Richie Alan  Naggar, agent & author  (people first...then business Ran Right Realty )

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Rainmaker
4,114,508
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I don't think there will ever be a "one size fits all" world for real estate, Richie. And the cost of doing real estate at a high level gets ever more expensive...

Jan 21, 2019 07:51 AM
Rainmaker
1,386,873
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

The mastermind group I went to last week was talking about the last point.  Here are my thoughts, Cali centric.

In the near term (1-5 years):

  • The courts will find that real estate agents can no longer be considered independent contractors for purpose of taxation, insurance and benefits.
  • Courts will force agents to become FULL employees of agents (not just employees in all respects except as above), which will include benefits.
  • Companies will be forced to cut agents who don't make enough to cover the roughly $50,000/yr in expenses that employees will now accrue (minimum wage + taxes + insurance + healthcare + ...)
  • Roughly 80-90% of agents will be fired over night.
  • Broker-Associates will open their own offices as full Brokers to maintain their lifestyle and independence, but not hire any agents under them.
  • There will be many boutique agencies and the mega companies like Keller Williams (with ~300 agents in each of the offices in my area) will be a shadow of their former selves, with MAYBE 20-50 agents MAX.

 

Further out (5-7 years), I see:

  • Reduction in the amount of boutique firms as people leave the industry.
  • "Block chain" starting to enter the arena and automate certain parts of the transaction.  This will impact lenders and escrow officers first.
  • Large entities like Zillow and Amazon enter the real estate market fully, but in some new way and as "one stop shops."  Maybe even including listings on their site.

In the distant future (7+ years) I see:

  • Real estate agents being phased out.
  • Real estate agents being used to do parts of transactions only.
  • A self-serve model of real estate, based on automation, zestimates and the ever popular buzzword "transparency" being the norm.
  • One to Two years ago on Shark Tank Barbara Cocoran bought a lockbox that allowed the home owner to control the showings.  They could verify the person and grant access from their cell phone.  This box will become a thing you'll see on FSBOs and now most real estate listings.  You'll start seeing it around year 4 or 5.  With people now more willing to let strangers deliver Amazon packages directly inside their home or car, it's not a stretch to see them allowing people to roam in their home without an agent.

 

My time table may be a little off and world events will impact it.  A global recession, populist revolt, anti-technology movement may delay or even cancel some of the later years items.  In a rapidly appreciating market, every Tom, Dick and Harry wants to get in and thinks they can make us obsolete with cut rate programs or (now) technology.  When homes sit for six months and people start burying Saint Michael statues, this will be different.  They won't want to blame themselves.

 

I do see the near-term lawsuit and related changes as being something that will happen and cannot be stopped.  The rest, agents and our associations/trade unions still have time to put the brakes on it and explain our value and why we're worth X% of the sales price.  If we fight the technology, we may be able to win.  But that would require agents and Brokers to pull their listings from portals and shared websites.  Take back control of the data and be the conduit again.

Jan 21, 2019 08:45 AM
Ambassador
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Real estate is not one size fits all. Some patients will travel to another country to get a medical procedure done ... because it costs less. Those same people may be a FSBO or hire a full commission agent.  I am not concerned. In the end, people make choices for different reasons.  

Jan 21, 2019 08:30 AM
Rainmaker
1,722,655
Lyn Sims
Schaumburg, IL
Schaumburg Real Estate Agent Retired

Remember people saying this 12 years ago or so & the exact opposite happened? People in my area are still afraid to death to sell themselves or get involved in some gimmick (Redfin). You have to provide value in the end.

Jan 21, 2019 08:17 AM
Rainmaker
894,375
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Who can you trust to have your back?

That individual will be selected, in most cases completely independent of affiliation. In some cases regardless of their fee.

First timers may choose with different criteria the first time. How they choose subsequently will depend on the above. Some will not make a mistake. Others will not want to repeat theirs.

A bad experience with a big name could ruin it for the big name in the future.

Enter referrals and recommendations.

I think it was Seth Godin who said 'either be different or charge less'.

Jan 21, 2019 02:54 PM
Rainmaker
4,207,101
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Different strokes for different folks! Agents with experience and knowledge sell homes regardless of affiliation. People pick what they believe works for them. It does not change.

Jan 21, 2019 08:36 AM
Rainmaker
6,604,378
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Name recognition can be an advantage. It worked for me.

