Feeds:
Posts
Comments

Archive for the ‘Internet’ Category

What if Lincoln Twittered?

Posted in Internet, Me Myself and I, tagged , on December 23, 2009| Leave a Comment »

I remember finding a letter from 1945, written by my father from the South Pacific at the end of the 2nd World War. Japan had surrendered, and he was sharing with his parents that he and his fellow soldiers were not so much jubilant as they were exhausted. He wondered aloud about the future of mankind with such powerful weapons in the hands of mere men. It was a very unique look into a time in my Dad’s life I would never otherwise see. For the first time, I related to my father as a young man with an unknown future.

Continued

Read Full Post »

Why Real Estate Brokerage Remains a Strong Industry

Posted in Buying, Internet, Selling, The Market, tagged , , , , , , on January 18, 2009| Leave a Comment »

The chatter has has been for years that the rise of the Internet would have real estate agents suffer the same plight as that of travel agents and stock brokers and be passed over in favor of discount, do it yourself websites. If people can find a home on the Internet, the reasoning was, why would they need an agent? Certainly, non-traditional brokerage, for sale by owner websites and discount models have become prominent, but they have not supplanted brokers. In an efficient market, if the efficacy of those models were so strong, one would expect brokerage to suffer a mortal wound.

And yet real estate brokerage has not declined. One can even make a case that brokers themselves have harnessed the net enthusiastically, with blogs and  personal websites with home search functions. With apologies to Mikey and Life Cereal, they like it.  How can this be? I’ll offer my observations here.

  • You can’t click on a house and buy it. You have to see it, walk through it, smell it, and sit in it. And few do that without a licensee present.
  • Few do that without a licensee present because most buyers don’t want the seller around when they look.
  • Even when the seller is present, most of the time they are deplorable salespeople. I have an interest in a non-traditional company. Believe me, commission “savings” is more than counterbalanced by ineptitude, lack of objectivity, and absence of professional advice. Many a seller has lost tens of thousands in sales price in order to save a few thousand in fees. Penny wise, pound foolish.
  • A trip or a security can be purchased online in 5 minutes. Real estate takes weeks and sometimes months.
  • Travel and securities don’t require an appraisal, title search, certificates of occupancy or engineer inspections.
  • Travel and securities are cash transactions that can be done with a click; real estate is seldom a cash transaction and even when it is, it requires far more due diligence. See prior bullet point.
  • At the risk of sounding Darwinist, overall real estate professionals are a tough and resourceful sort. This is a hard business. Brokers and agents the world over embraced the new technology and made it an advantage. They adapted, survived, and many thrive, even in this down market.  
  • In the same vein, good agents sell more property than mediocre agents. Good agents won’t take a pay cut to work for a discounter. Better agents work where they’ll earn more.

    • Brokerage is more than bird-dogging for a house. Who saw the house first is immaterial, and handling the shifting landscape of the transaction requires representation. People know that a few percentage points is a bargain for what they get in return, anecdotal horror stories aside.

    Interestingly, some of the non-traditional enterprises such as Foxton’s and Iggy’s House that endeavored to harness the net and gain market share via discounting failed spectacularly. The market is efficient; these concerns should have thrived if the models were viable. They weren’t. If the Internet were going to kill our business, it would have years ago. Until people can buy real estate for $500 immediately without seeing it, consumers will need our services. And that is a good thing.

    Read Full Post »