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Digitized Real Estate – Outsourcing to the Internet

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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.

It’ll be more Second Life (or maybe closer to World of Warcraft) than IRL and it behooves us all to get with the program or be left behind.

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.

Maybe so.

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.

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“Loves sunrise walks on the beach, quaint B & Bs, former Barbie® boyfriend..." Ken is a sole practitioner and Realtor Extraordinaire in the beautiful MD Suburbs of DC. When he's not spouting off on Agent Genius he holds court from his home office in Glenn Dale, MD or the office for RE/MAX Advantage Realty in Fulton, MD...and always on the MD Suburbs of DC Blog

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20 Comments

20 Comments

  1. Sheila Rasak

    August 1, 2010 at 10:34 am

    A mentor once stated “if you’re not knee to knee with your client, you have no chance of representing them”. I firmly believe that for today this still holds true. Until a digital handshake is actually felt, I don’t see time changing all that much. Transactions are merely more streamlined and processed more conveniently.

  2. Benn Rosales

    August 1, 2010 at 12:41 pm

    “From the minute you enter your order (*the first time a consumer searches), your web purchase is personalized, it’s become your pizza, and the process is accurately reported back to you by the second. We as the consumer are no longer waiting in limbo, we actually know that Anthony just placed our pie in the oven to be baked to perfection (*semantic suggestions are relayed on the screen, from you), and I would argue that the days of ketchup sauce are over and their pizza actually IS substantially better.

    Beyond transaction management

    If real practitioners placed a value on the search process from day one that it meets the home buyer, you know, the day they began searching on your website, by reporting the consumer’s progress in searching, and semantically returning suggestions, the agent again becomes part of the search process. Continuing this same partnership as the consumer contacts the agent, with notes from the conversations, links to support the conversation, and so on and so forth.

    The pain staking detail involved in this automated process guarantees consistent service to each consumer, as well as informs them throughout the process. Rather than call them directly, a daily report is received that you (the Realtor) spoke with the lender and the notes from that conversation. Suddenly, the hidden process is revealed and value is apparent, more so than ever before.”

    read the rest

    *added for this comment

  3. Janie Coffey

    August 1, 2010 at 5:47 pm

    but do they have to be mutually exclusive? you can be highly technical and highly personal at the same time, they don’t cancel each other out, but can actually enhance each other. Additionally, I think the person on the other end, and their personal preferences, should really dictate which way we swing on the spectrum (if there is one) from high tech to high touch. Of course, just my humble opinion.

  4. BawldGuy

    August 1, 2010 at 7:15 pm

    It’s August/2010 and I don’t have digital signatures. No drip email. No newsletter. Almost none of the digital hi-tech I’ve been told would make me extinct in the next couple years — since 2005.

    Where are my ‘La Brea tar pits’?

    • Benn Rosales

      August 2, 2010 at 11:01 am

      Yet here we are, reading each other’s thoughts from San Diego to Austin. I feel as close to you today as I did the day we sat at Starbucks sipping go juice. I met you and we became fast friends, you became one of my great mentors and trusted advisors online via a blog relationship, solidified it with your endless starbucks giftcard face to face, warmly embracing both Lani and I- we’re a part of your life, originally connected digitally- and the world didn’t end. We sometimes jump to conclusions about originally when it comes to change, that it will radically alter our business, and our relationships for the negative. I know more about your life right now, then I do about some of my immediate family- digitally, but I’m positive, soon, I’ll be seeing you again physically. Imagine if we had documented what grandma and dad had to say in this fashion for all of us to learn… it just ain’t all that damn complicated as some make it seem. Known what I mean?

  5. hermanchan.com

    August 1, 2010 at 8:30 pm

    there is no tech-based substitute for ESP. Energy, Smile, Personality!

    • Janie Coffey

      August 1, 2010 at 8:34 pm

      if we could all have a smile like yours Herman 🙂

  6. Ken Brand

    August 2, 2010 at 8:27 am

    Boom!

    “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?”

    To me this IS the metaphorical point. The internet won’t replace the physical love making and sexual expression, what the internet can do is help us find the right partner, more partners, and new moves. It also helps others find us.

    Without the interent, and innovation, eventually, we’ll become overshadowed by the omni-present, attractive, and connected.

    There’s always an exception to rule, i.e. Bawldguy. But really, he’s omni-present and prolific with his mad writing skilz…which are digital, and online. In my view, he’s rock’n the online work harder than most. Sortof a digital wolf, in sheep’s clothing. (that’s a compliment, in case it doesn’t read right)

    Go, Ken M. Go.

  7. Phil

    August 2, 2010 at 7:29 pm

    Yeah, I agree with what you’ve said as the moral of the story but I guess being in this new generation we have to adopt the new technology where people all over the world could save money just to communicate each other. We all know that there are advantages and disadvantages but it’s up to us how to deal with them and what’s best for our company.

    Regards,
    Phil

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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