I spent 10-15 minutes watching the first zoom call by our MLS representatives yesterday who were informing us about the big MLS upgrade coming on September 21st.
But it turns out that the big ‘upgrade’ doesn’t mean we will get a shiny new car to replace the turd we’ve been driving around since the mid-90s. Instead, they will tear our current system apart, and hope we can figure out how to put it back together – see the FAQs above.
Not only that, but the ‘upgrade’ will means from September 17-20 they will turn the MLS into ‘read-only’. No new listings, no price reductions, no new pendings, etc.
Great – put us on an involuntary four-day vacation while you deconstruct the main tool we use to sell homes, and then make us put it back together by ourselves.
The real purpose for the ‘upgrade’ is so our MLS will better conform to RESO standards, which would make it easier to create a national MLS someday. The only reason to have a national MLS was if you were going to have a search portal to go with it, and mount an attack on Zillow.
We did get more news about that today.
The Broker Public Portal announced they have hired a face of the project. Inman News wrote a full article on him, where he said that he expects to overtake Zillow in the next two years. Here’s the closing segment:
“When that shopper is ready to become a buyer, and wants real information about the property she’s interested in, she doesn’t get re-directed to some random agent who has probably never seen the house. She goes right to the agent who knows that property best. That’s better for the client, and better for the agent.”
Rather than spending hundreds of millions to advertise to consumers, the BPP will spread the word on Homesnap via agents, according to Rand.
“It’s a lot easier and cheaper to market to a million real estate agents than 250 million raw consumers. If we get the agents, they’ll bring the consumers,” he said.
He thinks consumers are going to leave Zillow because agents tell them to use Homesnap? The Homesnap app would have to be a far-superior portal for that to happen, AND the Premier Agents who make a good living from advertising on Zillow would have to want a change.
Sounds far-fetched to me, especially within two years.
Generally speaking, the realtor community is a nice bunch of folks who welcome newcomers into the business and offer encouragement…….while muttering under our breath, ‘They have no idea what they are getting themselves into’.
New agents bounce around like a pinball for a year or so, while the business is happening to them. The more hours invested, the quicker the education, and the potential is truly unlimited. It’s why agents stick it out as long as they can, in hopes of success being right around the corner. But seven out of eight don’t make it.
Last week we talked about getting your license first.
Next, recognize the hard truths about the business so you can position yourself accordingly:
The majority of your sales will involve another realtor you don’t know, and most of them won’t share your selling skills or desire to succeed. You want/need to be a chameleon and meet them on their level – and you will learn something every time.
You want to spend money on your business. Keep an eye out for the best options.
Get comfortable with failure – it happens a lot. You’ll learn to live with losing fair-and-square, but there will be multiple times that the human condition will disappoint you. The majority of the time it’s inadvertent; where agents get in such a rush to sell something they forget about everyone else, including you and their seller.
Listings are the name of the game. If you want to minimize the negative impact of the things above, then concentrate on getting listings and everything else will take care of themselves.
Here’s a way to support homebuyers at all levels without taxpayer money:
WASHINGTON (August 7, 2020) – Legislation introduced by Senators Doug Jones (D-AL) and Cory Gardner (R-CO) is being recognized as a critical component of the national effort to address the barriers to first-time homeownership in America. The National Association of Realtors®, which previously submitted a letter in support of the legislation, expressed optimism that the American Dream Down Payment Act and other similar proposals to address housing affordability would continue gaining momentum on Capitol Hill.
“The resiliency of our residential real estate market has been one of the few bright spots of America’s economy during this pandemic, but numerous would-be homebuyers are finding it difficult or impossible to save the money needed for a down payment on a home,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “This is especially discouraging given record-low interest rates are making it easier for aspiring homeowners to afford monthly mortgage payments.
“Modeled on the very popular 529 education savings account concept, the American Dream Down Payment Act would allow savings for the down payment of a principal residence to grow tax-free, offering a responsible and commonsense approach to the multi-faceted problem of housing affordability in America.”
