CHAOS IN REAL ESTATE--HOW DO YOU FEEL ABOUT IT???

By
Real Estate Agent with Douglas Elliman Real Estate 30HA0800896

CHAOS IN REAL ESTATE--HOW DO YOU FEEL ABOUT IT??? 

I started writing this post back in May and just now getting back to it to get it published...On the heels of PURPLE BRICKS closing their doors here in the US this past week, I can only say one thing: Maybe this is a "bell weather" of things to come!

Please make sure you comment here so we can all see what is happening elsewhere. Please let us know if you are affected?

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After reading John M. Giffen's Post in May, I had a little bit of a rant that I want to share with all of you--But please read his post here first:  THE ATTACK ON BUYER REPRESENTATION

It is critical that we begin to express our thoughts on these matters asap; we must not let this happen with just a murmur and a prayer!

The "takeover" of our profession is a major assault on an important segment of the nation's economy. Real estate represents one of the largest segments of the GDP and is the leading indicator on the stock exchanges in our country.

If these big technology companies are allowed to dictate how the buying and selling of real estate are done in most parts of this country, we will feel the negative effects for a very long time!

Homeowners won't know what hit them when they are left to be dealt with by the likes of these huge, national websites, run by technogeeks who have no intention to "serve" their clientele. I have heard that the firms who operate lead generating sites and who have the idea that they can "do deals" online (Open Door, and Zillow Offers, to name two) are claiming that this is the way of the future.

On the contrary; those of us who have been in the business for 20 years give or take a few years, have gone through a few downturns and we have cut our teeth on those times! We know what to do to make things happen and we know that we will survive if we just stick to it!

So, now it's up to the homeowners; how they choose to react to the marketplace when it is in such a bad place will be the determining factor in how we end up. Will we survive, become stronger and better at what we do? Or will we collapse in on our doubt and our inaction and let the takeover destroy the housing market--because that is what I see in the future.

A few reasons:

  • These companies  (Z, T, R and more) are only interested in gaining the most information (content) that can then be sold to the highest bidder--both in the process of building their giant, churning data machines into a valuable commodity that will be spit out at the end as they sell  these firms (as in EXPEDIA) for billions; perhaps trillions in the future.  
  • As non-licensed entities, these companies have no need to see to it that the public is served in a fair and ethical manner. They simply want to bring in the highest amount of money for the least commitment to those who want to buy or sell their home!
  • By undermining our all-ready fragile reputations, (Lining us up like a bunch of gargoyles on their website pages, or burying listing agent names at the very bottom of a full scroll on a listing) these firms are working double time now to see to it that class action lawsuits cripple the NAR and the brokerage communities who attempt to protect the rights and the interests of the buying public through buyer brokerage...Another issue that has crept into the public eye recently. 
  • The goal of these firms,  if we are to know the truth,  is to be able to freely collect information on personal property. It's much like a Google or Facebook who operate for the mere purpose of gathering as much personal information about people as they possibly can legally or illegally, and then to sell it like a commodity--with nothing required to keep this information private and to no restrictions to protect the privacy of their members. There is no value in that. The value is in the data!!

Below is my "rant" to John after reading his post. It will tell the story of what happened here in the Hamptons, in case you have missed the other posts on the matter. 

In my opinion, we are watching as a sea change takes place in the way real estate is perceived, bought and sold and that is taking the whole industry toward minimizing the importance of homeownership. Who needs the hassle and the huge taxes involved in being a homebuyer/owner anyway?

I would like to hear from others what you think about what is happening in real estate right now. I know other market places are feeling the slowdown; if you are feeling it,  please comment below. Are you feeling the effects of these internet platforms yet? If not, let us know that as well. All opinions are important right now.

"Hi, John__Am seeing this on Kathy Streibs "What I learned" post and it is uncanny how much in line we are in our thinking...of course if you read my posts I get very heated and maybe too passionate about what is happening to our profession. I see it as a real challenge to get other agents as fired up as I am--I truly believe that those large firms like Z and R are behind the lawsuits that are cropping up all over the nation against NAR and the buyer brokerage, etc...There is a reason I am so outspoken about all this--those "Disruptor's" who are taking us down as we speak here in the Hampton's!

Z is the one whos doing it here and they have done it by buying out the listing databases including our internal database;--I predict that the next thing that happens across the country are buy-outs like Z did here...May even include private MLSs. I believe they are setting up a model that can then be used across the country--a model of how Z owns the data--then they shut down the platforms we were using and they tell us (brokerages) to go whistle...I hear they are now calling our clients and buyers to sell them houses and mortgages--they have all the contact information from our internal database, which was part of another listing platform, HREO.com, now owned by Z.

