The problem with tech & real estate

I am writing this post with a different audience in mind this time, this post is written to my fellow real estate practioners. I am writing this post to bring awareness to a disturbing trend that I have noticed for quite some time. The trend that I am speaking of is the involement of tech in the real estate industry, there are those that will say that tech has been in the real estate industry for decades. They would be correct, now let me say this right up front. I am not against tech, I actually utilize quite a bit of tech in my business. What I am speaking of is the trend of tech/tech companies coming in and pushing out the real estate agent.

Here are a few examples:
First off we have Redfin who started out like Zillow, Realtor.com and Trulia and now they have a Brokerage side to their business now and are directly competing with Brokers/Agents using the information that we provided to them. Now they leverage that information to procure buyers and sellers themselves.

Zillow takes the information that we (Brokers) provide them through the MLS and use it to market to consumers to use their site to search for homes. Then they turn around and sell advertising back to the agents/brokers that provided the information for them. Touting that they have x amount of potential homebuyers and sellers using their site and that they can guarantee a certain number of leads per month. Anyone that has ever paid for leads from Zillow knows that the quality of the lead is marginal at best.

Now the tech industry has taken it a step further, there are companies that are out there that allows for a home owner to sell their home completely online effectively cutting the real estate agent out of the process. Additionally, other companies are using robots to show homes. It's all designed to cut into the commission money that agents and brokers make. I was reading an article were one of the founders of the tech company that I referenced above was explaining why they started the company and he and his partner started the company to cut the agent out of the process. They were upset over a property they lost out on because the agent they were using was at a party and didn't see an email responding to the offer they made and by the time they found out it was too late.

As an industry we have gift wrap things for them and painted a target on our backs with all of these Million Dollar Listing shows that portray agents making insane amounts of money with what seems to be minimal effort. We have been our own worst enemy and our Associations/MLS's haven't been much help. The residential real estate market is under attack and it seems that no one is paying attention. It may already be too late but Brokers need to act now or our industry will be controlled by tech companies.

Comments

  1. EvelynSeptember 23, 2018 at 2:36 PM

    The site was so nice, I found out about a lot of great things. I like the way you make your blog posts. Keep up the good work and may you gain success in the long run. American Dream Homes, Inc.

    ReplyDelete
  2. aaronnssdOctober 24, 2018 at 12:05 PM

    I have read your blog it is very helpful for us. I couldn't find any knowledge on this matter prior to. I would like to thanks for sharing this article here. If anyone looking for the Apartment Valuation Services in Dubai, Visit chadils.com

    ReplyDelete

Post a Comment

Popular posts from this blog

Why don't we?

Today's post is a bit of a rant, but I have to get this off my chest. People spend money on some of the dumbest things to me. Rather than spend money on investments, they spend money on cars, clothes and a bunch of other things that has no real value. People have become so materialistic and so focused on looking like they have money rather than doing the things to actually have money. I have a term that I use to describe people like that "Hood Rich". Now I am not saying that people are hood or anything like that. It actually doesn't pertain to were you live, it pertains to your mentality. It's like someone driving a $80k car and living in an apartment. Why? I would rather drive a Toyota Corolla and live in a Mansion than drive a Mercedes and live in a 1 bedroom apartment.  I said all of that to say that people need to spend their money on things that will appreciate (increase in value) not things that are worth less money the moment you buy them. Now I am sure t...
Read more

To buy or not that is the question

There has been a movement of late where today's young people have decided against buying and have decided to rent. There are some compelling reasons that support this thought process however buying a home is still a better option then renting. There is one truth that there is no way around and that is the fact that you are literally throwing money away by renting. If you are paying $2000 per month to rent and the house you are renting appreciates 10% over the time that you are renting you get absolutely nothing other than the bundle of rights you are entitled to as a tenant. If you are purchasing that same house and paying $2000 per month you are entitled to the 10% appreciation. Now keep in mind that if you are renting you don't have to worry about taking care of the maintenance and home care that you do when you are the homeowner. So although homeownership is great you do have to be careful, buying any home is not the answer. That being said in my opinion you won't fi...
Read more

R. E. Investment: Buy and Hold

Hey guys! We are back for our next installment in the investment series "Buy and Hold" so lets get right into it. The buy and hold strategy is probably the most well known and most common real estate investment strategy. Although it is the most commonly used in my opinion it is still a very misunderstood strategy. Often times a novice investor chooses this strategy when they want to get into investing in Real Estate, but there are lot of things to consider when looking to buy and hold real estate. #1 Are you looking to buy and hold a property to have monthly cash flow or are you looking to hold the property until it appreciates in value to a certain price and then sell(delayed flip). Although they seem similar they can be two different approaches. I know investors that only invest in new home subdivisions, meaning they will buy a home in a new home subdivision in the early phase or 1st phase of construction and hold that home until later phases of the construction is com...
Read more