Financial

Real Estate

There are so many improvements needed in the Real Estate industry. Unfortunately, with so many people “having their hands in your pockets” (e.g., Real Estate Agents, Real Estate Brokerage Firm, Mortgage Loan Agent, Servicing Company, Appraisers, Title Companies), there is significant resistance to any change. This resistance brings us where we are today where a home can sell for $500,000 and the Agents take $30,000 of the top then a significant amount of origination and closing fees are charge. While the mortgage industry is a portion of the problem, I have discussed solutions here, this part of the website will address the large remainder of the problems and propose solutions for each.

Problem: Real Estate Agents and Selling Process

For a large portion of the home sales, a Real Estate Agent merely makes the process of selling a home more difficult and expensive. While there are certain buyers that could use their help (e.g., out of state buyers, buyers with physical limitations), a large majority would be better off by selling their property on their own.

Solution: More tools for Sellers

There needs to be an expansion of the “for sale by owner” tools to allow for the sellers to manage the sale on their own. Tools such as :

  • Web Portal / Smartphone App for:
    • Photos of property. These should have standard photos so that it is simple for the seller to know which photos to take.
    • Virtual walk through of the property as well as generate a “doll house” view of the interior.
    • Scheduling functionality for showings
  • Creation of Auction style for selling property. By allowing an auction style format, the Seller can maintain the decision if they want to sell or not at the achieved price. More importantly, it allows for a price to be reached based on market forces instead of a Real Estate Agent suggesting the seller accept the offer. Too many times I have heard that multiple people were interested in the property and the seller could have got an increased selling price if the other buyers could have known what the market was up to. By creating this format buyers could also set a time limit to their offer, protecting their interests.
  • Creation of database containing all information about property (e.g., County Records, Home Builder, Power, Gas, Sewer, Year Built, Year Remodeled, and more). This database would ideally be managed by Fannie Mae or Freddie Mac as they are the holders of the mortgages and so have the most interest in accurate information. This database would be the basis for the property listing
  • Legal work needs to be done to allow for properties listed “for sale by owner” to be posted on MLS
  • Electronic document generator for offer and acceptance of offer

Results:

The results of these changes will continue the trend of more sellers using “for sale by owner”. This will then allow a restructure of the real estate industry and by natural economic forces drive additional improvement not yet possible.

Can you help this idea become a reality? If so, please email me here: chris@crossett.net

Thanks