Thoughts on the residential real estate business getting uberized?
 

We've all seen the success of uber and airbnb, essentially disrupting middlemen style businesses.

What is stopping one of these companies from coming in and disrupting the whole homebuying process with an App or concept that saves time and money?

Searching for houses is essentially all done online now, you really only need a real estate agent to get you access to the house, negotiate poorly on your behalf while really negotiating for their best interest and do some paperwork (which should be automated)

The breakdown of fees is 6% in most cases (3% to each sides realtor) and that really adds up. The MLS system is literally 1999 style dated which is showing a refusal to adapt.

I feel like it's an easy sell, because we live in a time where people do not want to interact anymore. If they can do everything from a computer, they will.

The advantages to the buyer and seller are also there via saving a lot of money and time.

I am visualizing it just like buying a domain online.

Thoughts?

off topic: can you check your emails please mate, thanks :thumbsup

/off topic

Real estate contract law, and execution of contracts, is what's stopping the real estate sector from being uberized. Great idea though keep up the brainstorming man!

Who would be showing the homes? The owner or a third party?

I agree that realtors are overpaid (4% on my home was a huge commission), but its also the biggest purchase of your life so you probably wouldn't want to cheap out on it.

WG

Elaborate?

That seems to be the easiest part to figure out, how much education does someone require to show a home? This is the kitchen, this is the bedroom.... could probably have Uber drivers do it, they have criminal background checks heh.

Someone sent me this link, it looks like it's already beginning. Redfin seems to be dabbling with the beginnings of the concept by cutting out brokers.


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3D VR style video visit of the property ?


To OP , I agree it would be a great idea.

Its complicated. Here's a small taste, and these rules & regulations can be different from county to county state to state:

12 Ways to Foul Up a Real Estate Transaction

You have a great idea and so many things have come together to make it happen. I just read what is stopping it from happening, and I'm just giving my thought that real estate contract law & regulation is a bitch for most laymen buyers/sellers.

Redfin.com seems to be starting to pull it off, gutting the commissions. They most likely pay some part time jr agent to show you the house and they handle all the paperwork and both the buyer and seller win.

It's already being done to an extent. Online realtors are offering flat fees based on service offered. Just want a simple listing and you handle the visitors, very low charge. Once you've negotiated a sale price, just give each other your conveyancer/lawyers details and they'll draw up contracts and exchange. Traditional estate agents just market, negotiate and pass on each partner's details. If you can open your door and talk, you can cut out the estate agent. These guys have just arrived here https://www.purplebricks.com.au/

Shark Tank just had a self-showing lockbox run from an app. Wow would I like to view houses without making small talk with a realtor.

It's only a matter of time before this happens. Car buying too. These things are too freaking complicated. Download an app, enter in your social security number, apply for a loan, instantly get a response, walk into a dealership, click on buy, the screen shows you how much the car costs, how much interest you will pay, how long your loan is, how much the payments are, walk out with car keys in moments.

State licensing and regulation.

Uberizing would apply to FSBO (for sale by owner) transactions possibly.

Most (all?) sates have a law that regulates the sales of properties by owners or principals to 4 or less properties per year -- so you need a broker's license to sell multiple properties per year. There are complex ownership schemes one can use. A corporation counts as a legal person, etc.

There could be a Uber Broker (state licensed) selling as an agent over an Internet platform for a flat fee or something of that nature ... National sales would have to be using state government licensed brokers. You cannot escrow money then record property titles and loans without a state license either.

Redfin, Compass, Estately... the list goes on

In RE the only real reason you need a Realtor as a buyer is no longer to help you tap into off market properties or to find homes, but most of that can be found anywhere as data is aggregated directly from the MLS.

For a buyer it's more so for protection and navigating the process dealing with termite, inspections and to negotiate..if all that is done via a buying from a site, really no need for them. As a seller, it saves so much more money eg. Redfin 1.5% versus 6%, here with our avg home price at 900k-1M, and a mad buyers market (30 day listing) it's logical to ditch the old RE model which is, for the most part dead and more transactional just like mortgages and everything else.

Just like TrueCar for cars, no need to step on the lot and deal with commissions sales people...pre-priced, go on lot, test drive - like - buy

:2 cents:

Besides easier to find listings (internet) - nothing much changed in terms of your need for broker.
You could have sold your house without them before, same now.

For a flat fee I can listed in the MLS. Then I just handle it from there. I save the 3% on my side.

Three words: MULTIPLE LISTING SERVICE.

As a seller, you want your home listed on the MLS to attract the largest pool of potential buyers.

And guess who controls the MLS...yep realtors. They are not about to open up th MLS for free to any uber type movement.

Additionally, as a seller, you will also want to be offering the buyer's agent at least 2.5%. Why? Because if you don;t then no buyer agents will even show your house to their prospective buyers.

Realtors have the game covered.

Yup. If Im an agent and I see House A is offering me 2% to sell his house and House B is offering me 3%, I'm going to show House B first. I might never show the buyer House A.

Buyers go with agents because they get free representation. You're buying a house and you're scared to death of making the wrong move, of course you'll want representation.
If you use shit real estate services you'll get more shit buyers who aren't qualified wasting your time, and probably some criminals in there who want to scope out houses to rob.

No one is going to want unqualified, unrepresented, unvetted, and unknown strangers coming into their house looking around.

Agents also do all the paperwork, no?

A house or property is the biggest purchase or sale of one's life. Getting a good lawyer and surveyor is essential.

What does a Realtor do that's so vital? Even sorting out those who have the money ready is something they're not great at. Which is why chains develope and collapse.