I Have Seen the Future of Real Estate and the Future is…

Quill Realty. This company gets it. This is how all brokerages will function in the future. It is just a matter of time. Regrettably they are only available in Seattle right now. If I were selling a home there it is the only company I would consider using.

What is Quill doing that is so unique? They are actually pulling out of their local MLS (Multiple Listing Service), which is unheard of today. And why are they doing that when every other brokerage in the country belongs to an MLS? Because Quill understands that today MLSs exist ONLY to serve real estate brokers, and do almost nothing to help home sellers. And apparently Quill has this crazy notion that they want to serve home sellers more than they want to serve other brokers.

But you cannot sell a home without listing it on the MLS. Of course you can. When buyers shop for homes they do not go to the MLS to search for them, they go to Zillow or Trulia or Reatlor.com. And while it is true that those sites get their listings from the MLSs, anyone, including real estate brokers (like Quill), can send their listing directly to these sites and bypass the MLSs altogether. And that is exactly what Quill intends to do. And why do they want to do that? To save home sellers money. A lot of money.

When you list a home on the MLS you are expected to pay the cooperating broker. That is a fancy way of saying the seller has to pay for the buyer’s agent, a practice which is unfair to both buyers and sellers. By not using the MLS, Quill’s clients can forgo paying the 2.5% to 3% commission to the buyer’s agent.

By leveraging technology and NOT using the MLS, Quill will charge their home sellers just a 1% commission. That will save home sellers $25,000 on the sale of a 500,000 home (compared to the customary 6% commission). I would think that might get home sellers excited.

Naturally the other brokers in the area will be none too happy with this and will try to keep their buyers away from Quill’s home sellers, but with buyers seeing the homes on the Internet, it will be very difficult to do, and Quill knows that. A properly priced home in a seller’s market is going to get purchased, no matter how little the seller pays to the cooperating broker. Kudos to Quill for recognizing that AND doing something about it.

This is the future of real estate: listing brokers charging home sellers a fair price and home buyers paying for their own agents, if they feel they need one. I have seen the future of real estate and the future is…

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

The Root of all Happiness (and Unhappiness) When You Sell Your Home

Imagine you need to sell your home, and after doing all of your pricing homework, you fully expect it to sell for $500,000. After a few weeks on the market, you end up selling it for $490,000. How do you feel? If you are like most people, you are a little disappointed. You were really expecting $500,000.

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Now imagine you have to sell that same home, and after doing all of your pricing homework, you expect it to sell for $480,000. After a few weeks on the market, you end up selling it for $490,000. How do you feel? You are probably ecstatic—with an extra ten grand in your pocket.

So, the same home sells for the same price in the same time frame and in one case you are happy and in the other not so much. What changed? Your expectations.

When you sell your home, you can, to a great degree, dictate your satisfaction with the outcome simply by managing your expectations. In other words, selling your home is a really good time to be a pessimist.

Go ahead, assume the worst. It will never sell; I am going to take a bath; I am going down with the ship; I am going to be homeless; Nobody loves me. Really get into it.

Now that you have set your expectations properly, go ahead and do everything you can to sell it for top dollar. Clean it, paint it, stage it. Take beautiful, professional photographs. Price it a little below the appraised value. Put it on the MLS and every third party site you can think of (i.e., Zillow, Trulia, Realtor, Homes, Craigslist). Really market the hell out of it.

When listing day comes remember, it is okay hope for the best, just make sure to expect the worst.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Hey Home Seller, Nobody is on Your Side

You might think that in the $160 billion dollar industry that is residential real estate brokerage, somebody would be on the side of the home sellers. You know, the ones that contribute most of those $160 billion dollars. You would be wrong.

insaneAppearances aside, there is really nobody on the side of the home seller. That $160 billion is a mighty big trough, and a lot of people’s livelihoods depend on their continuing to feed at it. For starters, there are the real estate agents themselves. They may claim they act in the home seller’s best interest, and some may even believe it. Unfortunately, whether they acknowledge it or not, they suffer decidedly from the Principle-Agent Problem. For proof, look no further than the research of two noted Stanford professors. What did they discover about these well-intentioned servants? “All of the empirical findings are consistent with agents distorting information to mislead clients.”

