The web and the future of real estate

Here’s a message to realtors and real estate agents:  WAKE UP.  The web is changing the way real estate works, and if you’re not careful you’re going to become irrelevant.  

Even though people do it all the time, moving from one house to another – especially when those houses are separated by half of the United States – is still a very stressful event for most people (mostly because as individuals we do it so rarely).  The web has become an incredible resource to help in the whole process, not just in the ability to research the process but in selling an existing house and finding a new house to buy.  

I’ve used the web for research for many, many years now so researching the process of selling/buying was nothing new.  There is a lot of good (and like anything else not-so-good) information that can help beginning and experienced buyers/sellers alike.  

If you’ve not already seen it, take a moment to check out Realtor.com.  This was one of the first places we looked when we knew we were going to move.  (If you’re not in the market, just type in a search for your hometown.)  The range of available information is very comprehensive, and it includes all Multiple Listing System (MLS) listed properties.  In fact, we didn’t even look at any individual real estate broker sites.  If it wasn’t MLS listed, we didn’t see it.

One of the key things we used as a filter when screening results of MLS searches was pictures.  Plain and simple, if the listing didn’t have a comprehensive set of interior and exterior pictures we gave it only a cursory glance (if that).  When you are moving half-way across the country you don’t get many chances to actually look at a house, so pictures are very important.  

You’d be amazed at how many listings had only a single, wide angle picture of the house taken from the street.  Or worse, no picture at all.  The same was true of other key pieces of information that you may want to know about a house from a listing.  Only when we started interviewing seller agents to sell our house did we realize the reason for this.  What I thought was incompetence or lack of attention to detail turns out to be – you guessed it – the bottom line.  Money.  Commission.  

  • Want a listing in our brochure – 3%.  
  • A listing in the brochure with a picture or two, and maybe a mention (no picture) on our website – 4%.  
  • OK, we’ll put a picture and a bit more info on the web site, but only ours.  We want buyers to find it on our site so we don’t have to share the commission – 5%.  
  • What?  You want to have it listed in the MLS, so it will show up on Realtor.com (or another MLS site), with a bunch of high quality pictures and detailed information about the house that grabs people and makes them want to buy your house right then? (and we have to share the commission)  6%

The realtor we eventually selected to sell our house, Foxtons, is different.  They advertise themselves as a “full service 3% commission real estate agent.”  Take a moment and look at one of their listings, I think you’ll be impressed.  They have a professional staff that does the photography, floor plans, and overall web presentation.  (As opposed to tech-illiterate agent taking some blah photos with a cheap digital and throwing it on a page.)

As I understand the real estate business, real estate agents are not employees of a brokerage but simply use the name and basic resources of the agency.  They work purely on commission.  At Foxtons, on the other hand, real estate agents are salaried employees who also get a small part of the commission from selling a house.  

Currently they only serve the New Jersey, New York, Connecticut area, but I’m sure they will be expanding.  I think that the basic business model will spread and be successful.  

Unfortunately, I can’t really give a personal recommendation to use Foxtons.  Selling our house was anything but “stress-free” (as they advertise), in large part because of the very things that I think will eventually make them successful.

  • The agent we signed with left the company about 5 days after we signed the contract.  (We’re not sure if it was her idea or the company’s.)   But since the contract was with the company, and not the agent, we were stuck.
  • With no agent on our file, not a whole lot happened.  It took me showing up unannounced and not leaving until I had met with the office leader to get the process moving.  (In the hot market of Monmouth County, we only had 6 people look at the house in the first 2 weeks.)
  • When we had an open house, the person that was supposed to be there to show the house never showed up.  When people showed up 15 minutes before the start time of the open house and the agent wasn’t there, I figured I should stick around.  I called the local office, told them what was going on.  I ended up showing the house myself for about 40 minutes before anyone showed up from Foxtons.
  • Once we had a sale contract on the house, I never heard back from them (except when they, as the buyer agent, had questions or problems they wanted us to solve).  

Buying a house using the web, on the other hand, was a breeze.  We did a search on Realtor.com.  Used Google Maps, the St. Louis County web site,and the St. Louis County Geographic Information Systems to get more details on the property, the neighborhood, etc.  Narrowed the choices down to about 6 properties that we really wanted to see, and gave that list to our agent in St. Louis.  It took us less than a day to see the properties we wanted to see, and even less time to decide.  We were on contract within a couple of days of that.

The house we ended up choosing was the one we liked the most in the listing.  In many ways, it sold itself.

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