There is a revolution taking place in the real estate industrythat is affecting consumers, professionals and organized real estate as we know it. The successful resolution of this revolution will produce a more efficient real estate marketplaceto the benefit of the consumer, brokerage firms, and the trade organizations that represent these firms, organized real estate at the local, state, and national level.
The public must become more knowledgeable about what for many is the largest purchase of their life up to that point, the purchase of a home. Knowledge is power. The public wants more for their money and are willing to, in some cases, do some of the work.
They will do what is in their best interest, making informed and knowledgeable decisions.
Inefficient structure of the practice of real estate-- only getting paid when escrow closes-- rendering all work done up to that date as amounts to no value in the event escrow does not close. This inefficient practice leads to inefficient pricing of services. Consumers will demand an unbundling of services as the public gains broader access through private MLS and other databases and a better understanding of the professional relationship they have with licensees.
• Commissions are too big an expense when viewed in the compound interest context. Not to mention % of equity.
• Demands of the market will create the product or service.
• Change in the workplace/technology/access/Fee for service
• Larger offices (50 Plus agents). Fewer less than 50 agent offices
• Overhead (including errors and omission insurance).• Agency
• Representation and buyer brokerage
• Fiduciary duties
• Dual Agency
• Defined responsibilities and loyalties
• Reduced liability
• Flexible fee structures
Real estate industry goes to regionalization (consolidation of boards and MLS's) as being more cost effective "Board of choice" will make boards more competitive and therefore more cost effective, providing more for less for the participating member. The threat of outside forces taking over database and loss of MLS income would financially cripple and destroy many boards, which would dramatically change the look of “Organized Real Estate.”
We can teach consumers how to deal in this changing Real Estate environment and save money.
We can teach Licensees how to deal in this changing RE environment and make more money.
(Written in 2004)
