- Michael Shapot, Esq.
Uncertainties, Disruptors and Discounters, OH MY!
First there was COVID. Then Delta. Now - Omicron. And we must now worry about inflation and supply chain issues. Potential tax reform and political uncertainties. Changing protocols, including the return to masking requirements. The real estate industry is fretting about rising interest rates, inventory shortages, the status of retail and office leasing, the upcoming surges of mortgage foreclosures and the end to eviction moratoriums. Will international buyers return to the market any time soon? Will residential markets return to typical seasonality? The public thinks that homebuying is simple and that they can DIY because everything is online. Heck, good brokers make the process look easy! Technology helps with home searches, for sure, and signing electronically and closing remotely have become the new normal. But pricing? Not so much; Zestimates and Redfin are seriously flawed and the proof is in the lawsuits. Technology cannot create compelling marketing, negotiate killer deals, overcome serious objections, talk clients off the ledge, empower parties to make smart decisions, and move a transaction to the closing table. The newest player in the residential brokerage game is IDEAL AGENT, which promises introductions to top 1% agents who will sell your home for a 2% commission. You have probably seen their tv ads. I find the ads disturbing on so many levels: I don't believe there are top 1% agents in every marketplace who will work at a 2% commission. But assuming there was such an agent in a consumer's area, will that agent be the right agent for that consumer's particular deal? Let us not forget - real estate brokers are not commodities. The home sale process involves emotion, empathy and a successful transaction requires creativity, savvy and a personal touch. Think also about how a buyer's broker will be paid out of the 2% commission... Good luck to any seller who thinks Ideal Agent is a winning formula. Discount brokers have come and gone in the past (remember Foxtons?), and there is every reason to believe that Ideal Agent will suffer the same fate. Our business is way more complex than IDEAL AGENT and Zillow want consumers to believe. The sayings are true - you get what you pay for. There's no such thing as free lunch. When it looks too good to be true, it is. Uncertainties, disruptors and discounters will always emerge. Buyer beware.