Brad Inman says we need to improve the real estate transaction. He’s right. The only question I have is who the “we” is.
Here’s what I mean. Inman argues in “Why homesellers demand better than a shaky real estate labyrinth” that the growth of well-funded “we will buy your home for cash in three days” companies such as Opendoor point to a screaming need in the industry to simplify the real estate transaction.
He points out that a real estate transaction taking months to close is ridiculous in an era where you can pretty much buy anything you want in the world and have it at your front door tomorrow.
And he’s right, sort of. He’s identified the right problem, but he might not be addressing the right audience.
That is, Inman seems to take his argument as a challenge to “brokers and top agents.” And I agree with him that we’re not doing enough to make the transaction easier or better.
Certainly, if you look at the way brokers and agents have innovated over the past 20 years (i.e., the internet age), you won’t find us doing much to create systems that would improve the actual real estate transaction.
Why? Because all our innovation has gone into online lead generation. Think about it. Over the past 20 years, all the energy (and venture capital money) has gone into creating new bells and whistles on websites that are mostly designed to get people to click on the “find out more” button.
Now, we’re seeing even more energy (and venture capital money) going into how we can all get our conversion rate of those great leads up from, say, 1 percent to 3 percent — to justify 20 years worth of investments on driving eyeballs and clicks.
So we’ve got websites that are infinitely better now than they were 20 years ago: great pictures, video, 3-D walkthroughs, school info, walkability scores, bird’s-eye views and all that.
But the real estate transaction is basically where it was 20 years ago. Other than e-signatures, which even now are probably only used in a small percentage of transactions, we’re pushing deals the way they’ve always been done.
So I agree that the real estate industry of brokers and agents could be doing more to improve the average real estate transaction and the average consumer experience.
But here’s the problem: the worst pitfalls in the real estate transactional process have little to do with us.
I hate to pass the buck, but any agent in this country can get an accepted offer on a well-priced home within three days.
The problem is what comes next: the mortgage. The reason companies such as Opendoor can close a deal in three days is that they don’t need to go through the ridiculously cumbersome process of getting a mortgage.
And I guess they’re doing something to streamline the title process as well, because that’s another large mound of quicksand spread across the path to a quick closing.
So if the real delays in the real estate transaction come from mortgage and title, how do real estate brokers and agents change that?
Inman argues that we have huge leverage with our vendors to try to get them to improve the transaction, and maybe he’s right. I’m a little skeptical about how well even the biggest producer in town is going to do in trying to get, say, Wells Fargo to streamline its mortgage approval process.
But maybe a concerted effort by real estate brokers and agents to direct business to the lenders and title operators who make real efforts to streamline the transactional process would make a difference.
So everybody do this. Go take Inman’s article, forward it to your local lender of choice, and put a note on the email saying something like, “BRAD INMAN SAYS WE’RE ALL GOING TO GO OUT OF BUSINESS UNLESS YOU STOP SCREWING AROUND WITH YOUR LOANS.”
Yes, use the all caps. You want to create the image of you screaming.
Go, right now. Forward it. Or if your lender is particularly backward, print it, and find a fax machine somewhere. Kinkos, maybe.
But let’s try pointing the fingers at the people who can actually do something about it.
I mean, it’s about time that Inman’s periodic “we’re all going to die” warning reached the right ears.
Joe Rand is one of the managing partners of Better Homes and Gardens Real Estate – Rand Realty in New York and New Jersey and blogs about his local markets at the Rand Country Blog and about the industry at joerand.com.
