Is the Real Estate Industry Going to Be Different When We Recover From the Current Downturn?

It depends on who answers the question. Traditional real estate agents want to preserve the status quo; new entrants are trying to create a new game; and consumers want the best of both worlds: full service at discount prices. However, there is little doubt that the economic downturn is exacerbating the situation, but the reality is that it is only the tip of the iceberg. Prior to the downturn our industry was in the midst of a major transformation, as changes in consumer behavior and new technologies were driving innovations that we had not seen during the last 50 years. The truth is that consumer behavior impacts technology and technology impacts consumer behavior and as such cannot be ignored.
The economic downturn is going (and will continue) to impact consumer behavior. Our clients (and fellow neighbors) are experiencing the effects of the worst financial and economic crises since the depression of the '20s. The impact of these times upon our ways of thinking and behaving are impossible to determine, but a few patterns are emerging, among others:
1. Say goodbye to the equity-rich syndrome so prevalent a few years ago. Welcome equity preservation. Buyers and sellers will look at every single aspect of the process and seek ways to minimize transaction costs. Is the existing commission structure going to survive? It will not unless the role of the agent is changed. People are willing to pay for "value-added" support, but it will be up to the new breed of agents to convince the consumers.
2. Say goodbye to leveraging. Leveraging your life will no longer be possible as financing in every sense of the word will be available only to those who have the ability to serve the debt regardless of how low the rates are. How will this impact the number of agents? This translates into fewer agents, but those remaining will have a bigger slice of the pie.
3. Say goodbye to part-time agents. The days of part-time agents are gone, and this will benefit those individuals who are fully dedicated to the profession. This may be a good opportunity to raise entry barriers. Like in any profession, there are good agents and bad agents. However, it is too easy to obtain a real estate license, and traces of unethical behavior that are now found everywhere must be eliminated. This is the time to do it.
4. Welcome back savings. Saving will no longer be looked at as the exception, and people in general will have to work harder to earn less. The wounds of this economic downturn will be deep and will take time to heal. Living within your means will be the rule and not the exception. Consumers will be looking at every single economic and financial decision in their lives with a new set of glasses.
But in addition to the impact of the downturn on consumer behavior, the technologies around all aspects of our lives will continue to drive behavioral changes that will significantly impact the way real estate is transacted.
1. The Internet has leveled the playing field by making available to the consumer information and data previously controlled and limited by the agents. Consumers and agents will have equal access to the information, (which) will shift the control of the process to the consumers. Consumers will have instant access to property values and the tools to find the best deals in real estate.
2. The Internet will bring down transactional costs. Advances in technology and the ever-increasing sophistication of consumers are destined to change the way homes are bought and sold. Did the industry fail to recognize changes in the behavior and expectations of homeowners and investors? Today's consumers are tech-savvy, more independent, more sophisticated, more knowledgeable and want to be in control. They want to have choices. These choices will include but will not be limited to full service real estate, discount real estate and flat fee MLS options.
Almost every traditional brokerage house has a Web site that is mostly used to provide photographs and summarized property information. This is a step in the right direction, but not quite what the consumer wants.
Consumers want access to the same information and tools that professionals have. They want a buy-and-sell process that is easier, smarter, faster and cheaper. Consumers know that the Internet has made it possible to have access to information and resources that in the past only were available to professionals.
The Internet has also made it possible to provide these services at a fraction of the cost. Technology-based models are not a substitute for good judgment, but they are more efficient and transparent. These efficiencies result in lower cost of representation, and access to information and know-how that is completely unbiased and independent of the value of a property. Put another way, technology drives down the cost of representation.
The challenges in front of us are big and many. However, the future is as equally bright as the past. Those that understand the impact of the new technology on the consumer behavior will excel; others will fail, And do not blame it on the economy!
Mr. Iraola is a co founder and CEO of Homekeys.com a developer, integrator and provider of state of the art web-based information tools and services for the real estate industry.
Mr. Iraola currently serves on the Board of Directors of Central Hudson Energy Group Inc. (NYSE:CHG). He previuosly served on the Boards of Phelps Dodge Corporation , Southern Copper Co. and SWM.