Jan 21, 2019 08:14 AM
Rainmaker
4,097,284
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Things change. Life is constantly evolving.  Sometimes quickly.  And it may occur at a snail's pace. Real estate is not different.  Is it?

Jan 21, 2019 08:12 AM
Rainmaker
888,597
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Interesting question.

Who would have thought GOOGLE would be a single source controller of the information we see?

Or that folks would use the Internet to get estimates for home repairs or remodeling.

Or even use Rocket Mortgage to get a loan approval.

RE will not shift into 'do it youself' but into a do it without the gobbley-gook' they all hate.

All of this is being driven by a common human trait. Real estate agents do it too.

Regarding your question - when the change happens the end result is unlikely to be a saving to the buyer or seller but what will change is how the pie is divided. Do you think they will open a soup kitchen on Pennsylvania Ave for real estate agents?

Jan 21, 2019 01:28 PM
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Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

As long as real estate exists, there will be professionals involved, otherwise it would already be a do-it-yourself majority with agents in the minority. Just my thoughts Richie.

 

Jan 21, 2019 06:31 PM
Rainmaker
1,919,284
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

My brokerage has been in the Atlanta area since the 1930's name recognition is a big factor. 

Jan 21, 2019 05:22 PM
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Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

An individual game, with the power of a big company with clout behind me.

Jan 21, 2019 03:26 PM
Rainmaker
563,429
Maria Sapio
Keller Williams of Central PA - Carlisle, PA
Real Estate Agent- Carlisle, PA. Mariasapio.com

An established brokerage with a recognizable name in the marketplace has already overcome a significant obstacle of name recognition - so that's one hurdle the agent doesn't need to jump over with a potential client - 

Jan 21, 2019 12:36 PM
Rainmaker
1,153,400
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

The bigger players thought they were great. Warren Buffet owns it.

Get him come show me homes.....  He does not even have a license.

Jan 21, 2019 11:02 AM
Rainmaker
514,124
Dan Tabit
Keller Williams Bellevue - Sammamish, WA

The public will always respond to the marketing in the atmosphere.  It will create issues that all agents will need to respond to. With the proliferation of competitive models, we all need to stay sharp, justify our value and fees and most importantly, be worth more than what we are paid.  It looks easy, and sometimes it's not hard, but knowledge, experience and skill have value. 

Jan 21, 2019 10:57 AM
Rainmaker
4,040,390
Richard Weeks
Dallas, TX
REALTOR®, Broker

They will lean towards the agent who gets in front of them

Jan 21, 2019 08:50 AM
Rainmaker
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Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

homeowner who are thinking about selling will lean toward those with name recognition....the majority of people want to do business with successful people....but there will always be some who think they are in a better financial situation if they go with a discount agent..... I like to list with those who are intelligent enough to think properly.... 

this is NOT a do it yourself (DIY) business....and those who think we have an easy job always learn the hard way....  

Jan 21, 2019 08:48 AM
Rainmaker
5,583,729
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Richie,

It really depends on each individual as to who they choose.  Personally, I prefer boutique companies over the big box companies.  Within the two I can find great agents...the difference is some of the big box are broker centric and some are agent centtric...I prefer those brokerages who understand that the agents are their market rather than the broker is first...Sort of like schools who have forgotten that the reason they exist is for the students, and not for their existence.  A

Jan 21, 2019 08:34 AM
Rainmaker
1,898,563
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Richie Alan Naggar as far as "the public" I think such a generality coupled with your question the answer would be Professionalism. BIG brokerages can not afford to go for niches but of course their agents can.

Jan 21, 2019 08:28 AM
Rainmaker
883,124
Peter Mohylsky. Broker -BRIX REALTY
Miramar Beach, Florida - Santa Rosa Beach, FL
BRIX REALTY -DESTIN

I don't have any concerns about the elephants taking over our business.  It is still a relationship based business and that will keep GOOD, EXPERIENCED AGENTS.  in business for a long time.  

Jan 21, 2019 08:11 AM
Rainmaker
1,707,423
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Business models are proliferating so the gene pool will be constantly diluting.

Jan 21, 2019 08:09 AM
Rainmaker
910,421
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I believe that most people will continue to need professional advice in order to make one of the biggest financial decisions of their lives as well as a decision that will affect their lives in many other ways.

Big broker or small broker, it is the aptitude of the individual agent that is the most important in providing what the buyer/seller needs.

