Remember when a social network was you local high school’s PTA meeting? Maybe it was running into a neighbor at the grocery store and doing a quick “catch up” about how Millie down the street is pregnant and what do you think of the new couple that just moved into 4912? The book club or meeting some friends at the local watering hole for something other than a tweetup or hook up?
Yeah. Me, neither.
It seems that the social glue that holds us together is becoming more and more digitized. Facebook is where you find people you haven’t thought about in 20 years or become “friends” with people you have never met and will probably never see, in the flesh. Everything from tracking packages to tracking your pizza to getting your MBA can now all be done online. How much longer before we simply order up sperm A to be matched with egg B so we don’t even have to meet each other to propagate the species?
Brave New World meets Soylent Green.
The Digital Real Estate Transaction
The conventional wisdom in the echo chamber known as the RE.net is that the Gen Y and Millennial (Gen Z?) twenty and thirty somethings could care less about “relationship” and just want to get the deal done. If it’s a house, they’ll do all their shopping online, thank you very much, contact some digital real estate agent/company to put the deal together and wire the money to the title company. Of course, they’ll want to track the progress with an up-to-the minute, state-of-the-art online progress graph ala the Dominoes Tracker espoused by AG honcho, Benn Roasales, in his recent AG post.
Fellow AG columnist, Jonathan Benya, writes that videos sent via e-mail or transmitted online should be taking the place of the paper thank you note or phone call to update a client.
The Dangers of Conventional Wisdom
Don’t get me wrong. I’m totally onboard with the use of technology to assist with the successful and happy conclusion of a real estate transaction. If a potential home buyer or home seller doesn’t want to meet me or can’t because of pure physical limitations (e.g., they’re in Egypt and I’m in Maryland) than I am a gung-ho advocate of the use of whatever technolgy I can use.
Yet, I wonder if this groupthink mindset about tracking everything online is really useful.
It brings to mind a recent event where the herd believed one thing and reality was completely different: that mortgage interest rates were due to rise precipitously.
At the end of March (just four months ago), the Federal Reserve stopped purchasing mortgage backed securities in their effort to stabilize the housing market. Everyone knew it was coming. Everyone (with the possible exception of fellow AG columnist, Fred Glick) forecast the rise of mortgage interest rates. Some by at least a percentage point, others by more than that! The housing market was set to tank even more than it had and, if you were a smart consumer, you would buy, buy, buy right now before we saw interest rates soar to 6% or 6.5%.
Fred stood alone (almost) in predicting that private investors would step forward to buy the mortgage backed securities and we would all live to sell real estate another day.
In fact, herd mentality aside, mortgage interest rates have gone down!
The Moral of the Story
I’m not quite ready to throw in the towel and jump on the bandwagon for the pure Internet transaction. Maybe it’s wishful thinking on my part, but I like to believe that human interaction is still an essential aspect of buying or selling residential real estate. Purchasing a home or selling a home is more fraught with human emotion than buying a pizza or selling your mutual fund.
Communication with our clients is important. Tracking the progress of the transaction is important. Negotiating the deal is important.
And you need some real human interaction to make these things happen. A pretty online progress bar is no substitute.