Loomio
Sat 2 Feb 2019

#RE2020 Roundtable: Why is this Supernova like no other supernova?

BW
Bill Wendel Public Seen by 163

FLASHBACK: After more than 20 years of trying to trying to reform the industry, 2014 began with a 1-2 punch real estate consumer advocates hoped would to be transformative. Headlines in Inman News warned about class-action law suits for pocket listings; and like a gift from heaven, the Wall Street Journal exposed why designated agency is a fraud.

Five years later, there is a class action suit against a designated agency, there are calls to ban dual agency, and BILLIONS are flowing into real estate startups. Last week, one of the leading real estate technology conferences began with a BANG -- Brad Inman likened the state of the industry to a supernova:

"An explosion of OLD ways; by people driven by GREED, not good.' He talked about turning the #RECartel pyramid upside down, and asked

"What if we could start over?'"

From the consumer's perspective, are those words more powerful than the 1-2 punch that hit real estate five years ago? How do they compare to the state of the industry ten years ago, when Barack Obama was being sworn into office and Real Estate Cafe hosted a real estate roundtable at Harvard's Berkman Center for Internet & Society?

http://bit.ly/RERoundTable_PostNYC2009

For more than two decades, Real Estate Cafe has hosted #RETech debriefings in Boston following major national events and we now the facilitate #BosRETech MeetUp.

What should we do this year to help real estate innovators in Boston who attended #ICNY19, as well as those who did not, assess whether this Supernova is really like no other?

PLEASE cast up to 5 votes on the poll in the right margin.

BW

Bill Wendel started a dot vote Sat 2 Feb 2019

VOTE: Best way to digest #ICNY, debate whether this Supernova is really like no other Closed Tue 5 Feb 2019

VOTE: What should we do this year to help real estate innovators in Boston who attended #ICNY19, as well as those who did not, assess whether this Supernova is really like no other?

Here are 10 options including room for you to suggest an Idea Starter. Each person can cast up to 5 votes to help #RE2020 innovators prioritize options.

Please share, any RETech innovator with this link can vote:

http://bit.ly/BosRETech_VoteICNY19

1 - 2/5/19: 6-8:30pm -- Open Project Night: Meet offline at ImpactHubBOS, 51 Milk St, downtown Boston. Invite others to join us virtually via Zoom.
1 - TBD: Need more time to digest my notes from ICNY, let's pick another date or week or 10 days from now (subject to weather delays).
0 - 2/7/19: 1pm StratChat -- Invite #REStartUps in Boston to meet somewhere, maybe Harvard's Smith Center or i-Lab to watch this webinar & sharpen our own business models post #ICNY.
1 - 2/8/19: 8:30am -- Meet w/ Sen. Cynthia Creem at Central Cafe in Newton to talk about her consumer data privacy bill proposed in Mass. and it's significance in the real estate ecosystem.
0 - Host a private debriefing in your office or with an elected representative.
0 - Participate in weekly conference calls to begin planning public information campaigns and educational events.
0 - Begin meeting again weekly at ImpactHubBOS, the co-working space in Boston's financial district, that offers a Community Membership for just $30 (assuming they've not raised prices).
1 - Alternatively, you can join Inman Select, and watch videos of the LIVESTREAM at your own pace.
2 - Forget the debriefing, let's just meet over coffee or beer -- #REonTap -- to discuss what happened, and decide what to do 2019.
1 - Other: Post your suggestion or Idea Starter in the comments below.
BW

Bill Wendel Sat 2 Feb 2019

1 - Other: Post your suggestion or Idea Starter in the comments below.
1 - Forget the debriefing, let's just meet over coffee or beer -- #REonTap -- to discuss what happened, and decide what to do 2019.
1 - 2/8/19: 8:30am -- Meet w/ Sen. Cynthia Creem at Central Cafe in Newton to talk about her consumer data privacy bill proposed in Mass. and it's significance in the real estate ecosystem.
1 - TBD: Need more time to digest my notes from ICNY, let's pick another date or week or 10 days from now (subject to weather delays).
1 - 2/5/19: 6-8:30pm -- Open Project Night: Meet offline at ImpactHubBOS, 51 Milk St, downtown Boston. Invite others to join us virtually via Zoom.
0 - Host a private debriefing in your office or with an elected representative.
0 - 2/7/19: 1pm StratChat -- Invite #REStartUps in Boston to meet somewhere, maybe Harvard's Smith Center or i-Lab to watch this webinar & sharpen our own business models post #ICNY.
0 - Alternatively, you can join Inman Select, and watch videos of the LIVESTREAM at your own pace.
0 - Begin meeting again weekly at ImpactHubBOS, the co-working space in Boston's financial district, that offers a Community Membership for just $30 (assuming they've not raised prices).
0 - Participate in weekly conference calls to begin planning public information campaigns and educational events.

