Andrew Wetzel's Musings

March 20, 2019

IECs: Skimming the Surface of Real Estate

Filed under: Buying,Ethics,Hiring an agent,Selling — awetzel @ 5:01 PM

As a REALTOR and a Real Estate instructor, I often use analogies to explain consumer behavior.  My thoughts and conversations often involve trying to explain how to relate Real Estate to the Internet.

The Internet (specifically the so-called “third-party sites” we all know) started posting Real Estate listings which made the typical consumer’s life easier as far as their accessing active listings, asking prices and property features.  The Internet continued to evolve by “engaging” agents and other housing-related enterprises/ affiliates willing to pay for “leads” (access to the online visitors).  The Real Estate community freely provided more and more property listing information (we thought it to be FREE marketing which evolved into something we simply had to do) which lured more consumer eyeballs leading to more agents/ affiliates investing in the Internet to gain access to the people behind the eyeballs.  It was almost a perfect, symbiotic system:  consumers got easy access to a variety of information (even if inaccurate, misleading or incomplete), marketers (including agents) had a cost-effective way to generate potential business and selling Real Estate got easier (it sure beats spending money on newspaper ads and wasting time in “Open Houses”).  However, buyer agents quickly faced more competition as the Internet distracted consumers who used to rely on them for everything.

Like all things in life, the Internet of Real Estate evolved, at times in ways quite unexpected. Consumers started to use the Internet to START THE PROCESS (getting financing is a perfect example) rather than as an added tool.  Instead of coming to an agent asking how to buy or sell, many consumers came to us with houses they needed us to access or when they decided to put their property in the MLS.  Business models were developed that made some of those activities less dependent on agents and they continue to evolve.

The Internet, while great in so many ways, has become a great big distraction for many. There are no rules or regulations to make sure that a consumer is making a wise choice by relying on it. Too many are “surfing” or skimming the surface and NOT “going deep” with what they find on the Internet.  They pick up on many superficial aspects of buying and selling without really embracing all of the details including the human aspect of the business.  I describe Real Estate as a “people business revolving around sales with all of the dynamics you might expect when two or more people are trying to negotiate an outcome acceptable to everyone involved”.  It is also like playing poker:  everyone wants to know what the other person is thinking. The Internet was viewed by many as the great EQUALIZER.  While true initially and perhaps somewhat true today, I think it has just become another business model owned and operated by people seeking profit.  While there is nothing wrong with that, the consumer needs to look deeper than the surface when evaluating what they find.  Many consumers spend weeks online before contacting an agent only to find that they may have better spent the time preparing to buy or sell a house.

The Internet Empowered Consumer (or IEC.  Everything needs an acronym!) has 24/7 access to DATA and INFORMATION but they generally lack the KNOWLEDGE and INSIGHT that an experienced REALTOR brings to the process.  Anyone can look at houses (perhaps evaluating them as far as pluses and minuses to see what best suits their needs) and decide which they would like to own.  Anyone can put a sign on a lawn, advertise/ promote/ expose their house to the market and start the selling process.  WHAT HAPPENS NEXT?

Real Estate is NOT rocket science and many can do well with “limited agent” involvement.  How many do well with “no agent” involvement?  There is a balance in there somewhere and, to paraphrase Harry Callaghan, a consumer has to “know their limitations”.  Lawyers are there to get you out of a jam once you realize you have one.  Relationships with REALTORS are best when we can advise, guide and direct from the start.  We have the training, knowledge and experience that you cannot find or acquire shopping for Real Estate online.  There is so much more to buying a house than identifying properties to consider.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

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