Will Realtors go the way of the record labels?
Inman Community brief
By Inman News, Wednesday, October 29, 2008.Editor's note: The following is a reader comment on the Oct. 22 Inman News column, "Big brokerage model is 'on the roof.' "
"I come frm a background in the music industry. In the mid-90s consumers were demanding peer-to-peer, single-song business models. The six major record labels said "no way" to the consumer, cut out singles sales and tried to force the consumer to buy a full 10-song CD if they wanted a single song. Napster came along and destroyed the music business and forced it to reckon with consumer demand.
The NAR needs to come up with its own national, open version of the MLX [sic]. If not, someone will come along with the MLX [sic] version of iTunes (Zillow, Trulia to name a few) and really leave Realtors out of the home-buying equation.
Creating value to the consumer has always been a challenge for real estate agents. Time for the NAR to think outside the box unless it wants to become as irrevelant as the six (now three) major music labels are to the music industry." --Tony Diamante
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Submitted by James L on October 29, 2008 - 8:34am.
The profession does need to innovate, but the comparison to the music industry is like apples and oranges. It takes no special knowledge to buy music, there is no complex legal transaction involved, and the exchange between parties bears no similarities whatsoever. Listings on the MLS are open and available online already, which is a good thing. I don't know of any Realtors who see that as a threat to their business.
Submitted by Eric Bouler on October 29, 2008 - 10:42am.
There are plenty of great ideas in the market. Real Estate is local and should stay that way. Have fewer banks, fewer brokers and you begin to kill new ideas. National interests and ideas amy nt match the local markets as well as local people could.
As an agent we cannot use the MLS in our area as the large companies want it as an exclusive. Tech is moving fast and if given the chance we can be very inovative. Combine the MLS with agents ideas and you will beging to see some great ideas.
The ideas are on the way. Just do tax them to much while they are going to market.
Eric Bouler
Prudential Gardner
New Orleans,La.
www.neworleanscondotrends.com
www.ericbouler.com
Submitted by Jerry Mosher on October 29, 2008 - 11:11am.
Considering sites like trulia are monetizing by selling the leads to real estate agents I don't see them being a threat. And I completely agree with James. Unless agents start handing their clients a purchase agreement form and telling them to fill it out themselves... Agents provide a much greater value to a real estate transaction than just having a list of homes for sale.
Not to mention knowing the local market conditions. Yeah you can do the research online and get a good idea but that takes time and you still have to know where to find everything and how to analyze it.
Jerry Mosher
http://www.jerrymosher.com
Submitted by Diane Schubach on October 29, 2008 - 1:52pm.
I agree that a Realtor has local knowledge and all that, but does the public know that and how can we educate them? We ignore this trend at our peril. (I've heard record execs say they never saw it coming!) Being very new at this, I'm very interested to hear what experienced Realtors have to say.
Submitted by Fernando Herboso on October 29, 2008 - 1:54pm.
A Realtor will always be needed. . we just need to create our own niche of specialized services.
The big national companies wil not have th eresources to create teh local flavor of each particular city.
Besides. .
Real estate is a big step for anybody. .too personal. . a person to person guidance is always needed.
Fernando Herboso
http://www.ReallyNiceHomes.com
Maryland, DC & Virginia
Submitted by Joe Pryor on October 29, 2008 - 2:18pm.
I agree that the industry is due a shakeout, and there are many inefficiencies in it that does not benefit us or the client, but until Zillow and Trulia come up with a truly profitable business model i don't agree with the specific argument using the music industry as an example. I think a better analogy would be what happens to maturing industries. When Kmart created the hypermarket, the retail industry was composed of privately owned department stores like Neiman-Marcus. Target and Walmart followed and what you saw was the survivors were either huge or very specialty. The same goes for electronic stores, travel agents and on. Either you have economies of scale like can be provided with large franchises or high service targeted agencies. Also remember that one agent is now reponsible for their own business and even a franchise cannot make them successful. Like many I am waiting for the new business model since RE/MAX abd Keller-Williams have been the innovators and everything is is a variation on those themes.
Joe Pryor www.joepryor.com/blog
Submitted by Wayne Smith on October 29, 2008 - 2:22pm.
I agree that there will be changes in how we as Realtors conduct our business and how and where potential buyers and sellers will get market information. I disagree that the role of Agents will go away. They may change as time goes by but, like others that posted, the comparision of Real Estate Agents and Agency to the record industry is not a good one at all.
On the surface it may make a bit of sense but peel it back a little. For example, how does the record label get talent that they record? Are the majority of the recorded talent those that: a.) the record label found by sending representaiives out or receiving a demo tape in the mail or; b.)were approached by a talent agent who ran the gauntlet for the talent? I think a large percentage happen that way. The talent agent will shop the talent and try and get the best deal if they can get multiple interest. If not the best deal is the only one they get.
