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You ask that on a forum dedicated to the human experience?
One study in one town, does not make for a national trend.
I would love to do a study with the same house being listed and being FSBO/Limited Service - see which would actually close for the most money and the least hassle.
Alas, not possible, too many legal consequences, and too many variables.
I know for a fact my clients are happier with me than without. And those that think they know more, or want it their way, well they are not my clients.
That study has been brought up and discussed here before.
How anyone could take a study of one small subsection of an entire market and feel that it is indicative of the whole market is beyond ridiculous. Especially when you are talking about homes around a University campus.
"We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices."
You will find that any studies done that come up with this conclusion is almost always around a major university. "Using faculty and staff homes" is the key in this. When faculty and staff are leaving their replacement is generally coming in and is most likely going to be looking in the same price range and area as the ones leaving. In the rest of the market you are not going to have this benefit most of the time.
Within the framework of a buy or sell transaction for real estate - what human experiences aren't replaced by availability of information?
If the RE industry plays its card right, it will be very profitable, albeit for far fewer agents.
Studies have shown home buyers and sellers don't financially benefit from having a full service RE agent:
I disagree with this. I do a large volume of buyer business and 90% of the people I deal with don't have the knowledge of the area, the contacts or the expertise to pull off a home purchase without a highly qualified and experienced agent.
Can they buy a home without me ? - yes. Can they make a much better purchase with my expertise in a shorter time frame ? - absolutely.
One thing I learned in any business is the one who controls the purchase controls the market (most of the time) in a balanced market. When millions of buyers purchase homes every year, at least 80% or more will need a good local buyers agent.
That study has been brought up and discussed here before.
How anyone could take a study of one small subsection of an entire market and feel that it is indicative of the whole market is beyond ridiculous. Especially when you are talking about homes around a University campus.
"We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices."
You will find that any studies done that come up with this conclusion is almost always around a major university. "Using faculty and staff homes" is the key in this. When faculty and staff are leaving their replacement is generally coming in and is most likely going to be looking in the same price range and area as the ones leaving. In the rest of the market you are not going to have this benefit most of the time.
May I add, that the study was done based only on the data of faculty and staff homes on the Stanford Campus, over a 26 year period. I beleive a similar study was done on the campusof Madison, Wi. with similar results.
Let me also add that this study concluded that such homes listed with full service brokers sold faster. In a declining market, such as what exists in most areas of the U.S., right now, the longer it takes to sell, the less net proceeds are realized by sellers.
I disagree with this. I do a large volume of buyer business and 90% of the people I deal with don't have the knowledge of the area, the contacts or the expertise to pull off a home purchase without a highly qualified and experienced agent.
Can they buy a home without me ? - yes. Can they make a much better purchase with my expertise in a shorter time frame ? - absolutely.
One thing I learned in any business is the one who controls the purchase controls the market (most of the time) in a balanced market. When millions of buyers purchase homes every year, at least 80% or more will need a good local buyers agent.
It will be a long time before that changes.
That's faulty logic; by extension, since 80% of all Redfin customers don't need a full service and experienced agent, then I can make the same argument that most buyers don't need one either.
It is more probable that people unfamiliar with the home buying process assume the first thing they need to do is go to a real estate agent. This may or may not be necessary. Some buyers will always want someone to do their search for them. But if most were given the tools to do the legwork on the same level a professional agent does and were told it would cut their total sales price by 4%, I think they would take the 4%.
Ask a car salesmen what (economic factors precluded) the sales process is like. I would guess less than 20% of all buyers begin their purchase process by walking in to a dealership and saying "I need a car, here's the features it needs, please help me make a decision".
In my own experiences, I've found most of the realtors I've worked with to be less informed about markets than I am, less willing to go the extra mile once I signed with them, and poor to mediocre at negotiating.
If you are a good agent, then you would be the type to benefit most if the MLS were opened up. The cream would rise and prosper while the bottom feeders and surplus of realtors would leave the profession.
Sorry...should've clarified my comments. Technology + access to information will result in industries that are fundamentally changed. It's just unavoidable.
And you're wrong about travel agents being undercut. Travel agencies are closing at record speeds now that consumers can quickly and easily book travel for themselves online. There will always be a need for travel agencies - business travel is a great example, but it will be a small fraction compared to say 1999 or even 2009.
To that point, here's a link about United passing on credit card fees to travel agents, nudging consumers to just bypass them altogether:
This has nothing to do with profitability - when prices come down, adoption goes up. To your point about insurance...you're right that nobody went out of business. Insurance carriers figured out ways to adapt to the fact that term life insurance could be comparison shopped. End result? Premiums are down smthg like 75% compared to what they were 20 years ago, but more people carry life insurance.
To the point about the MLS - this is the oil reserve for realtors. They refuse to open access to all the MLS-es. End result? Slowly, the information available through the MLS is being aggregated by software anyway. So give it 2-4 years, there will be no real value in the MLS over going to whatever Google or MicroSoft or Redfin etc.
Look at a site like FranklyMLS.com Virginia & DC MLS via Keyword Search & Wiki. Homes for Sale for an example. I can see tax history, price reduction history, comments history, comps, and other useful information for the DC/Baltimore metro area. On this site, realtors contribute heavily to reviews and photos of listings. The end result is they're more likely to reach a wider audience who finds their knowledge of a home or development or area useful and want that realtor to help with a targeted home search.
