The Uber of the Real Estate Market? Disruption is coming. –

The Uber of the Real Estate Market? Disruption is coming.

This article was written in March of 2021. A real estate settlement that came out in March 2024 changes the way commissions are done. We added information at the bottom. It is our opinion this settlement will make it easier for automation to disrupt the real estate industry.

It is a sellers market, you have the power to negotiate a lower commission if you are selling a home.  If homes are getting multiple offers and staying on the market for a few days that is much less work the real estate agent has to do to get your home sold.  Homes are selling on their own.

What would happen if a company like Uber got involved with real estate?  Most likely major disruption, just as Uber did to the taxi industry.  Do you think a 6% real estate commission to sell a home is a bit high?  This percentage can be negotiated so the commission isn’t set in stone.  I always wondered why the Internet did not lower the commission percentage.  It used to take a lot of work to find someone a home.  Plenty of hours driving clients around not knowing if they had any interest in the home before arriving.

With the Internet clients have most likely seen plenty of pictures of the home so there is interest in some way or another.  With floor plans also available it is very easy for buyers to narrow down their home search.  However, floor plans are just starting to catch on and they can be expensive if you use an outside company to do it.  Should the 6% “standard” commission be lowered to sell a home?  If the real estate commission isn’t lowered is there a higher probability a company will completely disrupt the real estate market?  Look what Uber and Lyft did to the taxi cab industry: Uber and the Great Taxi Collapse.

Technology Makes it Easier

Technology has made it much easier to find a home, or at least to find a home that clients have interest in.  Here are just some of the ways technology has made home buying and selling more efficient and streamlined.

• Pictures on the Internet
• Comparison pricing of nearby homes
• Price and tax history of the home
• Features of the home
• Size of the lot
• Neighborhood statistics
• Floor plans for some homes
• Quick estimates to price a home
• HOA Costs
• The list can go on and on…

Lowering the 6% Commission When Selling a Home

This article is about disrupting the real estate market but guessing people selling a home right now would want to know how to lower the commission.  The easiest way to do it: JUST ASK.  If they say no, ask them why the commission hasn’t decreased over several decades?  Bring up some of the reasons why it should have decreased.  It is better to decrease the commission of the real estate agent selling the home first.  There are agents who will try not to take their buying clients to a home if it is a lower commission.  To sell a $150,000 home at a 6% commission takes $9,000 dollars out of the sellers pocket.  A $300,000 home at a 6% commision takes $18,000 out of the sellers pocket.  What makes it so much more difficult to sell a $300,000 home where the commission actually doubles?

The internet didn’t shrink 6% real estate commissions. But this lawsuit might.

Disrupting the Real Estate Market

Uber disrupted the taxi cab industry using what people already had.  People can drive, have cars and many are looking for work, or part-time work.  By using technology Uber made it easy for someone wanting a ride to find someone willing to give a ride.  Started off with a simple concept and took it to a whole new level.

The most time consuming activity for real estate agents is taking the clients to see homes so that is where we are going to initially focus.  If a house had a floor plan available with pictures of all rooms this would greatly help buyers understand if they like a home.  There are various apps that can do a rough floor plan of a home to help buyers understand the layout.  There would be instructions on the best way to take pictures of a home.  What if similar technology to Google Street View was used to film a house.  This way someone could virtually walk through a house and get a 360 degree view no matter what room they were in.  At this point if buyers were going to view a home it would be to confirm the accuracy of the information and then to put an offer on the home.

Disrupting Website

If you don’t already know this Zillow has the capability for sellers to put their home on the market by owner.  Pictures can be unloaded and provide much of the information that is on MLS systems that real estate agents use.  A new website could be set up that would lead home sellers through the process start to finish.  This website would give sellers a way to provide buyers everything they are looking for so if people are coming to view the house there is a high probability of buying it.  If standard contracts are utilized this further minimizes the value of real estate agents.  Definitely not saying real estate agents do not add value but is the value worth 6% commission on the sale of a home?

This article makes it seem that the home buying process is easy, it is not.  There are plenty of complexities.  But with technology disrupting so many industries why not the real estate market?  Why has the 6% commission stayed unchanged for decades?

Would like to hear from real estate agents what they think?  Do any future home buyers or sellers have comments?  Would love to hear feedback.  If there is something that doesn’t make sense or is wrong bring it up so it can be corrected.  Looking forward to collaborating on this topic.

Signing a Contract With a Real Estate Agent When Buying a Home

Adding this because it could save people a great deal of frustration.  A realtor will often ask buyers to sign a contract to show them houses.  This way it ensures that person is your agent and you can’t go anywhere else.  This makes sense, the realtor should get paid for doing the work.  However, there are some agents once you sign the contact they aren’t as responsive because you are now under contract.  I was asked to sign this realtor agreement.  I said if I am going to sign that agreement they need to sign an agreement for me to say they will drop whatever they are doing to take me to see any house.  They declined and I declined to sign an agreement.  The reason I say this is because realtors will go on vacation and not provide an alternative way to see homes while they are gone.  Especially now with it being a sellers market be sure the realtor is available, and if they aren’t available another realtor can be used.

This article was written in March of 2021. In March 2024 there has been a real estate settlement that is changing the way commissions are done. There are some stories below for further information:

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• Source: https://www.supplychaintoday.com/the-uber-of-the-real-estate-market/