In its letter sent Monday to Senators Jones and Gardner, NAR relayed hope that these accounts could serve as a tangible resource to aspiring homeowners who have been unable to save sufficient funds for a down payment. According to the Urban Institute, two-thirds of renters have identified the inability to save for a down payment as an obstacle to homeownership.
“We appreciate your initiative in putting forth a reasonable proposal that should attract support from your colleagues as well as the growing population of those for whom down payment assistance would help open the door to their all-important first home purchase,” Malta wrote to the lawmakers.
As described by Senators Jones and Gardner, the American Dream Down Payment Act would:
Let states establish American Dream Down Payment Accounts, which they would manage in the same way they manage 529 Plan accounts;
Allow prospective homeowners to save as much as 20% of today’s home cost, indexed for inflation, to use for an eligible down payment and other housing costs;
Facilitate long-term savings for a down payment and allow contributions from family and friends; and
Allow homebuyers to use those savings and earnings tax-free at withdrawal for eligible expenses.
The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.
Just when we thought there was a set policy on Coming Soon listings, they change it again.
The IDX is the agreement among realtors to share each others’ listings on our own personal websites, which was a great idea before search portals. But IDX was written off as a waste of time because now consumers have found better options like Zillow.
Are they going to change to their realtor’s inferior website, just to see the Coming Soons?
Wasn’t the idea of Coming-Soon-listings-on-the-MLS supposed to give realtors the distinct advantage of controlling the distribution? Oh well, maybe that was just me who saw that advantage, because it sure wasn’t considered in this decision. They are all going to be out in the open now, and we might as well let Zillow have them too.
The water is already muddied by Zillow allowing the Premier Agents to do their own Coming Soon listings separate from the MLS, and by agents ignoring the rules on social media. Who knows if agents are flagrantly abusing the rules or just forgot them already (more probable) but I see the old standard Coming-Soon pitches on social media now that are supposed to be inputted into the MLS by the next day – but they show up a week or two later, just like before.
Here are the new/updated rules for those who care:
No mention of Private Exclusives – which are allowed by N.A.R.’s Clear Cooperation Policy – where any agent in the same brokerage can sell an in-house listing without any MLS or public exposure.
I don’t get the No Showings policy either. Do they really think an agent is going to deny showing their Coming-Soon listing to a buyer who contacts them directly and promises to pay full-price cash? I’ve already showed Coming Soons listed by other agents to my buyers, and the listers didn’t think twice about it. If they had a chance to double-end the commission, wouldn’t they just pay the fine and be on their way? The max fine is only $2,500.
This whole topic was a mess, and now giving buyers direct access to the list is not only going to tempt them to go directly to the listing agent (which is opposite to NAR’s intent) but consumers will also get a better look at how disorganized and unruly we are.
I’m going to help a few people get started in the business, and hopefully make a career of selling real estate. I figure I should just publish my guide right here on the blog, and Fridays are a good day to do it!
Let’s explore what it takes to become a realtor in 2020!
It’s so easy to get a real estate licensee, demonstrate your commitment to yourself and get one.
Online training courses give you the basics and prepare you for your state test, which is 150 multiple-choice questions – get 70% of the answers correct and you pass! You can’t sell real estate without one, so if you’re in it, to win it, get a license so you can get paid right away!
There are two sides of the business; sales and transaction coordinating.
If you are a great people-person, then being in sales is for you. It’s called a ‘salesperson’s license’, but so far all you’ve done is pass a test. Getting out and speaking with people regularly about buying and selling homes is the job.
If you’re not a people-person, or want to work your way into the sales business, you can take a more clerical job in transaction coordinating. Once the salespeople have brought a buyer and seller together and completed a written purchase agreement, then we have staff assist with making sure all the necessary details get done to close the sale. This job pays around $30,000 – $50,000 per year if you don’t mind working a few 12-hour shifts along the way. There is a limited future unless you can create your own company.
Oh, you want to be in sales? What’s the difference?
You don’t get paid anything along the way. You’re paid on commission. You need to sell, to get paid.
It’s not that comfortable for the first twenty years, but you’ll get used to it.
What’s realistic?
You probably won”t make much money during your first year, so have sufficient financial backing that you don’t have to sweat it.