What we have now is a "backdoor" portal to something they call "OutEast" and it is an unworkable listing platform that is populated with all the data that we worked so hard to gather, except we have no way to access it--all data is theirs now and we are on the outside looking in !... Top that off with a housing downturn here because of overpricing and new property taxes and tax laws--a perfect storm you might say!

There is no business--no buyers--or renters, for that matter (Renters because of AirB&B, VERBO, and STAYMARQUIS) This is a resort town and it is a small second home market that is in the throes of a crash bigger than the housing recession in 2009-10!

We are in big trouble and I suggested that we create a "cartel" of sorts--agents as outspoken as I am to lobby maybe to bring about the changes that are needed to protect the public, now that the licensed agent appears to be going extinct. We are licensed in order to protect the public from unfair and dubious practices--Sorry about the rant but I had to speak up. Thanks, John,  for your wonderful and informative post!"

 

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Rainmaker
2,515,712
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

I'm so glad that you finished this post which you began in May, Paula.  It is loaded with thought provoking ideas about the current chaos in real estate, as well as the future of our profession!

Jul 07, 2019 06:39 PM #1
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Myrl: Thanks for reading it! I had to get it out there before the old denial sets in...I find that more and more I am hearing things from authoritative voices that tell me we need to accept this thing that has happened here in the Hamptons. I am almost at the point of giving up on the resist Z thing and I don't want to lose my fervor if you know what I mean. I don't think it is too late--I think those of us who come from the place of having carved out this business the hard way stand a pretty good chance of surviving if we just stay with our instincts and stay the course as well...We will be fine, in the long run!

Jul 07, 2019 07:31 PM #2
Rainmaker
2,515,712
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

I have the same hopes that you do, Paula!  The newest shiny thing can sometimes work for them in the moment, but won't last longterm.  We'll need to wait and see. I've been licensed since 1981.  I've seen lots of changes, but as Barbara Todaro often states, good old fashioned marketing which has worked throughout the years has been the most reliable.

Jul 08, 2019 02:00 AM #3
Rainmaker
1,308,083
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Paula,
The time for circling the wagons may be long gone. The industry has allowed this infiltration and it's going to be hard, if not impossible, to stop... unless it's done on a legislative level in the name of protecting the consumer. 

Jul 08, 2019 06:57 AM #4
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Carol: I got a kick out of your term "Circling the Wagons" because that is exactly what was NEVER done. This is such a diversity of independent contractors that we have essentially and independently walked into the trap set by big tech firms. However, we have the grit and the stamina to prevail and we will in most cases--we just may not have brokerages to back us up and to handle the logistics that are essential to a good and honest real estate profession. The public is being harmed as we speak --there are class-action lawsuits galore by the buying and selling public. While the one firm, in particular, is being sued more than any other, they do manage to get away with it; probably by paying big $$ to the firms handling the suits. It is said that Z has a lobby that can't be stopped in their efforts. You are so right on the mark with your suggestion about legislation--but we need to get the states to wake up and see what the result of all of this infiltration by the big tech companies is doing to the public! That is why I will keep on talking about it, blogging about it and making sure that EVERYONE hears the back story of how this giant firm has done so much harm. That is why my whole approach is toward the consumer and how they are being hurt. Thanks for reading and for your valuable input.

Jul 08, 2019 07:33 AM #5
Ambassador
2,838,966
Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

Paula this subject has been talked about for years and I don't see that big tech is going away at anytime soon. The time for serious action was years ago and we all know who did absolutely squat to represent agents best interests and position in the market place. As for me, I go about my business as I always have, mostly referrals from agents and clients. I enjoy working with people I know, like and trust and vice versa.

Jul 08, 2019 10:22 AM #6
Rainmaker
3,794,468
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Paula Hathaway, REALTOR, LBA ,

I was glad to catch your post in Carol Williams Second Chance Saturday Series. This has been a topic discussed for years and action should have been  years ago but as usual the agents best interest was not addressed and here we sit.  I'm still actively representing sellers and buyers as my name is a household name in my area..clients want experienced agents and those that don't just weeds out those I don't want to work with. The future is unfolding and will be interesting to see the players left and how the transactions play-out.