What goes up must go down

According to the associated press December ended as the worse year for the real estate market in the South Florida in the last 3 decades.
Real estate is a local business and we need to be careful with "satistics". You simply cannot generalize. The glass is half empty for some and half full for others.
Homekeys offers real estate services in 67 Florida counties and what we see is different from County to County. If you travel through the tri-county area Dade, Broward and West Palm, you will see more for sale signs than ever before. but that is not the case in other Regions . It is a fact that the tri-county area has become one the most difficult places to sale a house. But like anything else, all that goes up must come down and that does not exempt real estate. We have been through similar difficult periods in prior decades and eventually the market will sort itself out.
Homekeys offers the widest range of choices and savings for buyers and sellers.
Call us for details

Selling Direct by Owner is Increasing in Popularity

Trying to differentiate one real estate company from another, could be a difficult task. They all seem to offer the same products, for a similar price. Web based companies are starting to break the mold. Perfect examples of it can be found at Homekeys. Their theory is to offer maximum exposure and complete service; all these for a low set fee. And this seems to be the trend that real estate is moving to. Sellers are realizing that paying 6% commission is too high for the amount of actual work that is put on a listing. Companies like Homekeys have recognized that issue and are aggressively marketing their “for sale direct” program. This means you get all the benefits of a realtor, plus all the exposure of a web based company for a ¼ of the realtor’s fee.
At the end of the day, what really matters is that your property is price properly and that it receives maximum exposure. And in today's environment you do not have to pay 6 plus % to sell your property.

Real Estate Bubble will redefine role of agent and there will be fewer agents

A Rising Tide Lifts All Ships...and nothing could be farther from the truth in real estate!

When real estate fever hit its peak sometime ago, it was almost impossible to go wrong, and all realtors looked like geniuses. This irrational market resulted in thousands of individuals joining the ranks of the real estate profession. After all, it was easy to get a license and- with limited effort- the economic reward was significant. We simply have too many agents!

While it is going to take sime time for the market to recover, we are beginning to witness some signs of consolidation. Many "part-time" agents that should had never been here to begin with are now disappearing. This offers a great opportunity to the many "full time professional agents" that have been fully committed to the industry to regain control of the process.

These agents do not complain about market difficulties. They continue to work hard serving their existing and prospective clients. And consumers will be able to tell who these agents are: they really know what is going on and share all information with their clients in an unbiased and transparent manner.

Being good isn’t easy. It’s hard work. The really good professional will look at each property individually and develop a strategy for a successful sale. It takes time, requires patience and calls for a creative approach. But it pays off when sellers and buyers begin to call you because they know you’re getting results.

And at the end of these cycle there will be fewer but better agents...agents that are tech savvy and whose role will be different...less driving around, more mousing around, more counseling !

Succesful Sellers Think like Buyers

The most succesful sellers are the ones that think and act like buyers.
This is what they do:

1. They search for homes that are for sale in their neighborhood in sites like http://www.homekeys.net/. This site provides listing details and free and unlimited access to comparables and most likely property market values. Maps are also included. These allow you to see the location of each property.
2. They drive around and identify those properties that appear to be comparable and assess the external condition and comparability of those properties. They also look around for FSBO properties. FSBO sellers are actively competing with properties listed in the MLS . Potential sellers can contact FSBO owners directly and inquiry about asking prices as well as other relevant factors.
3. They see their home thru the eyes of the buyers. We all believe what we have is better than what it actually is for others; thus, we need to be realistic. Value like beauty is in the eye of the beholder. Just because we like it does not mean the rest of the world will. How will a potential buyer react when visiting your home? Just think about your reaction when you are buying . And others will not be any different.!
4. They establish the asking price by incorporating all the information gathered during the fact finding process. What will I be competing against? What are my goals? Do I need to sale? If so, how quickly? Many of our clients decide to sell by owner and we assit them in the marketing of their property. The fact is that you can be effective selling on your own as long as you are realistic! There is not a need to sacrifice quality for service nor a need to pay a commission of 6%.
5. They are as factual and unbiased as they can be. They are good at removing the "emotional factor" from their decision. This is easier said than done but it must be done.

These are difficult times; be thoughful and honest in your process and you will be succesful.

Sell Direct with FSBO and Protect your Equity

It is difficult if not impossible to accurately predict where the market is heading. We, homeowners, cannot control the market but we certainly can do a better job in understanding what is going on so we can make "more intelligent and less emotional" decisions.
Here are a few lessons we learned from succesful for sale by owners :

1. Be realistic--- whatever happened 8 months ago does not longer reflect what is happening now. Those happy days for sellers are gone for at least for now; and nobody knows when these days are coming back.
   
   
2. Be aggressive and price to sell--- the supply is the highest in decades; thus you have a lot of competition. You need to understand not only what was sold "yesterday" but what is for sale today that is comparable to your property. Buyers have options and they will compare what you have to offer with other comparable alternatives. Be competitive and price your home at 5% below comparable listings. www.homekeys.net gives you free and unlimited access to all the information you need to price it right in several Florida counties including Miami-Dade, Broward, Palm Beach, Orange and Hillsborough.
   
   
3. Sell direct and save commissions--- in addition to pricing ( the obvious!), you need to reach as many potential buyers as possible. Recent surveys show that over 85% of the buyers find their properties in the Internet. Yes, over 85% of the people and the number is growing! How to maximize the EXPOSURE is critical. Visit our For Sale By Owner site or contact us at 1.888.333.9004.