A
study completed at Oxford University in the U.K. (http://dtn.fm/X1kBb) on jobs
that were most likely to be replaced by computerization placed real estate
brokers at number 40 out of the 702 positions surveyed, with a 97 percent
chance of losing out to computers. Digital technologies are disrupting many
industries, particularly those whose raison d’être is the reduction of
information asymmetries. Upstarts like Airbnb and Uber Technologies have
revolutionized business paradigms, and the waves of disruption are already
lapping on the shores of the real estate domain. The real estate industry will
have to keep up or give up. With its Agent-Owned Cloud Brokerage, eXp World
Holdings (OTCQB: EXPI) is offering brokers and agents the opportunity to keep
up.
Disruption
is the new buzzword, but it’s a reality as well. Now, homeowners can list a For
Sale By Owner (FSBO) on ListingDoor, which Forbes has called the ‘Uber for Real
Estate Sales’. If that is not alarming enough, the ListingDoor site proclaims
that it has ‘Everything you need to sell and market your home FSBO, without the
hassle of a real estate agent’. ListingDoor gives home sellers a complete
market analysis with an Intel Report, which removes any information advantage a
broker may have. A property owner is given a custom website to list his or her
property. The best of the property can be highlighted in up to 24 images. He is
provided with listing brochures and a colorful ‘For Sale’ yard sign printed and
delivered next day by courier. In addition, the listing is syndicated to
popular real estate sites such as Zillow (NASDAQ: Z), Yahoo! (NASDAQ: YHOO)
Homes, and Trulia (NYSE: TRLA).
The
revolution has not quite deposed real estate agents and brokers, however. A
recent research report (http://dtn.fm/nW6aM) on eXp World Holdings, issued by
Fundamental Research in April 2016, points out that, for most Americans, the
purchase of a home involves the largest financial outlay. It also cites
statistics published by the National Association of Realtors:
‘…approximately
87 percent of buyers recently purchased their home through a real estate agent
or broker (up from 69 percent in 2001), 8 percent purchased directly from a
builder or builder’s agent, and 5 percent directly from previous owners. In the
case of sellers, approximately 89 percent of sellers used a real estate agent
when selling their home. For-Sale-by-Owner (FSBO) sellers accounted for just 8
percent, and such properties are typically sold to someone the seller knows.’
The
changing landscape offers not just threats, but opportunities, as well. There
are many advantages to working with a real estate agent, as this Forbes article
(http://dtn.fm/e7X0C) points out. First, don’t try this at home; selling or
buying a property is not as easy as it looks on TV. It will take you time to
track down the specific information you require, and, even then, information is
not knowledge. Only experience will allow you to use that information wisely.
Second, a middleman focuses the negotiation on the factors that matter. Direct
contact between buyer and seller risks bringing personality issues to the
forefront. A deal can fall apart because the buyer doesn’t like the seller,
even though he likes the house, or because the seller can’t bear the thought of
his home falling into the hands of ‘someone like that’.
Thirdly,
how up-to-speed are you on the legal issues? These can be notoriously arcane.
Wouldn’t it be better to let a professional handle them? Fourthly, in a
one-on-one deal, the maxim caveat emptor applies, whereas agents and brokers
must follow regulatory guidelines and rules when conducting business. It’s
possible, depending on state law, that a fiduciary relationship may arise,
which means that the agent or broker is bound to put your interests ahead of
his or her own. Fifth, for the buyer, monetary costs may go down before the
sale but go up after the sale. The greatest danger for the lone ranger is not
knowing what he does not know.
The
Agent-Owned Cloud Brokerage offered by eXp World Holdings’ wholly-owned
subsidiary, eXp Realty, is a full service national real estate brokerage
platform. Its cloud-based format reduces the costs associated with operating a
brick-and-mortar office, yet, through a 3-D environment, provides all the
services offered by traditional brokerages. In addition, agents can draw on
services that include training and education, coaching and mentoring, and
transaction and technical support. eXp Realty has already added over 1,100
agents and brokers operating in 40 states and Canada to its platform.
For
more information, visit the company’s website at http://investors.exprealty.com
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
