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Friday, March 03, 2006

Disruptive Factors in Real Estate--& Elsewhere

We're in the process of buying a house (and selling our old one). Throughout it all, I could not help but recognize that the whole game is changing. Or perhaps it has already changed. In my estimation, during the period when we were looking for our new home, the best properties were not the homes listed by real estate agencies. The most desirable homes were "For Sale By Owner."

There is another channel in our market called "Assist 2 Sell." It seems to be gaining popularity and momentum. Maybe you've seen it in your city or marketplace. The Assist 2 Sell package is a fixed-price bundle of services. You pay something like $2,950 and the Assist 2 Sell team helps you promote your home--web, signs, etc. Their team will also hold an open house and conduct showings for you. If you need more services, there's another price for the upgrade bundle, which you can elect to purchase. While we did not go this route to list our house, it does seem to be appealing to an increasing number of sellers here in the Charleston, West Virgina market.

Whether it's the power of the Internet and e-mail, or some combination of economic factors, the old guard seems to be losing market share to these new, disruptive ventures like Assist 2 Sell. Moreover, it appears that the For Sale By Owner (FSBO)method is cutting into the listing market in a major way, right now. Maybe we've all been influenced by E-Bay. Perphaps we believe we can sell anything by ourselves?

Let's see ... limited service packages and self-service are gaining market share in real estate. Hmmm. That is not grossly different from what's going on in some of the Internet services markets, too. Self publishing. Point and click Website design. A plug-and-chug company logo with the intellectual property services bundled. Don't forget about the travel market. How many of us go and sit down in front of a travel agent nowadays? What about Saturn ... and some of the more progressive car companies? Low-pressure sales reps in Dockers and golf shirts, merely demonstrating the product, not pushing it. They don't do much more than make a copy of the driver's license and toss the keys to the prospective buyer.

All in all, I think that the fixed-price, limited-service offering is an intriguing combination. The times they are "a-changing." Maybe its time for the role of the real estate agency and Realtors to change, too. About a year ago we told a top real-estate client that they should create a spin-off company, not unlike Assist 2 Sell, and compete with themselves to maintain market share. At the time it seemed like a forward-reaching strategy. Today it seems to make all of the sense in the world.

Kudos to the disruptors in the marketplace. They truly are marketing geniuses!

3 Comments:

Blogger Boston-Real-Estate-Watch said...

Just came across your blog. You made some intersting points. But the real test will be when the market slows down. It is easy to sell when it is a hot market but here in Boston more and more people are coming back the traditional broker to sell their homes.

I'm all for saving my clients money and I have tried the a-la-carte services but it all seems to come back to the old fashion method.Only time will tell.

Boston Condos

10:29 AM

 
Anonymous Anonymous said...

Nice post and we agree that there is change coming. Models like Assist 2 Sell, Help U Sell and some FSBO sites like For Sale by Owner Center are providing real estate services at deep discounts or even free. The biggest change is getting consumers to feel confident in their abilities. You right the Ebay, Craigslist and the internet in general is making indiviuals explore other options and once home buyers understand that they are paying 2-3% in the purchase price for the service of their REALTOR, they will begin going direct to either the listing service or directly to owner.

6:26 PM

 
Blogger HomePriceMaps.com said...

www.HomePriceMaps.com integrates how much homes SOLD for nationwide using the google mapping technology. Simply select city and state from the city menu and click search. If you don't see data for your area simply email HomePriceMaps@gmail.com with your zipcode and or address and they'll update the site with your info and email you within a few days.

12:44 PM

 

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