Jul 14, 2019 05:57 AM #7
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Anna,

Old subject but a bigger problem than ever--and no one is taking responsibility for the harm that is being caused to the public. Homes are not getting rented or sold for that matter. Here, it is hard to go about our business. We have to work 3 databases and none of them work properly. Not only that, the public thinks the Hamptons is just a "Rat Hole" now; there have been huge problems created by outside brokerages (not really brokerages--just tech companies making you think they are licensed!) coming in and misleading the people who used to rent homes here for the wonderful resort environment. Now they get here and the house they rented is a "rat hole" as one person said--people are running from the area. The home prices that went sky high in '14, '15, '16, and '17 have not come down enough yet and sales are way off (-62% just in Southampton Village for the first quarter). No, this is not the same old, same old--this is new and it is coming to the rest of the nation soon!

Jul 14, 2019 12:39 PM #8
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Dorie,

Well, what is going on here is NOT the old news that people think it is. I just spent an hour going through a new website (One of about 5 new websites who are claiming the Hamptons as their "Local" area of expertise) that is run by who knows who; they opened an office down the street from our office and I hear they are NOT a brokerage. The Town has very strict time periods that someone can rent their home for. Two weeks at the very least because of the impact on lakes and estuaries, yet this website advertised "rooms for $250 to $10,000 a night". People are renting for a day or two as if every house is a hotel and it is killing the delicate waterways. There is a green scum from the nitrogen forming on all the still waters. Huge dump trucks have to come and scrape it up and take it away to dry so they can burn it. Sales are off so much that we don't know what is coming next--it could get worse. The person who used to seek out homeownership here is looking elsewhere because of the transient population who swoops down on this area and leaves heaps of garbage behind as they eat out of tubs of food on benches on the streets. They don't spend money here and that is destroying the retail business because they have spent their big bucks on an "expensive" room for a night or two, not designer clothes or expensive furniture. I could go on and on but suffice it to say, we are watching as the only people who still come here are the wealthy and they are here in short bursts, they stay at home and are not going to the expensive restaurants as they once did. The only reason they seem to come is to use the house they own here and that they can't sell because no one is buying!!!

Jul 14, 2019 12:57 PM #9
Rainmaker
1,071,546
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

Paula - I agree with everything you're saying. But I fear the train has left the station and we won't be able to bring it back. When money is involved, greed can take over.

Jul 14, 2019 03:20 PM #10
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Margaret: I do not agree at all; there is still time to at least recognize the problem..then and only then can one create the necessary alternative. In my opinion, there are too many agents nationwide just throwing up their hands and giving in to these predator-disruptors. They will suck the blood out of all agents if we just let them. It may be time for all agents to begin to think about disentangling themselves from brokerage; it may be what ends up happening anyway. Brokerages with big brick and mortar commitments are going to have to change simply to make way for these giant Digital Marketing Organizations (Joe Manausa's name for them). They are already negatively affecting how brokerages do business, at least here they are--and to me, that's all that matters to my business. I discovered that there were concessions being made to Z very early on, without the agents being privy to the details. All of a sudden, there was a giant sucking sound as this company, in April, pulled all of our tools, took them away like toys from children and said in so many words: "Here, try to do your joke of a business now, you amateurs!" And they shut us off! I hear it is happening elsewhere and you are lucky if you haven't had it happen to you yet! It will--and that is a guarantee! 

Jul 14, 2019 04:08 PM #11
Rainmaker
401,223
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

I am amazed that the largest trade organization in the U.S. REALTORS® is not actively engaged to protect the agents that make up the organization.

People do not in general like to get involved, but prefer to go the way they have always gone and hope that the problem will not touch them.

Thanks for keeping the issue before us.

Jul 20, 2019 07:03 AM #12
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi John:  I am amazed as I am hearing that NAR has been actively supplying ALL internet data that we supply to Realtor.com with Zillow and the likes of them. This means that what we go through as licensed agents (to protect the public, I might add!!) is a ruse. Why are we not being protected by the states? I think if we were to know the truth the organizations and MLS's are enjoying their pot of gold (membership dues) and can't admit it. In fact I have noticed that these organizations are going out well in advance of the date the dues are due to them and demanding that we pay up or we lose our use of MLS! I pay about $600 a year for what? They do nothing for us and they demand we pay them for that!! Thank you for your input, John!

Jul 20, 2019 09:35 AM #13
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Paula Hathaway, REALTOR, LBA

...The Most Informed Agent In The Hamptons!
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