Reinventing the real estate industry
Editorial: A Roadmap to Recovery
By Inman News, Wednesday, November 19, 2008.
Editor's note: The U.S. housing market and the real estate industry are in critical condition and they need a roadmap to recovery. But first we must figure out where we should and must go. To help the industry understand that future, Inman News is embarking on a major editorial project to examine how the real estate industry should and will look in coming years. We are seeking more than your input -- we're looking for you to actively participate in mapping out the future of the real estate industry. Read on to find out how you can participate.
In 1996, Inman News called on the industry to create a more transparent real estate transaction. Specifically, we encouraged real estate leaders to fully leverage the Internet by putting the entire multiple listing service on the Web, open up other data sources, digitize the transaction, and add visual images like pictures and virtual tours to listings.
We spent more than a decade pounding on this message and reporting on the reaction, the progress, the controversy, the legal actions, the innovation, the fear and the hope. The job is not done, but substantial progress has been made. When it comes to placing home listings on the Web, the last couple of years look a lot like the fall of the Berlin Wall.
During this same period, the rapidly declining housing market has undergone the worst downturn in our lifetime. Nothing could be more important than covering these market trends, and they will continue to be our focus.
Nevertheless, Inman News is once again putting a stake in the ground about the future of real estate. We are undertaking this major editorial project to peer above the smoke and fire of the housing market battlefront and imagine what the industry and the market will look like into the future.
It is our belief and mantra that transparency is essential for creating a more vigorous, healthy and functioning market and a fundamentally better consumer real estate experience. We believe this will prove essential in rebuilding consumer trust with the industry and achieving a sustainable housing market recovery.
It also means a dramatic facelift for the industry. But the question is: What does it look like? We intend to find out.
Inman News will engage in a vigorous investigation of what the future holds for Realtors, mortgage lenders, the mortgage-backed securities industry, title companies, technology firms and the home-buying and home-selling public.
We will explore where the industry is going, how it will be organized, how it will be regulated and how it will become more transparent, so that both consumers and investors can trust in it and so that the industry has clear operating rules.
Some of our "Roadmap" coverage will focus on forecasts, insight and predictions about where the industry is headed. And while the future may be more unknown than known, there is a clear path being laid as we speak. New regulations are already being hammered out, new funding sources established, and new business practices tried. There are already glimmers of a newly organized real estate environment in which virtual wins over brick and mortar, clarity beats confusion, and responsibility and sensible underwriting trump greed.
The Inman News team -- including staff writers, columnists and contributions from you -- will focus relentlessly on this future in the months and years to come. We intend to offer you a peek into the future with ideas on what the industry will and should look like, and what you need to do to operate in this new environment.
We intend to concentrate on five major areas of coverage in this project:
Regulation: A new regulatory framework must be put in place around mortgage-back securities, their ratings and their packaging; around how loans are underwritten, explained and approved; around how mortgage brokers and Realtors are governed and are paid; and around the relationships between different parties such as title companies, builders, agents and lenders.
Technology: New innovations will lead the housing market out of its current mess. The Web brings transparency to the process through the publication of listings, the addition of related information, and through new applications. Core to this new future are better real estate analytics. The market desperately needs better information on the pricing and the sales trends in micro, regional and national markets.
Markets: The future of the housing market depends on stability, such as working off the excess inventory and boosting pent-up demand for borrowers who cannot get loans. How, when and where will the recovery take place? And what will lead us out of the current market doom?
Marketing: Real estate marketing is changing quickly and more so because of the down housing market. Advertisers are looking for more cost-effective marketing vehicles and online advertising will overwhelm the past dependency on print ads. Properties are taking longer to sell and there is a wide range of online destinations for consumers. Add to that the rise of social media and social networks that have opened up new advertising vehicles. The dependency on print ads is unquestionably over. But what the new form of online marketing looks like is evolving day by day. And the questions remain: What is working now? What will work in the future?
Business practices: Imagine brokers without offices, agents without brokers, and all real estate data accessible and available to all. New business models will emerge, new revenue streams will be uncovered and new partnerships will be tested. Also, relationships between brokers and agents, consumers, vendors and salespeople will change radically. Massive consolidation will dramatically change who leads the industry and who has market share. How and why?
These are just some of the questions that we are considering.