If that were the limit to the problem, it would be understandable. Everybody in a more-or-less free market tries to do the best for themselves. I am okay with that. But those not in the real estate industry probably do not know there is an entire industry that does nothing but sell things to real estate agents (to make their jobs more palatable). This “agent support” industry is also not on the side of the home seller. They want agents to make as much as possible, regardless of how unfair it is to home sellers. For the greater the agent’s take, the greater their market.

Perhaps you think these new third-party sites (Realtor, Trulia, Zillow) are on the side of the home seller. After all, the information and marketing they make available can be very beneficial to home sellers. And that is true, to a point. But you have to understand who the customer of these sites is—where their revenue comes from. If you guessed real estate agents, you are correct. To the extent that these third party sites help home sellers, it is just a means to an end. The more home buyers and sellers use these sites, the more they can charge the agents to advertise on them. And more importantly, the more the agents make, the more they can charge them. These sites, while they will never admit it, do not want anything to jeopardize the lucrative commissions the agents garner.

And finally, perhaps you think the ancillary real estate services industry (title, escrow, mortgage, etc.) is on the side of the home seller. Definitely not. Unlike home buyers and sellers, who have at best a fleeting business relationship with these service provides, real estate agents have an on-going relationship with them. These service providers depend heavily on agent recommendations for their on-going business. Hell, some even pay for them with kickbacks, which is illegal. They certainly do not want anything to endanger “their” agent’s livelihood.

So there you have it. An entire industry purporting to serve home sellers when in fact they would like nothing better than to have home sellers pay as large a commission as possible to sell their homes. The bigger the trough…

To see how ReaListing takes the side of the home seller, click here.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

The Real Estate Industry is Full of Hypocrites

Talk to any real estate agent or broker and they will tell you that they put the customer first. One of the reasons they say that is because they have to. In order for them to become a Realtor™, they must agree to abide by the NAR (National Associations of Realtors) Code of Ethics, which insists on such ideologies. The other reason they say it is because it sounds really good. Who wants to work with a real estate agent that puts themselves first?

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The truth is, the real estate industry is full of hypocrites. While saying one thing for public consumption, they do the exact opposite in their actions. (Actually, that is the definition of a hypocrite.) And all the while they are betting that their paying customers (i.e., home buyers and sellers) do not notice.

When it comes to buying and selling real estate, information is everything, and timely information is even more important. Why else did the industry horde its coveted MLS information for so long? Its livelihood depended on it.

Now this information has been unleashed. Third party web sites like Realtor, Trulia and Zillow, as well as public-facing MLS sites, have made this information freely available so buyers and sellers can make more informed real estate decisions. Can anyone make the argument that somehow consumers are not better off having access to this information?

So, now that consumers do have access to this information, how is the industry reacting? In other words, are they still putting the customer first? Not according to recent industry headlines.

Some Realtor groups (here too) have decided to stop syndicating their MLS information to these third party sites. Other Realtor groups have decided to simply delay their listings.

And what has caused this change of heart? They offer up a litany of reasons as to why, but there is really only one reason: the third party sites are selling the leads they generate to the highest bidder (i.e., real estate agents). And the Realtor groups do not like that “their” data is being used to potentially benefit their competitors.

I cannot really blame them for their actions. But it does not change the fact that their actions benefit themselves at the expense of the consumer. And that makes them hypocrites. In a way, I would fee better if they just did away with their disingenuous Code of Ethics and just admitted, like every other for-profit company, that their behavior is dictated by their desire to maximize profits. The consumer would be better served with this novel form of honesty: forewarned is forearmed.

At the end of the day, everyone in the real estate industry’s number one priority is self preservation. They will do what they need to do, or what they think they need to do, even if it means putting their customers second. It is okay…just don’t rub your Code of Ethics in my face.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.