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Old 05-07-2018, 04:21 PM
 
Location: All Over
4,004 posts, read 4,573,178 times
Reputation: 3092

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Quote:
Originally Posted by Electrician4you View Post
Imo itís gonna come down to the actual participants of the home sale. Thatís the buyer and the seller. When they get tired of paying the ďstandard 6% commission feeĒ the market will change. Until then itís gonna go as itís going. Agents will never go away completely. The market eventually will change. It already has quite a bit.

Eventually you will have sites where you will pay and amount for the service you want as far as what you want them to do for you.

Problem is most people suck at sales or interacting with others without being emotional. I have a here is my offer mentality. Feel free to make a offer. Itís either gonna happen or itís not .
Look at how Uber has disrupted the taxi industry. I agree with what you said but I think the only thing realtors have going for them that's kept disruption from happening thus far is that buying a home is the largest purchase anyone has ever made and it's put forth as being an intimidating thing. If people took the time to educate themselves on the process people wouldn't even think about giving 6% away, that said just because me as the seller realizes it, unless there's a mass change I still have no buyers who are going to contact me directly without an agent.
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Old 05-07-2018, 04:28 PM
 
Location: Cary, NC
33,618 posts, read 58,304,270 times
Reputation: 32352
Quote:
Originally Posted by doodlemagic View Post
Look at how Uber has disrupted the taxi industry. I agree with what you said but I think the only thing realtors have going for them that's kept disruption from happening thus far is that buying a home is the largest purchase anyone has ever made and it's put forth as being an intimidating thing. If people took the time to educate themselves on the process people wouldn't even think about giving 6% away, that said just because me as the seller realizes it, unless there's a mass change I still have no buyers who are going to contact me directly without an agent.
Uber Disruptor is laughable, when it comes to sustainability.
They only exist because they have enough suckers lined up to cover their massive cash burn rate.

"Disruption" for the sake of disruption, employing ruinous pricing while hoping to starve the competition so they can control market pricing, is hardly a laudable business model.

When I list at 4.4%, I cover my bills without breaking laws and without endless cash infusion from misled investors.
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Old 05-07-2018, 04:29 PM
 
Location: All Over
4,004 posts, read 4,573,178 times
Reputation: 3092
Quote:
Originally Posted by rrah View Post
100% agree. I'm fearful it's already headed in that direction. In my opinion the lower commission was really the irrelevant part of it. What was most interesting to me was the use of algorithms to target marketing and depending entirely on the internet instead of the MLS.

At least now I understand why my fully employed computer science kid was taking a course on algorithms "just for fun."
Let's just bring the convo there. I'm not trying to trash realtors, I think a good realtor is worth their weight in gold, that said there's way more crappy ones than good ones.

Here's my thing. I realize being a realtor is sales and you may work with someone for 6 months before they buy and I agree realtors need to be paid well to accomodate for that.

That said disruption typically happens either to free up time, and/or to lower costs. Regardless of how much time a realtor puts in andhow much they deserve the money 6% of a 100k or more sale is a pretty penny to both buyers and sellers.

With the internet and making property listings available, yes I realize they aren't as accurateor up to date as the MLS but regardless they are online. I pretty much found my own house, my realtor didn't need to send me properties. I would go do a driveby and vet them before I wasted his time and had him show them to me ie I didn't wanna waste his or my time driving up to a house and seeing something on the outside that made me not even wanna go in...so not that part of the job ie finding properties is something homeowners do themselves.

With online people can also use sites like citydata, youtube, message boards to talk to residents of a particular town, don't necessarily need a realtor to tell you this is a great school district.

So at this point were down to realtors do some legwork and paperwork for me. Well typically having paperwork reviewed or done, doesn't cost thousands of Dollars so what's to stop someoen from inventing a better way to market and sell real estate that uses technology to let buyers do most of their own research at which point they pay a real estate professional a couple hundred bucks to handle the paperwork end of things.

I get that ultimately that's what FSBO is, but its not really a well designed system the way its currently setup
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Old 05-07-2018, 08:57 PM
 
Location: Salem, OR
13,997 posts, read 32,889,390 times
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Quote:
Originally Posted by rrah View Post
Periodically someone here will mention some "new" kind of brokerage or scheme of doing business. Typically my response is that it's nothing new, etc.

As I was watching the news a few nights ago I watched a story about about a newer company. They use AI and Machine Learning to micro-target potential buyers online. They don't list in the MLS.

https://www.cnbc.com/2018/03/20/arti...te-agents.html

Maybe it's my current bias. I've been working with AI and ML experts for the past couple of months on a work project and have some understanding of how it can be used in business applications.

I also think if we've learned anything in the U.S. in the past 18 months it's that targeted advertising and content can certainly make people respond in a particular way.

That said, I do kind of dismiss one of their claims: shorter sales times. They are currently only in what I understand to be hot markets.

Another article on the same topic. https://www.inman.com/2016/12/14/ris...-estate-sales/

I would definitely seek out this type of company if I was selling my house and not just because of the lower commission.

Is AI and Machine Learning what will disrupt and change the way people buy and sell homes?
This is an interesting idea, but I just don't see how the algorithm isn't going to unintentionally target white people. There is a huge disparity between whites and minority home ownership and I can see an algorithm based on white people moving, focusing too much on that demographic because it targets people in specific areas. There is a concept called disparate impact where the intention isn't to be discriminatory, but it ends up being that way through unintentional actions.
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Old 05-08-2018, 05:26 AM
 
Location: Bloomington IN
6,535 posts, read 7,793,687 times
Reputation: 15955
Quote:
Originally Posted by Silverfall View Post
This is an interesting idea, but I just don't see how the algorithm isn't going to unintentionally target white people. There is a huge disparity between whites and minority home ownership and I can see an algorithm based on white people moving, focusing too much on that demographic because it targets people in specific areas. There is a concept called disparate impact where the intention isn't to be discriminatory, but it ends up being that way through unintentional actions.
That's a very good point. I suspect the algorithms used go beyond people currently living in a specific area. It would include people looking for a house in a specific area. Using my house as an example: I live on wooded acreage. If someone searched the internet for houses on wooded acreage in my town and found my house, that would become part of the algorithm.