But we need your feedback and help. There are a variety of ways to participate:
1. Inman News is conducting two surveys: The Roadmap to Recovery survey focuses on broad changes that participants expect to see in the industry, and the second survey, Future of Real Estate Commissions, focuses on current trends and future expectations for real estate commission income. Surveys participants will enter a drawing for a $200 Amazon.com gift card.
Click here to participate in the Roadmap to Recovery survey.
And click here to participate in the Future of Real Estate Commissions survey.
2. Visit this Web page or download this PDF file, answer the 10 questions and send your responses back to future@inman.com by Dec. 31, 2008. Make sure you include your name, title, company and e-mail. We will be publishing these questions and answers over the next few months.
3. We are also calling for essays that focus the future of real estate. Write no more than 400 words on how to reinvent the real estate industry and revive the housing market. Pick a category -- brokers, agents, technology, title or lending -- or discuss the entire industry. Our editorial team will review the essays, publish many of them, and hand out a $500 check to the author of the best essay.
4. We are looking for video submissions that answer this question: If you were God, a king or the President, what would you do to fix the housing market? Start the video with "I would ..." and keep them brief (less than two minutes). The winning video will get two free passes to Real Estate Connect (valid for new registrations only) -- there is a Dec. 31, 2008, deadline for video submissions.
5. Participate in our FREE Town Hall Webinar on Dec. 10.
6. Participate in the following online Group discussions at the Inman.com Community section: Agent of the Future, Brokerage of the Future, The Future of the MLS, the Future of Real Estate Lending.
7. Join us at the Real Estate Connect conference in New York City from Jan. 7-9 -- the Roadmap to Recovery project will be a central theme.
Watch Inman News for more news and information related to the Roadmap to Recovery project.
***
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Submitted by Anne Hensel on November 19, 2008 - 5:43am.
Something is wrong with the system
can not download the 10 questions nor send in the essay
Anne Hensel
Broker, ABR, E-PRO, C-CREC, ASR, AHS, TRC, RECS
South Beaches Real Estate Professionals
727 409 8706 www.Southbeaches.info
Submitted by Robert A. Hulme on November 19, 2008 - 7:37am.
I really like your article and Roadmap to Recovery Project. I think that if more Realtors and other Real Estate participants became active in your forum here we will find a way to get out of the mess were in. Keep up the good work and you have my support.
Robert A. Hulme
Realtor, GRI, e-PRO
Prudential Utah Real Estate
robert@RobertHulme.com
www.UtahCountyRealEstate.us
www.UtahCountyHomes.ws
Blog : www.UtahHomes.ws
801-885-2586
Submitted by Joel Burslem on November 19, 2008 - 8:38am.
Hi Anne,
Our system was temporarily overloaded this morning when people were trying to download the file. It is working now, so please try it again.
thanks!
Joel
Submitted by William Metzker on November 19, 2008 - 8:59am.
The file still won't download. I get a timeout error message.
Submitted by Glenn Roberts Jr. on November 19, 2008 - 9:34am.
http://www.inman.com/reinventing
This Web site link replaces the PDF. Thanks for your patience! -Glenn
Submitted by Paul Francis, CRS on November 19, 2008 - 9:56am.
Quote --
"We spent more than a decade pounding on this message and reporting on the reaction, the progress, the controversy, the legal actions, the innovation, the fear and the hope. The job is not done, but substantial progress has been made. When it comes to placing home listings on the Web, the last couple of years look a lot like the fall of the Berlin Wall.
During this same period, the rapidly declining housing market has undergone the worst downturn in our lifetime."
End Quote --
So... It's all your fault. :)
Paul Francis, CRS
Prudential Americana Group
www.LasVegasRealEstateHome.com
www.LasVegasRealEstate4u.com
702.592.3058
Submitted by Anne Hensel on November 19, 2008 - 11:57am.
Thank you Inman, I think it is a great idea, and in the spirit of change maybe someone listens now
Anne Hensel
Broker, ABR, E-PRO, C-CREC, ASR, AHS, TRC, RECS
South Beaches Real Estate Professionals
727 409 8706 www.Southbeaches.info
Submitted by REALonomics .net on November 19, 2008 - 2:01pm.
