The business of real estate bothers me. It bothers me quite a bit. From the first day of exposure to the business the agents are taught to be careful what they say. Don’t say this house is bad or that street is bad. Don’t say this school, the one with the barbed wire around the playground, isn’t a great school. Don’t say this and don’t say that. For a period of time, otherwise known as all of time before the internet, this was fine, and it made some sense. But today I think Zillow will tell you which schools are good based on actual metrics by which schools are measured, and if Zillow doesn’t then Google certainly will. And if Google doesn’t then the school will tell you. Williams Bay is number 133, I think I saw on their scrolling marquee. Maybe they said number one. All I know is my son is at Madison and that’s number 49, but his good friend is at Alabama which is 233. Information is everywhere.
The brokerage business feels threatened by the concept of an iBuyer. This is the sort of buyer that isn’t a person but is, instead, a company. I’ve written about this before, as I find it all quite fascinating. What has happened to the cutting edge of software and technology is that these publicly traded companies have become the new “I BUY HOUSES” sign stuck in the middle of a divided highway. They want to buy your house for a bit less than it’s worth so they can sell it for a bit more. This is what hundreds of years worth of housing evolution has produced. Online platforms to take the place of a handmade sign. For deep and terrible shame.
The reason that iBuyer platforms are somewhat popular amongst sellers is obvious. The seller gets a few dollars less than he might be able to get if he tests the market, but he avoids any downside of prolonged market exposure and is able to pick his exit date. In this, real estate becomes a more liquid endeavor, and sellers appreciate the ability to move quickly, albeit at a slight discount to potential market value. Never mind this model will never be able to work across all markets, as it only has a shot in markets with easily recognizable patters of valuation (think all of those garbage towns in the American Southwest with stone yards). Even so, it should be noted that sellers will indeed choose convenience over milking every last drop of value out of a home. Why, then, should the traditional real estate businesses be so afraid of engaging in their own form of iBuyer transaction?
That sort of transaction would be the off-market, direct deal. If a seller calls me to sell, that’s no different than the seller filing out some online form at zillow dot com. If I tell them the price I could obtain for them, that’s leaps and bounds more accurate than the number that zillow dot com’s algorithms can crank out. And if they tell me to sell the home for that number, or more, and I bring in a couple of buyers and one buys the home, how is this any different than a cutting edge, new-fangled iBuyer process? It isn’t, and so this old timey broker in Lake Geneva is doing just that. Sellers want to sell. Buyers want to buy. And I make a fee for helping both sides accomplish that.
This is much to the chagrin of the outdated business models that fuel the local MLS, but I really don’t care. The MLS is an antiquated relic of a long-gone era, and the sooner the local MLS’s die the better. It was cute when agents thought they could set up automated listing feeds for their buyers, as if that feed was special. Today buyers know about properties before most agents, and in the same timeline as the local MLS, as all of the real estate markets are syndicated to the national portals. The local MLS is silly, and it needs to go away, and the sooner it does the more efficient the listing process will be nationally, and the more transparent business of real estate inventory will become.
I sold a house on the south side of the lake yesterday. The seller called me in August to sell. I told him I could get him a price that was higher than his ultimate bottom line, and then I showed the home to a few of my buyers. One jumped and closed yesterday for $2,899,000. The seller paid less commission, endured far less hassle, and achieved his ultimate goal. Best of all, instead of dealing with some customer service rep in Phoenix, he dealt with me, which is generally more fun. A note of appreciation for this seller for allowing me to sell this vintage lakefront home, and a nod to the buyer for the great lakefront adventure that awaits. The only question now is whether or not I’ll throw this sale into the MLS so that the rest of the world will know what I know. Stay tuned.