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You speak of RE as if there is something markedly special and unique about it. Craigslist, Zillow, and such are just the beginning. The game is over.
Well, there IS something markedly different and unique about real estate, of course. And that's why sites like Craigslist & Zillow, although useful to some people in some circumstances, are not going to replace a real estate agent.
What's special & unique? Every property is different from every other property. Every seller & every buyer has different needs & different motivations. It's not like marketing a factory made product, where you can capture the imagination of the world & zip off 2 million widgets, all identical, out on the shelf in time for the holiday sales rush. Joe's house is different from Mary's house, and Tom has different needs than Diane. A good real estate agent has knowldege of the local market that comes from being involved in multiple sales every year, from knowing the otehr professionals, from seeing the inventory, from being educated on the laws & regulations concerning real estate, and that knowledge can, and should, be used to help clients make good informed decisions. The real estate market & industry may indeed be changing because of technology, (and I've seen that in just the 6 years that I've been in the industry) but the knowledge & skill of a good real estate agent is something that can simply not be gotten from a list of homes on a website.
Realtors work on commission and most are independent contractors and just like any other buisness owners or independent contractors,they usually have to put alot of time and money in to there buisness and some times its great financially and sometimes its a huge struggle.I have had alot of days that I wanted to quit and get a steady income,but I knew I would be stuck in steady .2007 will be my best year..with almost 7 million in sales...My commission for this year will be pretty good and Im blessed..But what I dont understand is why do you care what some one else is making.Dont judge!!I would like to see all Realtors make some money because they deseve it.My husband changes tires,do you want to know how much he makes? GAS IS HIGH,milks high,and breads not getting any cheaper,I hope that everyone makes as much as they can and shares a successful spirit.
Our local discounter went belly up because they failed to provide service to their customers at a price that was sustainable. They were members of the local MLS, they put properties in the MLS and we cooperated with them just as we would any other office.
The real estate brokerage business is a service business. Selling cars is a commodity business. Travel agents that book vacations with more than rudimentary itineraries are still in business because they provide a service that the average consumer can't easily provide for themselves. Where are the discount lawyers? Surely the law could be easily adapted to automation.
As soon as my computer can provide me a needs based service tailored completely to me, then the game might change, it most definitely wont be over.
We need to define several items that are nebulous at best.
1.)Service business....could range from a carpet cleaner to a plastic surgeon.
Bad terminology, far too comprehensive.
2.)Discount real estate....another meaningless terminology, as much to disparage web-based and mediated RE than anything else. Typically used by RE agents themselves, when they should be referring to web-mediated and based RE.
Okay, that being said, lets ask ourselves if RE in its current form is sufficient for today's market. I would start by asking if the low bar of entry directly contributes not only to the glut of agents in the business, but the low quality of the same. When you describe RE as a service industry, you imply that there is an aspect of it that can only be addressed by the physical presence of a person is some way. Is there a possibility that RE is TOO agent focused? Does the world really need thousands of buyers agents just begging to have buyers follow them around to houses they can just as easily find and see themselves, with the help of the sellers? I would heartily suggest it does not. There is no larger waste of time, money, and effort than "buyer's agents" carting people around like it was 1977 out there. What can an agent seriously add to the experience of walking around a home? Buyers absolutely LOATH the presence of an agent tailing them around each room, throwing out mental "tie-downs" after each good showing, and pushing them to sign a contract. All experienced agents loath working with buyers themselves, and soon become listers with experience. Few agents have become wealthy carting buyers around, if only because of the time element involved. That entire side of the business should and will be removed. Now, to listing agents. ....Fee-for-service will be the primary mode of biz for RE in 2-3 years, after the current fallout, if not sooner. Folks simply cannot afford to pay the full 6-7% commission of the past anymore, and do not want to pay for a lump-sum of "services". The "thanks, by-owner" commercials, obnoxious as they are, are a true harbinger of the fee-based services just on the cusp. Sellers simply do not ALL need an entire pallate of services, and, if presented with several choices, some of which when added up would be less than the typical one-size-fits-all commission, would more likely choose the mix that would save them more than the lump-sum one. If they feel they can perform some or all of the services, they will opt to do so if they can save money per the commission, be it setting appointments up themselves, writing up/negotiating the contract themselves, advertising themselves, what have you. So, in sum, if buyers are presented with a valid opportunity to DIY and save money on some or all of the services typically given by a lump-sum, one-size commission, they will choose to do so. This is where you will see the change in the industry. I'm not saying human beings will not be involved in the process at all, and only a fool or a real estate agent would construe it as such to meddle the issue. The fact is that fee-for-service is the route that change in the RE industry will take. The US Department of Justice is currently making waves in RE with a huge push in conjunction with the FTC to knock down all walls in the way of the fee-for-service paradigm, re the link below:
I would highly suggest that all real estate agents read the actual report, about 150 pages, in its entirety to see what direction your government will mandate the RE industry heads the next 2-3 years, far faster than you may think. All cartels(note Cendant is defunct) and NAR lobbying are a dead horse at this point. I base and substantiate all my statements on this post with that aforementioned report, and suggest that those that comment here read it in its entirety here before you comment.
