A broker representing both buyer and seller in a real estate transaction is a common method in some parts of the world but not so in the United States. Will an increase in the use of discount fee operators and the likes of Redify in the US bring about a change driven by consumers chasing cheaper fees?
Topic – Real Estate and Prop Tech
Mentor – Brad Inman
- Service and quality
- Agents fall into 3 buckets
- The desire to explore and learn
Developing your leadership style – Jacob Aldridge – Coaching vs Managing
Kevin: Back with our feature guest this week, Brad Inman. And this time next week we’re going to be, well, right in the thick of it at the Inman Connect conference in New York. Next week we’ll bring you some of the headline speakers who will be speaking there so don’t miss that. That’s coming up next week. But right now, here’s Brad.
Kevin: Talk about the true impact of discount fee operators. A broker representing both the buyer and the seller in a real estate transaction is a common method in some parts of the world, not so much in the United States. In your opinion do you think that these discount fee operators, say, I’ll cite as an example, Readify, they’re operating in the U.S., do you think that’ll bring about a change from consumers who are chasing cheaper fees and how we do business?
Brad: It’s possible. I mean, I recently went to a Walmart store and there are two things about the store that hit me. It has a comprehensive inventory of products and it has really inexpensive products. It also has loss leaders and it has full price. And it would be considered a retail discounter.
Brad: Now, who goes in there for the prices and who goes in there for the comprehensive inventory and products? Probably all kinds of people, so I think it’s gonna be driven by service and quality. It’s gonna be driven by the complexity of someone’s transaction, either as a buyer that doesn’t have all their ducks in order, it’s gonna be dictated by sellers that have a house that’s a problem. The homes are not commoditized and the services can be, to a degree, commoditized, but whatever there is, at least today in the U.S., there’s always a realtor.
Brad: And, face it, in the United States 80% of our realtors are incompetent. They maybe do one or two sales a year. And they’re more than happy to take a paycheck to do administrative real estate transaction management for a Redfin or for a Purplebricks, and earn less. And then there are other agents that are full-service and there are some that are in-between. And I think they’ll each fall into those three buckets.
Brad: I think there’s always this impulse to say all of these innovations, which I’ve always supported, are going to hurt the individual realtor. They’re only gonna hurt the individual realtor if the consumer isn’t put first in terms of what the offering is.
Kevin: Very interesting point. I guess it’s almost a crossroads that we’re at where we look at the difference between a transactional agent and a relationship agent. The agents who’ve got the time to build relationships will have a much stronger business than those who just look at it as a transaction, Brad.
Brad: I love that description. And my description of it is I use the … I love what’s going on in outer space now and what we’re doing to explore space, private, public, countries, just amazing what’s going on … And I’ve been looking at different things related to that, that I think relate to real estate. Where did all this energy come to suddenly explore space again? Well some of it is to escape, right? The world’s falling apart here. Some of it is just the human imagination to move forward and learn and be educated and learn from other parts of the world. And I think that’s kind of the industry.
Brad: But the other part of it is take a supernova. A supernova, a star that’s kind of … It’s shelf life is over and it’s either collided with another star or it’s feeding off a star and that star doesn’t wanna feed it anymore and it blows up. And what happens? When it blows up particles are spread out through the whole universe and some of those particles turn into stars. And that’s the analogy I like in the real estate industry. The old ways of doing real estate right now is like a supernova; it’s blowing up as we speak.
Brad: But as we speak, particles are being spread throughout the universe and there’s all kinds of stars out there. New stars, innovators, people that are dedicated to service, people that are dedicated to doing the relationship side right, others that are committed to making fast and furious e-transaction possible, so it’s new and exciting universe. That enthusiasm are what people see at Connect. It’s a big test, you know? We’re not a trade association where there’s just a bunch of realtors. We’re not a tech conference and there’s just a bunch of tech people. The Inman centre’s huge and it’s diverse and it’s that dynamic of all these stars that are coming out from the supernova.
Kevin: I’m going to round out this series tomorrow with Brad Inman and we’ll talk about AI. Brad Inman, with us again tomorrow morning.