Real Estate is No Longer Local
Real Estate is local! It's a term that's been thrown around for decades, and in fact, there's been a lot of truth to it for a long time, because the reality is that different locales have HUGE differences in not only how things are done, but what things are done, and by whom.
Want some examples? In some areas everything is public water. In others, cisterns and individual wells (And the potential issues and liabilities they present) are the norm. In some areas of the country, transfer taxes are low and paid by a seller. In others, they can be several thousand dollars in additional buyer costs. Flood zones, municipal intricacies, and demographic pockets - all of these things vary tremendously from state to state, and even block to block within certain neighborhoods, so yes - real estate is local!
Or at least it was
To an extent, real estate is still local. But in many other ways, it's not. We live in a world of high tech communication where you can not only talk with someone 3000 miles away ,but SEE them, on demand, as if they're face to face. And we live in a world of increasingly available and accurate data. Those local transfer taxes? You can find them online, along with any special exemptions. Same with real estate taxes, and common practices from state to state and county to county. The internet, in many ways, has de-localized real estate.
You can buy a property today with relatively high confidence, SIGHT UNSEEN, and have a tremendous experience with a real estate agent you've never met. An agent I work with in Pennsylvania shared with me this past weekend that she's closed 3 sight unseen transactions in the past year! Whereas NOT being a local lender used to be a hindrance to growing a business, it's now seen as a plus, because cell phones aren't the only thing that's moving to a more mobile-centric platform. PEOPLE ARE, TOO! A recent transaction left me with a 5 star testimonial that highlighted "because we are out of town buyers it is a great advantage that John can provide mortgage services in different states and still maintain great customer service!". Did you read that? They didn't use me because of LOCATION. They used me because of SERVICE.
Now, part of that service is knowing the areas in which I work. That's not always easy, but 15 states in, I've learned that there are certain things I need to know about every market in which I work - customary transaction processes (who does, and pays for, what), the general cost of an area and typical transaction fees when it comes to taxes and any other area-specific intricacies (like the preponderance of HOAs on the west coast, the sky high real estate taxes and associated homestead exemptions in Texas, and the ridiculous transfer taxes of Delaware that builders try to stick buyers with, but only in certain areas!).
Real estate is, in fact, becoming less local. It was always local because only locals had local knowledge, but with more and more data becoming available and more uniformity coming into play in laws, documents, and processes, real estate is becoming less local. You don't need to be with an agent to see a home - you can facetime with them. You don't need to hand off documents or sign with pens - you can use esignatures and scan or take clear cell phone photos of nearly everything. You no longer need a "local" expert to tell you about the town - nearly every piece of data is available at a county level online, and it won't be long before it gets narrowed down even more locally, to neighborhoods.
The biggest piece of the equation, in my opinion, comes down to what most industry-relating things are coming down to - consumer experience. Consumers don't want to work with a local agent. They want to work with the best agent. If they're local, that's a bonus, but what people care about is availability, communication, transparency, and trust. That doesn't have to be found within the confines of a neighborhood, city, or even state.
In part, real estate is still local to an extent, but that isn't going to last - data and high level service will be more important than location in the future. In the mortgage world, we can already provide a much higher level experience than most "local" lenders can, thanks to our data platform, technology that allows us to share our screens and "meet" people over the phone and computer, and above all else, the level of knowledge and service that we provide.
The real estate industry won't be far behind.