission to the buyer’s agent.
As 99% of the homes sold in my market have buyer’s agents, saying you are not going to give them a dime eliminates are lot of buyers, and you will probably end up selling your home for less.
Mike Wilson
Posted at 12:09h, 26 OctoberHow do buyers find homes? On Zillow and Trulia. How is a broker adding value when the buyer says “show me this home I found on Zillow”?
Drew Meyers
Posted at 12:12h, 26 OctoberLetting them into the house, answering questions about the transaction, negotiating on their behalf, making them feel comfortable with spending several hundred thousand dollars on a specific house, etc
Bryn Kaufman
Posted at 13:56h, 26 OctoberThey do all that at no cost to the buyer too, which is why buyer’s agents are very popular still.
I checked all residential sales this year in my MLS and 6.23% of the sales have the same ID for listing agent and buyer’s agent. I also checked 10 years ago and 12.64% had matching IDs.
So it seems buyers agents are actually getting more popular vs. less popular, even though most buyers find the homes they want to see on the Internet.
Brian Kurtz
Posted at 14:33h, 01 NovemberThis could be due to the fact that Zillow and Trulia have become more popular too. 10 years ago people called on signs and via ads in the real estate circulars. Those calls were fielded by the listing agents and turned into double-ended transactions. Now they go to whoever is on the right side of the screen.
Bottom line, whoever opens the door first wins. Buyer’s see no value in buyer’s agents.
Bryn Kaufman
Posted at 14:44h, 01 NovemberLOL, I don’t think they see no value in a buyer’s agent.
If that was the case, they would not use one.
I do agree the value they see is minimal, but it is still enough to get them to use one.
They can’t really tell the difference between buyer’s agents, so if someone shows up on the page, and they have some good reviews, they contact them.
Brian Kurtz
Posted at 15:04h, 01 NovemberA mentor of mine said that all buyers want is a NICE person to open the door. I fought her tooth and nail on this for years. Now I believe she’s right.
As yourself this…if we passed regulation that required buyer’s to pay their own buyer’s agent…how many buyers would still use one?
Drew Meyers
Posted at 15:08h, 01 NovemberWell really, the buyer pays both the buyers agent and the sellers agent. Without them, NO ONE gets paid.
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Brian Kurtz
Posted at 15:21h, 01 NovemberI hear what you’re saying there Drew. It’s an alternative view of the situation, but I think that we all know that’s not really how it works. It won’t work in most other types of sales scenarios.
We could say that a the buyer pays the car salesman or the furniture salesman because he’s fronting the money to buy the product. Really, though, it’s the car dealer or furniture dealer who sees the value in the salesman’s work and is compensating him for it. Think about it, if one of these places decided to “try something new” and were to require the buyer to both pay the price of the car or sofa and then pay the salesman’s commission on top of it…how would that work out? I think it would work out with the buyer going to a store that did NOT require the additional fee.
It’s the same thing in our industry. The seller wants the job done and the seller is willing to make sure that both the listing agent and the buyer’s agent get paid as long as that job gets done. The seller is hiring the “muscle” – the buyer is not.
The buyer isn’t hiring anyone. She gets her services for free. Or at least on loan…until it comes time for her to sell the home again herself.
Drew Meyers
Posted at 15:26h, 01 NovemberI hear you. The “muscle” is factored into the selling price by the sellers though. If buyers agents ceased to exist, my guess is home prices would fall accordingly rather than sellers just pocketing more money.
But I get both sides to this argument.
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Brian Kurtz
Posted at 15:43h, 01 NovemberSo we’re in agreement that if buyer’s were required to pay their own agent that they would simply go through the listing agent to write their offer instead of coming out of pocket to pay their own agent on top of all the cash they need for the down payment and closing costs.
I think you make a valid point that removing buyer’s agents from the picture would mean that there would not be an army of agents out there trying to match over-committed buyers who are distracted by the issues of life to houses to motivate them and keep them in the game until they get to the closing table.
You also could make the argument that is always made against FSBOs…that once buyer’s know that the seller is saving half the commission, they would just ask for discounts. This would also put downward pressure on prices.
I don’t think this would play out that way though for one reason. The seller has representation. They have a negotiator in their corner to keep prices high. Any drop in price due to the exit of buyer’s agents would be nominal at best and would become a non-issue in short order after the market adjusted to the “new normal”. The seller, on the other hand, would see a tangible difference to their bottom line.
One thing is for sure. If commissions were essentially cut in half from where they are now by pushing the buyer’s agent out of the picture…the FSBO element would practically disappear overnight…as would a significant portion of the Realtor community.
mark wilson
Posted at 08:19h, 01 AugustFree services? Hardly. The buyer is paying an inflated price to buy the home to cover the 6% commissions.
SloveniaInvest
Posted at 22:30h, 31 OctoberEvery thing is getting techy today. So there is a need for every business to go online and compete with their competitors.