Last edited by soothsayer1234; 11-29-2007 at 04:22 PM..
We need to define several items that are nebulous at best.
1.)Service business....could range from a carpet cleaner to a plastic surgeon.
Bad terminology, far too comprehensive.
2.)Discount real estate....another meaningless terminology, as much to disparage web-based and mediated RE than anything else. Typically used by RE agents themselves, when they should be referring to web-mediated and based RE.
Okay, that being said, lets ask ourselves if RE in its current form is sufficient for today's market. I would start by asking if the low bar of entry directly contributes not only to the glut of agents in the business, but the low quality of the same. When you describe RE as a service industry, you imply that there is an aspect of it that can only be addressed by the physical presence of a person is some way. Is there a possibility that RE is TOO agent focused? Does the world really need thousands of buyers agents just begging to have buyers follow them around to houses they can just as easily find and see themselves, with the help of the sellers? I would heartily suggest it does not. There is no larger waste of time, money, and effort than "buyer's agents" carting people around like it was 1977 out there. What can an agent seriously add to the experience of walking around a home? Buyers absolutely LOATH the presence of an agent tailing them around each room, throwing out mental "tie-downs" after each good showing, and pushing them to sign a contract. All experienced agents loath working with buyers themselves, and soon become listers with experience. Few agents have become wealthy carting buyers around, if only because of the time element involved. That entire side of the business should and will be removed. Now, to listing agents. ....Fee-for-service will be the primary mode of biz for RE in 2-3 years, after the current fallout, if not sooner. Folks simply cannot afford to pay the full 6-7% commission of the past anymore, and do not want to pay for a lump-sum of "services". The "thanks, by-owner" commercials, obnoxious as they are, are a true harbinger of the fee-based services just on the cusp. Sellers simply do not ALL need an entire pallate of services, and, if presented with several choices, some of which when added up would be less than the typical one-size-fits-all commission, would more likely choose the mix that would save them more than the lump-sum one. If they feel they can perform some or all of the services, they will opt to do so if they can save money per the commission, be it setting appointments up themselves, writing up/negotiating the contract themselves, advertising themselves, what have you. So, in sum, if buyers are presented with a valid opportunity to DIY and save money on some or all of the services typically given by a lump-sum, one-size commission, they will choose to do so. This is where you will see the change in the industry. I'm not saying human beings will not be involved in the process at all, and only a fool or a real estate agent would construe it as such to meddle the issue. The fact is that fee-for-service is the route that change in the RE industry will take. The US Department of Justice is currently making waves in RE with a huge push in conjunction with the FTC to knock down all walls in the way of the fee-for-service paradigm, re the link below:
I would highly suggest that all real estate agents read the actual report, about 150 pages, in its entirety to see what direction your government will mandate the RE industry heads the next 2-3 years, far faster than you may think. All cartels(note Cendant is defunct) and NAR lobbying are a dead horse at this point. I base and substantiate all my statements on this post with that aforementioned report, and suggest that those that comment here read it in its entirety here before you comment.