The role of the agent may change in the future as will the compensation structure as technology changes. I don't see attorneys negotiating a purchase price, or home sellers showing their home or a buyer pulling "comps" or attorneys doing that either.
I've looked at the zillow and trulia data bases and although they have improved and will continue to improve I find that their data is dated and/or inaccurate.
Wayne F. Smith
www.waynefsmith.com
Submitted by Therese Ryan on October 29, 2008 - 2:55pm.
Real Estate professionals have value that extends far beyond access to information in multiple listing services. In fact, for many years the consumer has had access to multiple listing service information, either through Real Estate professionals, or through third party sites. So why do they hire professionals?
The value of hiring a Real Estate professional is not lost on the most informed and educated consumers today. The value is in having a skilled, experienced professional to guide the consumer through the process, anticipate problems and solutions, negotiate on their behalf, network the consumer with other skilled professionals (ie. attorneys, home inspectors, contractors & others). Having a professional on your side with the skill to inform you of your obligations and your options, and to guide you in the myriad steps you need to take, in order to successfully achieve your goals, is a valuable tool that far supercedes finding out how many bedrooms and baths are in a property.
The way consumers access information may change as we move into the future, but the need for skilled guidance will not. We are pleased that so many consumers are so interested in real estate, and we are happy to share information with them as they dream about homeownership and as they put those dreams into motion.
Submitted by David Faudman on October 29, 2008 - 3:52pm.
It is ridiculous to compare the real estate industry to the record industry. Records are a commodity. Every house is unique with unique issues. That said, the question is not whether Realtors are valuable, but which Realtors are valuable. As information about homes for sale has become public domain, the value-add of a Realtor is in their advice, facilitation and connections. Unfortunately, the vast majority of real estate agents are not very impressive in their advice, skills and connections. What will ultimately happen is that most of these less talented agents will fail. The Realtors who remained will be truly valuable to their clients. Those who survive will end up with stronger businesses and greater income
David Faudman, CEO
CleanOffer, Inc.
http://blog.cleanoffer.com
Submitted by Jodi Summers on October 29, 2008 - 3:59pm.
The statistic I’d like to know is, what percentage of the people who got upside down in their loans worked with a realtor?
Best….
Jodi Summers
The SoCal Investment Real Estate Group
Sotheby’s International Realty
jodi@jodisummers.com
www.SoCalOfficeRealEstateBlog.com
www.SoCalMultiUnitRealEstateBlog.com
www.428hillst.jodisummers.com
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The best sermons are lived, not preached. - Cowboy Wisdom
Submitted by Larry Wright on October 29, 2008 - 5:38pm.
In a way, real estate has already gone the way of the record labels. The number of medium sized independent brokerages is dwindling fast. Over recent years I've observed many of them merge and or convert to franchise businesses. The small, leaner operating companies seem to be holding their own. REALTORS definately must adapt but I don't think they'll vanish to the same degree as music companies.
Larry Wright
www.nwrealty.com
www.nwrealty.net
Submitted by Glenn Berger on October 30, 2008 - 4:44am.
Speaking to 1000's of brokers and agents across the country, I find one comman variable to success, Innovation. Whether there is a national MLS or not, real estate professionals that use technology to keep ahead of their competition will find a way to flourish in either scenerio. Those that spend their time to complain about the market, and wait for things to get better on their own, may disappear from our great industry.
Glenn Berger
gberger@smarteragent.com
www.smarteragent.com
Submitted by Bill Fooks on October 30, 2008 - 6:21am.
Bill Fooks
TFT realty Marketing Service
Warwick, RI
I am not a good singer. I don't buy and nver have bought recorded items. So I left that area of expertise a long time ago.
But! We have never had anyone mail us a ck over the internet, or send us a credit card for a down payment.(Especially since they probably wouldn't qualify for a loan then).
I guess the musician should stay in his field of expertise, and we will stay in ours. However, if he would like to send a ck on one of our listings, I am open to receiving it. Never mid the pre-qual letter, a ck for the full ammount of the price will do.
Bill Fooks
fooksteam.com
Submitted by Sara MacLennan & Sheldon Johnston on October 30, 2008 - 7:16am.
@Tony
There are some record labels that survived the changes in the music industry, and there are some record labels that thrived with the changes. Perhaps there is a parallel there that we as real estate companies could learn from. Tony - since you're from the music industry, can you (or anyone) comment on some record labels that made smart decisions and what they were?
___________________________
Sara MacLennan
REALTOR®
Coldwell Banker Johnston
www.teamjohnston.com
www.EdmontonRealEstateBlog.com
Phone (780) 486 - 8655
Fax (780) 486 - 8654
Toll Free 1 888 EDM RELO
17803 Stony Plain Road, Edmonton, Alberta, T5