The RE machine is clinging to the past notion that you need an experienced realtor and access to the MLS to complete a transaction. They are fighting technology when they should be partnering with everyone to solidify their need in the marketplace. But instead, they'll find themselves looking on the outside in of the RE industry 5 years plus out at the expense of many realtors' careers.
Amazon is not primarily a bookstore either. They are a shopping mall, a retail data aggregator and distributor, a software company, a discounter, an auctioneer, a product data portal, and the list goes on. Who can compete with them? And, they're on record pace to put the nail in the coffin of books, magazines, and newspapers. Yet, the end result won't be that people don't read books, they will read more books because they cost much less to read on a Kindle or iBook reader or whatever.
Contractors are going to be forced to live or die by their reputation. When I tell contractors or handymen that I found them through Angie's list, they know I know what they've charged others, what their reputation is, and what their risks are to their reputation and ability to secure business moving forward. As a result, they're more honest. In the end, we all win because if we're paying less and work is more accurately priced, we have more money to spend on improvements or contractors.
Oh Lordy....
There are more online travel agencies than there ever were brick and mortar. Domestic airline ticketing is does as an accommodation. The real money lies with hotels rooms, cruises, tours and more complicated international airline ticketing.
Premiums for most forms of insurance have increased substantially over the years. Ask anyone who lives along the gulf coast. Ask anyone who has health care insurance. Ask anyone who has had an insurance claim.
Web sites like Angie's List are vulnerable. Contractors have friends and family who say wonderful things and damn the competition. And then there are the cranks.
More importantly, businesses pay other businesses to "seed" the internet on behalf of the sponsoring company and write of disasterous outcomes with the competition.
I am sure that someone as internet savy as you are, is fully aware of the risks of relying on what you read on the internet as it relates to product satisfaction/dissatisfaction.
Last edited by middle-aged mom; 08-11-2009 at 10:19 AM..
I think the travel agent comparison is very good. You can get lots of the same info from other sites and sources, but you cannot use the travel agents booking engine yourself unless you work for an accredited agency that pays the required fees.
In my own experiences, I've found most of the realtors I've worked with to be less informed about markets than I am, less willing to go the extra mile once I signed with them, and poor to mediocre at negotiating.
If you are a good agent, then you would be the type to benefit most if the MLS were opened up. The cream would rise and prosper while the bottom feeders and surplus of realtors would leave the profession.
Have you considered there may be something wrong with your "picker"?
This is like the guy or gal who always ends up with a loser in the relationship.
propertyshark.com. $34.95/month, sleep easily and keep the 3-6%
in addition zillow/trulia/streeteasy/craigslist/etc...
nothing against brokers but i'm looking to purchase my 3rd property, and in my first 2 properties i did most of the legwork prior to my realtor.. their comps were just the same as mine, and often times i knew more info on the unit/building than they.
the stench of defensiveness in this thread, both tangible and easily apparent, is due to the simple reality that the 6% model is slowly deteriorating as the web becomes more transparent with information, and the newer generation of buyers/sellers are simply more tech savvy.
i still eat lunch with my broker as a friend since our offices are blocks apart, but she more than understands why i don't use her when searching for properties, nothing personal.
i've heard of other agents accepting flat fees (hundreds, not thousands$$$) to simply forward MLS listings to friends/buddies, usually from younger (20 & 30 year olds) generation who are tech-saavy and can do the research and spend the extra amount of time (since they youtube and pandora at work anyway) to close on their own w/ just RE lawyer, no broker involved, saving themselves thousands. in terms of appraisers & inspectors, banks have their own and i never understood why realtors justify their fees for those services.
also never understood why some realtors think their industry is immune to a changing reality of a more transparent web. just as electric cars are replacing gas guzzling clunkers, financial exchanges are turning electronic, and airline industries are lowering rates to $29 just to cover fixed costs, i have to ask...
what makes you guys any different? not for my cheap and small ego, as i know where to look, now; but for your own sake? is it no surprise that smart realtors (yes, some exist) who choose to adapt to today's circumstances own their homes, and the majority who stick to the old model ironically still rent?
Please check PM's for simple questions!! In a similar situation with redundant research w/ current broker Thanks!
If you are a good agent, then you would be the type to benefit most if the MLS were opened up. The cream would rise and prosper while the bottom feeders and surplus of realtors would leave the profession.
While at some point the MLS's might choose to "open up" in the future, I honestly don't see that many sellers taking advantage of that.
My MLS costs $2,000 to join and $75 a month. It makes no sense for a seller to pay that when they can pay $399 for a MLS only service. For buyers, there really just isn't any additional information on the MLS that isn't on another site. Everything that is there that is private are showing instructions and commissions.
The surplus of Realtors due to the easy entry standards is the biggest problem in real estate and is the source of your problems in finding an agent that is useful to you. They are out there in all cities, but often times consumers have to sort through the average ones to find the stellar ones.
TurboTax hasn't done away with accountants. Things shift. Real estate is shifting, no doubt. It's a good thing, I think.
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