I think sometimes in short articles like the ones linked, people use the easiest to understand examples versus what actually is used. I've seen a bit of it in action over the last couple of months in some other industries. Determiners are complex and not always what one would expect.
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Old 05-08-2018, 06:29 AM
 
Location: All Over
4,004 posts, read 4,573,178 times
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Quote:
Originally Posted by MikeJaquish View Post
Uber Disruptor is laughable, when it comes to sustainability.
They only exist because they have enough suckers lined up to cover their massive cash burn rate.

"Disruption" for the sake of disruption, employing ruinous pricing while hoping to starve the competition so they can control market pricing, is hardly a laudable business model.

When I list at 4.4%, I cover my bills without breaking laws and without endless cash infusion from misled investors.
To some extent your right, but there will always be a line of people waiting to drive for peanuts. Uber isn't a taxi company, they are a technology company and they sell you time.

Uber fills a role. Personally I don't think they make any money, I've seen the numbers broken down and your basically taking out a cash advance on your car. You need money for rent in two weeks, you can drive Uber and get that rent money. You'll make a very small profit and the rest of the money your essentially taking out of the future value of your car and will go into repairs, new tires and oil changes down the road, but you get the money you need when you need it. There's always going to be a need for that money so people will always drive.

I was just talking with a buddy of mine about how horrible it used to be taking taxis home from the bars. You call for a cab, it's a 50/50 shotif they even show up. They were incredibly expensive, you normally waited a half hour or more for them to come.

With Uber I turn on the app and I can see how far the closest car is away, I know exacty when they pull up, I don't have to fumble with money and leaving tips, its amazing for riders and while its not super lucrative for drivers it does fill a need.
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Old 05-08-2018, 06:53 AM
 
Location: Raleigh NC
9,350 posts, read 7,170,846 times
Reputation: 8103
Quote:
Originally Posted by Brandon Hoffman View Post
This was going to be an interesting topic. Hopefully it doesn't continue to devolve into commission discussions or "I don't need or want an agent because this happened to me a long time ago" comments. There are enough of those on other derailed threads.

JB, if the UK is so great feel free to move there.
I see he's got a slightly modified schtick. I take responsibility for enlightening him, though per usual, conclusions have been jumped to that fit the scenario as he wishes.
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Old 05-08-2018, 09:32 AM
 
698 posts, read 436,124 times
Reputation: 1092
Interesting article pertaining to the OP:

https://realestate.usnews.com/real-e...onal-brokerage

A portion that resonated with me:

"Across the board, companies breaking away from the traditional brokerage model expect new tech innovations to continue to be a significant part of the home buying and selling process.

However, as buyers demand more transparency and seek a greater level of control throughout the house hunting, negotiation and closing process, the traditional model may begin to feel more antiquated and less like the norm. Strand points out quick adoption of technology company wide largely “hinges on having this team of employees,” rather than having independent contractor agents.

Until then, the companies offering an alternative brokerage experience are continuing to grow. Redfin is undergoing vertical growth by beginning a mortgage platform, currently in its infancy in Texas. Local firms like Trelora and Triplemint are seeing success in their markets and have plans for future expansion. The greater variety of options can only be a positive as you look for the right company to represent you in your next real estate deal."
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Old 05-08-2018, 09:49 AM
 
Location: Columbia, SC
9,077 posts, read 18,070,923 times
Reputation: 6700
Quote:
Originally Posted by photogal9 View Post
...
However, as buyers demand more transparency and seek a greater level of control throughout the house hunting, negotiation and closing process, the traditional model may begin to feel more antiquated and less like the norm. Strand points out quick adoption of technology company wide largely “hinges on having this team of employees,” rather than having independent contractor agents....
I don't know how much more transparent RE can be. It's one of the most transparent businesses out there.

You bring up an interesting point I missed. Teams have changed the business with specialized roles. I think teams are a better alternative for new agents to break into real estate. A well run team can also be a good for the consumer (knowledge and availability) and the company (can help the BIC focus on management level activities instead of training). Of course just as there are good and bad individual agents, there are good and bad teams.
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Old 05-08-2018, 10:29 AM
 
4,399 posts, read 9,052,070 times
Reputation: 2352
Quote:
Originally Posted by rrah View Post
Periodically someone here will mention some "new" kind of brokerage or scheme of doing business. Typically my response is that it's nothing new, etc.

As I was watching the news a few nights ago I watched a story about about a newer company. They use AI and Machine Learning to micro-target potential buyers online. They don't list in the MLS.

https://www.cnbc.com/2018/03/20/arti...te-agents.html

Maybe it's my current bias. I've been working with AI and ML experts for the past couple of months on a work project and have some understanding of how it can be used in business applications.

I also think if we've learned anything in the U.S. in the past 18 months it's that targeted advertising and content can certainly make people respond in a particular way.

That said, I do kind of dismiss one of their claims: shorter sales times. They are currently only in what I understand to be hot markets.

Another article on the same topic. https://www.inman.com/2016/12/14/ris...-estate-sales/

I would definitely seek out this type of company if I was selling my house and not just because of the lower commission.

Is AI and Machine Learning what will disrupt and change the way people buy and sell homes?
To have a computer build a profile and then only show your house to people who meet the profile seems like a very ineffective way to sell a house and a very effective way to not get alot of money for a house.
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