Commissions will continue to be negotiable, of course. Efficiencies may impact commissions but I think that remains to be seen. The new real estate models that purport "disrupt" traditional real estate still are to new to prove their sustainability in all markets.

Jan 21, 2019 05:45 PM
Rainer
365,478
Andy Brown-Climer School of Real Estate
The Climer School of Real Estate - Orlando, FL
The Best Real Estate School in Florida

I think Real Estate is shifting based on consumers having access to much more information than ever before.

Jan 21, 2019 05:33 PM
Ambassador
4,256,027
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I am seeing more reduced commissions here for buyers - in fact, more than I've seen in the business - even during the recession. Times are changing and so must we, whether it's tweaking our services as an à la carte style representation or going to salaried positions.

Great information from Ryan Huggins - Thousand Oaks, CA

Jan 21, 2019 04:40 PM
Rainmaker
4,433,683
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

. I agree with Nina.

Jan 21, 2019 09:22 AM
Rainmaker
990,825
Doug Dawes
KW Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Real Estate is a relational business and a business of cycles. There will be changes but I believe the relational end will win out

Jan 22, 2019 07:06 AM
Ambassador
952,922
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

I started my independent Real Estate Brokerage 12 years ago. Just as I open the internet buzz was Agents, and Independent Brokerage was going to be gone and buried shortly. I am still here. As one suggested here the time frame is about 5-7 years out. I think and am planning on still being in business even then. I too belonged to several big box name brokerage. I did not see the difference in my income because of the affiliation. Sales are Sales; You go out and establish your brand. For my business, it took 20 years to figure I could do just as well working for my brand than working for someone else. 

Jan 22, 2019 06:24 AM
Rainer
220,344
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse specialist

In NYC, real estate is extremely complicated- and while technology will help to a degree- nothing is likely to change the role of the agent/broker in sales.  Rentals are far more likely to change- and I do see technology changing that sector as likely.  The rental environment is far easier- landlords do tend to prefer working with brokers rather than working direct with tenants as we are not only vetting the tenants, but we are also minimizing the administrative components for them. That admin part might be reduced as technology finds solutions- but not the vetting. As such, it could reduce the time it takes for agents to place most clients in rentals. For the high producing agents working in rentals (most agents in NYC) - I could see that eventually leading toward consolidation in the agent/broker community. Also, a proposal that was just raised in the last week is to cut commisions in rentals almost in half in order to make living here more affordable. Unfortunately, the proposal has no economic basis in reality. I believe the net effect of such actions- would actually send rents up as a result. In that scenario- while the commission percentage would be reduced, the landlords would be forced to increase rent because agents will demand to be compensated by them rather than by the tenant (which is common practice in NYC).

On the sales front, most of the apartments available for purchase are co-op's- which require a rigerous process for a buyer to be approved by the co-op board. Agents play a huge role in making sure a buyer is presented in the right way. I just submitted a co-op board package a few weeks ago - a building that does a hybrid of using technology to ease the process as well as physical copies of the board package- and I don't see technology changing this type of relationship so readily. The buyers board package was rather complex and it totaled nearly 850 pages detailing all of their finances as well as making the case as to why they would make a great addition to the building. Every buyer has a dramatically different story to tell.  Condos can't reject buyers the way that co-op's can- but they are asking for the same materials as co-op's because of the insanity of the court system. If a building has to foreclose on an owner for non-payment of common charges (similiar to an HOA in the rest of the nation) - it could take 5+ years to foreclose in the courts. Condos might not be able to reject buyers but they do need to understand their risk and brokers play a key part of that.  Redfin and other discount brokers come and go- but the extreme detailed nature and financial expertise required for this market means that there will be no do it yourself standard. Commissions won't be changing anytime soon here.

Feb 20, 2019 07:33 AM
Rainmaker
4,936,642
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I do think we will see some definite changes in the next five years.   Right now, my loyal clients still call me.

Jan 26, 2019 06:06 AM
Rainmaker
4,011,211
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

I always say it is my name that they hire not the company.

 

Jan 23, 2019 12:22 PM
Rainmaker
3,985,855
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Some want big box and others want a more personal level of representation

Jan 22, 2019 01:50 PM
Rainmaker
4,799,481
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

There are some that prefer the big name and some that do not.

Jan 22, 2019 08:51 AM
Rainmaker
2,641,352
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Doug Dawes ...lots of ponder in that meaty comment of yours thank you

Jan 22, 2019 07:10 AM