Meet with the Mass. Office of Consumer Affairs & Attorney General's office about privacy issues and need for #REBillOfRights

T

Travis Tue 5 Feb 2019

1 - Alternatively, you can join Inman Select, and watch videos of the LIVESTREAM at your own pace.
1 - Forget the debriefing, let's just meet over coffee or beer -- #REonTap -- to discuss what happened, and decide what to do 2019.
0 - Participate in weekly conference calls to begin planning public information campaigns and educational events.
0 - Host a private debriefing in your office or with an elected representative.
0 - 2/8/19: 8:30am -- Meet w/ Sen. Cynthia Creem at Central Cafe in Newton to talk about her consumer data privacy bill proposed in Mass. and it's significance in the real estate ecosystem.
0 - 2/7/19: 1pm StratChat -- Invite #REStartUps in Boston to meet somewhere, maybe Harvard's Smith Center or i-Lab to watch this webinar & sharpen our own business models post #ICNY.
0 - TBD: Need more time to digest my notes from ICNY, let's pick another date or week or 10 days from now (subject to weather delays).
0 - Other: Post your suggestion or Idea Starter in the comments below.
0 - 2/5/19: 6-8:30pm -- Open Project Night: Meet offline at ImpactHubBOS, 51 Milk St, downtown Boston. Invite others to join us virtually via Zoom.
0 - Begin meeting again weekly at ImpactHubBOS, the co-working space in Boston's financial district, that offers a Community Membership for just $30 (assuming they've not raised prices).
T

Travis Sat 2 Feb 2019

The industry as we know it today is the result of 100 years of practioners maturing, evolving, and innovating. Much of it has been good, but all of it can be improved.

The word ‘cartel’ seems a bit heavy-handy to describe the industry. Bureaucratic is likely more appropriate. Many individuals and organizations have huge sunk costs and vested interests in the way things work now, and a tsunami disruption threatens them.

If there is a ‘cartel’ to watch, it will be the fraternity of investment banks, hedge funds, and a stock market waiting on any unicorn to emerge. Enough capital can change things and hopefully for the better. But the investments being made now are not due to altruistic concerns. It’s all about profit.

As Gordon Gecko said “greed is good”.

BW

Bill Wendel Sun 3 Feb 2019

Travis, Thanks for offering your perspective, particularly the potential threat -- to consumers, #RETech innovators, and #REStartUps --- in the last paragraph. To clarify, #RECartel is my shorthand, NOT a word Brad used. Consumer advocates, including Ralph Nader and the Consumer Federation of America, have described the industry as an informal cartel since 1991. That year, CFA estimated that consumers could $10B annually if the real estate commission was "uncoupled." Before the real estate market tanked a decade ago, there were 10 signs the bloated two-sided commission was at a tipping point (see link below).

Five years earlier, the founder of DeWolfe New England offered this perspective on their brief experimental model. When DeWolfe was purchased by NRT and morphed into Coldwell Banker, the experiment was shut down:

"Unbundled Pricing brings innovation to the cost of selling or buying a home. Selling a home requires a certain investment, as does finding and buying one: equal tasks with equal expense. Curiously, traditional commission models require the seller to pay for both of them. We believe it would be more logical if each paid for their own part of the transaction, so we treat them separately (emphasis added). We also use a scaled percentage model that reduces the rate for higher priced homes.

It is equitable, straightforward, honest, and revolutionary (emphasis added).

Source: A tipping point in the real estate revolution?
http://realestatecafe.com/2006423a-tipping-point-in-the-real-estate-revolution-html/

T

Travis Mon 4 Feb 2019

My research indicates that it currently costs some $300 Billion annually for the entire industry (as decentralized as it is) to facilitate the 5.3 Million home sales in 2018. Some might say that mortgage lenders are the fat cats in this $300 BN market, but real estate agents have a huge take of the revenues also.

Heavily financed disruptors can choose the space they think they can disrupt, but the 'disruption' is usually just a transfer of the existing revenues to another party.

Redfin takes a listing at 1%, so you could say that consumers are taking a piece of the market revenues (out of the $80 Billion + gross commissions). On the surface that appears to be a very good thing. And if the discount model sticks, it could force other players to reduce their commissions as well.

The Borrell report shows that mortgage lenders and real estate practitioners spend roughly $30 Billion on customer acquisition costs. So Zillow comes along and 'disrupts' the ad spend by redirecting $1Billion to its coffers. The inflated ad spend doesn't get smaller, it just gets redirected.

The iBuyers of the world serve a need for some sellers wanting peace of mind and certainty. But they must pay a premium for that convenience by transferring some of their equity (market value) to the iBuyer.

Many argue for a rapid consolidation of the MLS 'cartel' to as few as 1. The current model of the tri-part Associations and the MLS / Supra cabal cost Realtors close to $1 Billion annually.

So if the objective is the lower the cost of selling or buying real estate - by having real estate practitioners lower their commissions - find a way to lower their costs. I might attack three key areas:

  • MLS and Association consolidation and cut the total costs of membership fees by at least 50%

  • Decrease the over-capacity of real estate practitioners and mortgage lenders such that fewer agents can do more business. If the over-capacity is addressed, agents and lenders won't have to spend $30 Billion in order to rise above the fray and be more easily discovered by consumers.

Lastly, create interoperability standards and API's so that all software and technology systems can work together. There is an over-capacity of software solutions, most of which can't work with a competing solution: My CRM won't share with your CRM; My TMS can't track activities or assignments in your TMS; my FB Messenger won't message to your SMS messaging.

Bill, sorry for the rant, but these are some of the reasons why I'm advocating a Platform Marketplace for the industry. I'd like to make it easier for suppliers of products and services to find consumers of those products (and vice versa); lower the cost of customer acquisition for suppliers; and provide a more transparent and frictionless way for consumers and agents to find or get matched to the best products, at the best price, and with the best recommendations and ratings.

BW

Bill Wendel Mon 4 Feb 2019

No apology necessary as one man's rant is another's on ramp to the future!, Travis, you elevate this discussion and your vision has the potential to transform the industry. Can you and others cast a VOTE on the best way to debrief #ICNY & the #NAEBA -- National Association of Exclusive Buyer Agents -- annual conference last week?

http://bit.ly/BosRETech_VoteICNY19