Friday Flash: Eating real estate

Gary Keller’s “The Millionaire Real Estate Agent,” published in 2004, is the ur-text of the team story that continues to unfold in real estate.

Real estate agents building businesses-within-businesses was a thing before then, but what has taken place since is nothing short of a structural realignment of the broker/agent relationship.  

It’s not going to stop. 

I met with the manager of a large real estate office a few weeks ago, and what she said crystallized this for me.

To paraphrase:

I’ve had to deal with teams for years. But now, every new agent I talk to thinks they need to align with a team just to survive. There’s a sense that they can’t go it alone.  

We have reached an inflection point where the existence and perception of teams perpetuates more teams. This will continue to snowball. Teams will eat the industry.

Keller Williams’ growth is due in part to its philosophical and structural alignment with the team movement. Many other brokerages just “deal with” or “tolerate” teams. I think they’re going to need to figure out a way to recruit, embrace and profit from them.

I’m hearing a lot lately about how lenders’ push for purchase loans is hurting broker-affiliated mortgage companies. Lenders, particularly non-banks, are hustling to ramp up their marketing and advertising to consumers and agents. Brokerage capture rates on mortgage originations take a hit when this happens.

Brokers need to get better at marketing to their own agents. There’s a lot at stake.

Being-there-without-really-being-there keeps getting more real. Matterport released a more powerful camera this week and Facebook has announced that they will be pushing their own 360 cameras into the market.

I don’t think VR and immersive visual experiences themselves will upend the real estate business, but they will oil the gears of change.

Opendoor continues to scare the crap out of people.

If you don’t care about the inside baseball stuff, and just want to keep an eye on whether this company gets truly big with consumers, watch the fees.

Here’s how I see Opendoor right now in terms of the consumer proposition:

Faster? Check.

Better? Check.

Cheaper? Not even close.

With fees reportedly ranging from 9-12% on top of purchase prices that are generally lower than those arrived at through the open market, Opendoor is, for now, a play limited to people who value speed and ease above their bottom line.

These people have always existed. Preemptive offers have been a common thing in many markets for decades.

When and if the faster/better/cheaper trifecta comes in… well, that’s when things get interesting.

Opendoor has Big Brains, Big Money and Big Data working on the “cheaper” challenge.

Watch their progress closely.

Have a great weekend.