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Old 05-06-2018, 02:49 PM
 
Location: Bloomington IN
5,867 posts, read 7,089,766 times
Reputation: 14099

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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?
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Old 05-06-2018, 09:05 PM
 
362 posts, read 204,345 times
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Willing to bet exactly zero of the guys who gave them the 25 million in capital ever sat through the 1 hour lecture of the fair housing act every licensed agent went through. There was plenty of targeting of potential buyers before fair housing and lawsuits put an end to it. The MLS exists because its a non discriminatory way to advertise and a buyer can set up exact specs their client wants and the MLS automatically notifies them of a new listing that meets the criteria.

There's an old Texas car seller phrase "don't judge a book by it's cover" where high and mighty salesmen would miss a Cadillac buyer because the guy who just hit it big on a well walks in with a tshirt and ripped jeans with 50k in cash in his pocket.

There are plenty of customers for houses outside of 5 miles away which is how they say they micro target. Relocating executive, airline pilot, doctor rotating into town, etc.

In the end it all counts on continuing data which as soon as the technology becomes prevalent a giant market in shielding your data will form thus removing people from the targeting.
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Old 05-07-2018, 04:12 AM
 
1,939 posts, read 3,302,275 times
Reputation: 3348
Quote:
Originally Posted by rrah View Post

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.
It certainly makes me respond in a particular way! I clean all browser history, cancel cookies, install ad blocking software, and stop visiting the web sites where the ads are displayed.

Annoying potential customers is not an effective tool to build sales!
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Old 05-07-2018, 05:42 AM
 
Location: Cary, NC
31,605 posts, read 55,320,924 times
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There will always be attempts to build expedient models to skim the cream, pick the low-hanging fruit, etc.

The real challenge will be how soon, and how competently, will machine models develop ability to serve what portion of the market?
Most "disruptors" limit their target market greatly due to lack of flexibility or margin, or due to excessive perceived liability risks.
How will that change?
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Old 05-07-2018, 06:18 AM
 
16,493 posts, read 17,525,712 times
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Imo it’s gonna come down to the actual participants of the home sale. That’s the buyer and the seller. When they get tired of paying the “standard 6% commission fee” the market will change. Until then it’s gonna go as it’s 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. It’s either gonna happen or it’s not .
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Old 05-07-2018, 06:52 AM
 
Location: Raleigh NC
7,764 posts, read 6,119,124 times
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there's a local (North Carolina-based) provider that is doing their darnedest to throw spaghetti against the wall to see what sticks. At this very moment, going to their website quickly gives you an "Unsafe website - go back!!" warning, and explains their security certificate expired 2 months ago.

For ANY Seller that chooses LOWEST COST as their primary motivator, there have been and will be numerous models that meet their needs. For highly-experienced home buyers/sellers that are up on current laws and practices in their market, the data-driven folks will be a good source of great deals from time to time.

For example, I'd love to hear how this company has a better idea than Zillow of what the value of a home is. When Zillow, or these other pricing algorithms, are 10-20% low .... there's an opportunity.

And BTW, I personally already use some of the tools from the linked article. As noted, there's a lot of emotion in the home sales process - emotion on both sides. For the near future I'll stick with the mantra "When the s*** hits the fan, there's no app that can."

"We don't know why being 1.3 miles from a Starbucks provides data that says you're likely to move. We just know it does." At some point, you've got to get your eyeballs off the computer and figure out which is the cause and which is the effect. It's certainly moreso that Starbucks decides to locate where the money is, not the money locates where there's a Starbucks.
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Old 05-07-2018, 07:28 AM
 
Location: Columbia, SC
8,848 posts, read 17,443,646 times
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There are disruptors that haven't been talked about. RE/MAX was a disruptor in the 70's because it changed RE company models. KW was a disruptor because they changed recruiting and pay structures like RE/MAX. The low fee "house a license" brands are next but they aren't good for RE. Too many of their agents are poorly trained and lack oversight.

The internet changed lead gen and marketing and Zillow took it next level. Z may become the next disruptor as a buyer or if they do eventually get into brokering deals. They may not though because they say the still plan to use agents. Offerpad or one of the companies allowing buyers and sellers to connect directly may take off but there are still questions I have on how it holds up when the ish hits the fan and lawsuits start to pop up.

Docusign and dotloop have changed the business significantly. The next 10 years will be interesting but if something happens to cut agent population it may be a good thing. There is too much incompetency out there. Heck, when I started in 2005 we still had a book each month with listings printed and carbon copy contracts. Now I'm mostly paperless.

I don't see agents going away but the role may evolve. Like Brad Pitt said in Moneyball: - "Adapt or die."
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Old 05-07-2018, 08:16 AM
 
Location: Cary, NC
31,605 posts, read 55,320,924 times
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Again, absolute fact in the vast majority of home sales in the USA:

One has to proactively seek out a 6% commission arrangement, and choose that rate.
For many years, the average commission has been much lower in most markets.

So for the majority of consumers, the "standard 6%" is a choice and a nearly irrelevant strawman in the discussion.
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Old 05-07-2018, 08:57 AM
 
Location: Tennessee
20,968 posts, read 15,285,903 times
Reputation: 23757
Take this from a layman's opinion.

When dealing with a real estate agent as a buyer, you're largely paying for expertise regarding the neighborhood, pricing, assistance with paperwork, etc.

For some people, they need more of the handholding. I live in my home metro. I know the place backwards and forwards, from what schools are quality, to blocks that have the most crime, to what can be expected of appreciation in the different cities/counties. I'm a data-driven person. I can easily pick out what's going to be a quality purchase or not in my local area.
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Old 05-07-2018, 09:10 AM
 
10,271 posts, read 6,500,789 times
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I think it will take sellers and buyers to tell RE agents they won't pay 6%. You may think a buyer doesn't care because the seller is paying the RE agent's but that's built into the price of the home and one day they may be sellers so it's in their best interest to have a system where a lower rate is paid.

If you are in a low cost area where homes or condos cost $50K then the buyers agent really does earn his $1500 or less if he has to split it with his broker especially if they have taken you out for a few days to look at several homes each time.

If you are selling a million dollar home does the listing agent or buyer's agent deserve $30K. I would say it depends on how much the listing agent spent to possibly stage the home or other costs associated with selling the homes such as photos.

If you are selling a million dollar nothing basic home because it's in silicon valley and the home itself would sell for $100K in another market and it sells itself I don't think each side deserves $30K.
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