"...to see what direction your government will mandate the RE industry heads the next 2-3 years..."
"Nationalized/Socialized Real Estate?"
What a fine goal.
You are right.
That is a little scary for the American people, for the government to run almost any industry in what used to be a fairly free country.
That it is Real Estate is tangential to the overall evil of the intent to "mandate."
You might have motivated me to read the whole report.
When I was selling houses back in the early '90s, it was done very differently from how it is done today. The job of a real estate agent changes quite frequently. Back in the '90s, we had a huge BOOK with listings...no computer! Did we ever think that most of our buyers would find houses online? Of course not. Do they still need us? You betcha!
By the way...if any of you sell cars, I really would love to know what a car salesman makes when they sell a brand new car.
The reason I ask is that each and every time we've ever bought a car, the salesman is always whining about how they make so little money. I'm curious. Anyone care to share?
Vicki
Sorry to go off topic, but I couldn't help answering Vicki's question.
My DH sells new and pre-owned Nissans. On average, the sales people take home $100-$200 per new vehicle sold. It's a high volume business and not for the faint of heart. It's not what it used to be... And if the customer returns the vehicle, the commission has to be returned. They make a little more on pre-owned vehicles.
Wish I knew what the manufacturer was getting.....
I would highly suggest that all real estate agents read the actual report, about 150 pages, in its entirety to see what direction your government will mandate the RE industry heads the next 2-3 years, far faster than you may think. All cartels(note Cendant is defunct) and NAR lobbying are a dead horse at this point. I base and substantiate all my statements on this post with that aforementioned report, and suggest that those that comment here read it in its entirety here before you comment.
You obviously never have.
It threaten no action. It's major finding is that established brokerage may be mean to new ones. Never has so little been found in so many words. When they find something in some small segment of the market to which they object the offending party promptly folds.
Our respondent continues to display a simply amazing ability to misunderstand the RE business and what the DofJ says about it.
And on top of all that the poster continues to refuse to adopt any of the normal structures that are used for written discourse in our society.
I hope no one is spending a whole lot of time on this stuff. It is all garbage.
Sorry to go off topic, but I couldn't help answering Vicki's question.
My DH sells new and pre-owned Nissans. On average, the sales people take home $100-$200 per new vehicle sold. It's a high volume business and not for the faint of heart. It's not what it used to be... And if the customer returns the vehicle, the commission has to be returned. They make a little more on pre-owned vehicles.
Wish I knew what the manufacturer was getting.....
Hey TampaKaren, thanks for the answer. I would have thought more, considering what new cars cost nowadays.
I sure feel for the salespeople that have quotas and really have to work hard to get a car sold. I figure it must take a few hours to get the buyers to test drive the car and a few hours for the paperwork. So $100 to $200 doesn't seem like a lot.
The reason I ask is that I recently bought a new car and hubby make us go back 3 times before we bought the car. I sure hate that the poor salesperson only got $100 to $200!
Your problem of course is that you simply don't understand. Neither Zillow nor Craig's list is in anyway a competitor of the conventional RE operation.
There have been scattered incidences of ganging up on the new kid. But mostly the "new" models are ignored and die. They simply generate insufficient revenue in a down market to survive.
In actual fact the conventional industries market share and average commission is increasing at the moment. Nothing special about that...generally happens in a slow, weak market. Note that internet buyers have far higher usage of RE Agents than there non-web equivalents.
DofJ is primarily upset about minimal service regulations. In general the RE industry has already given on the point. It is however still an interesting discussion. I think it clear that some of the discount models are based on effectively forcing the other side of the transaction into doing most of the work. It may well be that the regulatory agency will have to let up on rules that require one to treat the other side fairly to compensate. DofJ may think this a victory but I don't.