Expect to spend money on your business. You are an entrepreneur – a business owner – and it takes money to make money. But if you are a socialite who can generate leads from the yacht club then more power to you. We will help you pursue leads. Compass is touting our new AI engineering, and it promises to help.
You need someone to teach you the ropes. You need a mentor.
The big brokerages offer a mentor program with classroom training and a manager. It’s the basics, and better than nothing. But ideally you want on-the-job training where you are learning while doing.
In summary: Get a license, have some money in the bank, and find the best mentor you can.
For every tech platform that sets out to disrupt real estate, there’s a story of slow evolution to working with brokers and agents. And while companies like Zillow, Opendoor, and Offerpad have brought about minor changes to the home buying process, they always end up morphing into our traditional system. Why is it that these so-called disruptors just can’t change the way we do real estate?
In this episode of Industry Relations, Rob and Greg are exploring why would-be disruptors have such a hard time changing real estate. Greg walks us through his five-stages-of-grief analogy around how tech platforms always end up working with brokers and agents, and Rob compares real estate with the auto industry, reflecting on how little buying processes have changed despite advancements in technology.
Rob and Greg go on to introduce the idea that the human connection is what prevents tech disruptors from succeeding in our industry, speculating that agent teams have been the biggest disruptor in real estate in recent years. Listen in for insight on how human knowledge and connection factor into making tech platforms successful and learn why the human need for approval is not disruptable.
Reader AI said that “Eventually the big guys will own the entire process from beginning to end and the consumer will suffer, and pay more to do so”. Zillow is on the verge of owning the entire process, but they aren’t the only ones trying. Here’s another example:
In addition to resuming iBuying across 800 markets, Offerpad is now offering to list and sell homes for their customers.
According to Offerpad, “We aren’t a discount brokerage. Actually, we provide more services when listing than anyone else can. We’ll maximize home values in the end and get the home to sell for more so the customer can earn 3x, 4x, 5x, more than the difference of our commission fees and those of discount brokerages. Fees could be 5.5% – 6% depending on the market.”
Because the definition of real estate service has never been established, newcomers make any claim they want. They hope that in the end, the winner will be whoever advertises the most – truthful or not.
Compass is the last bastion of old-fashioned realtors. The company is hiring successful listing agents, and supporting them with additional tools in order to build market share that will survive the disrupter onslaught. We’ll see if it works, but it will probably include expanding into the mortgage/escrow/title business too, just to keep up.
The rest will claim to be top-notch professional realtors, but will consumers know the difference? Or care?
Our reader Another Investor has been supportive of the blog throughout the years. Her comment from the second link above still makes me wonder about the future:
We’ve already seen how the natural real estate cycles have been crushed, and now here we are in the middle of a world-wide pandemic, rampant unemployment, and racial/political unrest AND PRICES STILL KEEP GOING UP. There is nothing natural, normal, or historical about it – we are living in a different world. Today’s real estate market is tailored for the elite, and their insiders.
The days of individual realtors helping families with achieving the American Dream are just about over, and as AI said, ‘the Klinge era of service to clients is coming to an end’. All I can do is to try and help as many people as I can before I get pushed out.
We ended up with four offers on our latest listing, and all came in over list price.
I’m always going to do a highest-and-best round – not to work over the already-beleaguered buyers who have probably lost others and just want to get it over with – but to make sure everyone felt they had a fair shot to buy it.
The winners also took the opportunity to submit a SECOND love letter that out-shined their first when they mentioned that they just found out this week that they were pregnant again (they had pointed out in their first love letter than their first kid was about the same age as the seller’s little boy) and they wanted their family to grow up with others they knew who had just moved into the same neighborhood! My sellers were pregnant when they bought this house so the connection was very real.
The agent who represents the winners was the first to call me about the listing, the first to show the house, and the first to write an offer – be ready!
The motivated buyers are on alert and will drop everything to come over for a look. Yet how often do we still see few or lousy photos (and rarely a real video-tour), no showings for days or weeks after MLS input, or listing agents who are nowhere to be found?