Good move and long overdue. REALonomics supports the Inman effort as we too have been calling for transformation of our national structure, including the proper role of NAR, our business models and most importantly the transparent relationship we need with consumers.
The biggest challenge the industry faces with respect to "re-invention" is itself...us...our biases and historical entrenchments.
At REALonomics.net we dialogue with owners, agents and service providers and the vast majority are waiting for a turn around and a return to what they think is "normal."
The approach should be a "take-no-prisoners" and "no-sacred-cows" top-to-bottom analysis that covers every corner of our industry. The margin of error on the next go-around is razor thin, at
best.
Good job Inman!
www.REALonomics.net
Submitted by RK Ruthman on November 19, 2008 - 2:42pm.
Writing an essay, is a roadmap to recovery for competition.
"...imagine what the industry and the market will look like into the future."
I wouldn't write an essay if I were you...You know why? Because there are going to be companies wanting to read your ideas, and you will have just given them food for thought (for the possibility of $500).
I don't have to tell you there are vultures out there ready to pick the bones of the unfortunate. Has this dry-spell caused you to lose common sense?
The competition is either going to take your ideas and use them, or if your thoughts are contrary to their business belief try to keep your ideas from being implemented.
My advice to all you sweepstake loving, wish Publisher Clearing House would stop at my door kind of real estate professionals:
Look at what YOUR real estate future! If you got some good ideas....make those good things happen for YOU!
The future of real estate: Make the future your own.
"Check, please!"
Submitted by Peter J. Pike on November 19, 2008 - 3:25pm.
Unfortunately, RK Ruthman's comments only underscore the need for this industry to learn and understand how business is changing, and will be done in the future. People looking for real estate nowadays don't just mosey into their local realtor's office. They go on-line to look for themselves. And, they don't visit "pretty" websites that do not give them good, hard information (for free, and without having to give up information about who they are). The free transfer of knowledge is what business is coming down to, and the value that realtors add to a transaction is not going to be by keeping their methods secret. Rather, it is going to be by openly giving away a lot of information (such as available properties, help with understanding financing options, help with understanding how title closings and escrow works, etc.) and getting paid for assisting people through the entire process. Inman's attempts to begin a dialogue about what we see as the future is a great way for all to learn how this actually works (in theory and in reality).
Submitted by Michael Daly on November 19, 2008 - 6:26pm.
NICE!!!
Michael Daly
True North Realty Associates - A Hamptons Buyers Agency
The Hamptons Real Estate Blog
www.beachamptons.com
631 725 0554
Submitted by RK Ruthman on November 19, 2008 - 6:52pm.
Peter, thanks for the mention (sort of) ;)
I agree with most of what you are saying... if you want to level the playing field even more than it already is.
I am not saying don't inform your clients and customers of important factoids about a real estate transaction...
What I am saying is, if a professional has got wow-power in their back pocket, and they share it in an essay with competitors, ...the wow power is gone.
So, why give the cow away when you might be able to milk it.
The real estate future:
"Individual Intellectual Property"
I could go on and on...but that would be more of an essay, and less of a comment.
Best wishes to all and continued success.
Respectfully --- RK
Submitted by Ruthman Real Estate on November 19, 2008 - 7:24pm.
There must be a glitch with the site, because my post did not appear. Here it is as follows:
Submitted by RK Ruthman on November 19, 2008 - 7:52pm.
Peter, thanks for the mention (sort of) ;)
I agree with most of what you are saying... if you want to level the playing field even more than it already is.
I am not saying don't inform your clients and customers of important factoids about a real estate transaction...
What I am saying is, if a professional has got wow-power in their back pocket, and they share it in an essay with competitors, ...the wow power is gone.
So, why give the cow away when you might be able to milk it.
The real estate future:
"Individual Intellectual Property"
I could go on and on...but that would be more of an essay, and less of a comment.
Best wishes to all and continued success.
Respectfully --- RK
Submitted by Steve Gillespie on November 19, 2008 - 7:46pm.
Ruthman's rhetoric makes sense at a certain level; and if your plan is "the one", I'd like to know about it, in advance, also!
However, my feeling is this: Until "we" address the question of 'ethics through membership' vs. 'ethics through education and achievement', we will always have the public question our competence and value.
This issue needs to be addressed. It will be a major factor in determining the platform, direction, and future business model of the "Realtor".