I understand only too well, olecept. We are in new RE territory here. The mortgage market has never melted on a national basis, including the savings and loan scandal of the late 80's, which allowed regulators to open the doors for all the other banking entities and such to enter the lending industry, entities which are bleeding dry as we speak. At that time, on a much smaller scale, the feds stepped in to bail out the savings and loans, who were the only originators of mortgages at the time. The current lending meltdown is incomparably larger and dire, wedded to concurrent meltdowns of quasi-gov't entities such as Freddie Mac and Fannie Mae, along with the dollars' struggles itself. Also, in the 80's, we didn't rely on Asia to prop up our lending market, and de facto the entire housing market. Zillow, Craiglist, and such are the least of the RE industries' worries. Unless they plan on originating loans themselves, they will shortly be dealing with a lending chain that is broken at all ends, with just a call on gov't notes by Asia at anytime to bring it to a standstill. Foreclosures are at all time highs, in some regions, such as Las Vegas and Southern California, threatening to bring down the local economy. Brother, we are headed for some rough times ahead, and Zillow, Craigslist, and such will simply mop up a market that will die of its own hubris and accord. At a certain point, sellers will not be able to PAY a conventional RE commission. As the market clears of speculators, flippers, and such, along with the sheer greed that caused folks to buy far above their means, an insolvent overhang of debt will render the standard RE comission defunct, along with the sheer dross and redundancy encumbent upon the old RE conventional paradigm. At that point, the web-mediated paradigm that is first out of the gate after a few more walls have been knocked down by the FTC per MLS and RE cartels will mop up the mess that is left. Zillow and such are simply harbingers of the new paradigm. It will resemble them, but I don't think it has appeared as such quite yet. I don't necessarily think it will be simply one large site or entity either. It will be composed of elements from all existing "compilers". It will have the local tweeking of Craig's list, the immediacy and comparison shopping of zillow, the comprehensiveness of Google, photo capacity of Flickr, and DIY of current blogging enablers. Look for the new paradigm to take over and mop up as soon as the huge mess created by the old paradigm spends itself out.
I understand only too well, olecept. We are in new RE territory here. The mortgage market has never melted on a national basis, including the savings and loan scandal of the late 80's, which allowed regulators to open the doors for all the other banking entities and such to enter the lending industry, entities which are bleeding dry as we speak. At that time, on a much smaller scale, the feds stepped in to bail out the savings and loans, who were the only originators of mortgages at the time. The current lending meltdown is incomparably larger and dire, wedded to concurrent meltdowns of quasi-gov't entities such as Freddie Mac and Fannie Mae, along with the dollars' struggles itself. Also, in the 80's, we didn't rely on Asia to prop up our lending market, and de facto the entire housing market. Zillow, Craiglist, and such are the least of the RE industries' worries. Unless they plan on originating loans themselves, they will shortly be dealing with a lending chain that is broken at all ends, with just a call on gov't notes by Asia at anytime to bring it to a standstill. Foreclosures are at all time highs, in some regions, such as Las Vegas and Southern California, threatening to bring down the local economy. Brother, we are headed for some rough times ahead, and Zillow, Craigslist, and such will simply mop up a market that will die of its own hubris and accord. At a certain point, sellers will not be able to PAY a conventional RE commission. As the market clears of speculators, flippers, and such, along with the sheer greed that caused folks to buy far above their means, an insolvent overhang of debt will render the standard RE comission defunct, along with the sheer dross and redundancy encumbent upon the old RE conventional paradigm. At that point, the web-mediated paradigm that is first out of the gate after a few more walls have been knocked down by the FTC per MLS and RE cartels will mop up the mess that is left. Zillow and such are simply harbingers of the new paradigm. It will resemble them, but I don't think it has appeared as such quite yet. I don't necessarily think it will be simply one large site or entity either. It will be composed of elements from all existing "compilers". It will have the local tweeking of Craig's list, the immediacy and comparison shopping of zillow, the comprehensiveness of Google, photo capacity of Flickr, and DIY of current blogging enablers. Look for the new paradigm to take over and mop up as soon as the huge mess created by the old paradigm spends itself out.
What an incredibly daft presentation. Not only don't you understand the subject matter you are apparently incapable of organizing your thoughts in a coherent manner.
I give up ...
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You won't believe it.