I'm sure it's hard for NAR to 'just say no' to a million+ member revenue source, but we need to get serious about respecting this business if "we" want to be respected. It might be time to cull the herd with pre-licensure requirements; (or we'll just keep seeing “them” all again at the next market rebound)!
If you work hard to OBTAIN and maintain your license, you will most likely and very naturally adhere to the proposed ethical expectations.
We won't need ethical oversight; Agents will stay and go based on the principals of natural selection.
Bias hearings for code violations and arbitral matters will not be handled by the moderately informed, and the even less interested.
Ethics realized through hard work, (not assumed via dues or donations), will be recognized by our constituency and client base. At that point,we may begin to see options for a viable, profitable, sustainable direction. Otherwise our future may closely resemble that of the travel-agent.
Now that would put a dent in the old dues-dollars!
Submitted by Danilo Bogdanovic on November 20, 2008 - 12:33pm.
Great article and perfect timing! Was in the middle of writing a three part series on the same topic over at Agent Genius. Check it out http://agentgenius.com/?p=7340
Danilo Bogdanovic
Real Estate Consultant, Realtor
http://www.LoudounScene.com
http://www.LoudounForeclosures.com
Submitted by Deede Wockenfuss on November 21, 2008 - 5:46pm.
Deede Wockenfuss
CybrSold Concepts
A Frugal Virtual Real Estate Company
480-248-9500
http://www.CybrSold.Com
The main complaint we keep hearing from consumers is not how much service, knowledge or information we provide, but how much we are paid.
Those that know me may think I am a broken record, but the cost of the real estate transaction to the consumer must be reduced. We all hear it everyday.
So, how do we do this and still make a fair and reasonable living? Cutting out the bricks and mortar offices has been mentioned repeatedly. With all of the great technology available, and new and better stuff coming every day, we really should be able to do more of the real estate transaction right from our computer and chair.
Next, as long as 'the broker' continues to profit big time from the turnstile of agents in his office, change won't come. Identify exactly what a broker is needed for. Then a broker can customize himself/herself to be 'hired' by agents who need what they have to provide. This is a great way for the best brokers to rise to the top. The lousy ones, who profited 'just because', won't stay in business. Then, what about the need for us to do our part for the envirnoment? Are you a 'pop up' agent? When a buyer calls, do you 'pop up' and run to show him a house before you even get the needed information? Not only is this the picture of the agent we all DON'T want to be, it is a waste of gas, oil, and fumes! Do you still put paper flyers in the tube? WHY? What a waste of paper, toner and GAS. The real estate industry needs to do it's part for the environment, and in doing so will free up an incredible amount of our time. WE are the winners! There are lots of ways for us to save money and then be able to charge less, but provide more to our buyers and sellers. Personally, I think we can discuss it and not have our ideas 'stolen', because 99.9% of agents who go to a seminar and are told numerous secrets, leave and forget that they ever heard it. Only a very small percentage actually listen and then act. If we, in this group, are the small percentage, then tossing our ideas around may develop several viable models. I say, let's discuss!
Submitted by Dave "Utah Dave" Robison on March 18, 2009 - 7:57pm.
Yes transparency is key...but you got to have agents know what they are doing. New agents dont have supervising or advice even though they 'signed up with a broker.' The industry changes from the top...it will be brokers who model their brokerage and create economic pressures on other brokerages to change. The big guys have the biggest opportunity to do it but they wont because they are too scared. IT will come from below. You can follow some changes at http://www.utahdave.com or on my site http://www.kahunarainmaking.com Im searching for neighborhood specialists such as http://www.daybreakliving.com or I am searching for agents that will stand out. Where are you? We will build the new generation together.
Your Friend,
Utah Dave
Submitted by Johi Bond on March 19, 2009 - 1:20am.
Tight. Real Estate tech getting very clever this year, you know why right? It is getting real hard to close deals.
But lets say you need a welcome home ceremony, I would handle all money data and read it straight from Sharepoint Java correct tool.
Big city data is ain't no joke, if you gotta take it off - big integration should not be changed.
Submitted by Doug Francis on June 17, 2009 - 10:02am.
Although this post was written just seven months ago, it seems like the future came quickly.
Doug Francis
RE/MAX Presidential in Fairfax, Virginia
http://www.DougFrancis.com