Intetesting discussion. I wonder how much consideration Craig has given to the quality of the relationship between the servicer and the customer in his analysis. I suspect 17 touches with a customer a month by the mortgage servicer would not be indicative of a positive relationship.
Soooo many things to say about this but I'll keep it short.
1. Real Estate is NOT a relationship business. Interestingly, when you ask 10 agents what it means that real estate is a relationship business, you get ten different answers. Sorry...but not sorry. It's not a relationship business.
2. The real estate agent is 100% NOT central or the main person to a seller that is moving. Not even close and it's just stupid to think otherwise. The agent doesn't coordinate anything but the home sale, at the direction of the client. Does the agent control the attorney (hahahah...um...NO). Does the agent fill out the loan application, approve it, underwrite it and create the Fed Ref number at closing? No. Does the agent hire and coordinate the packing, moving company, transfer of furniture? No. Does the agent coordinate the transfer of utilities? No.
The agent doesn't do shit except put the house on the market (add it the MLS and 'negotiate' the offer). [Enter some stupid Realtor who thinks they earn what they make]
Anyone....a.n.y.o.n.e. single agent who thinks they are central to the real estate transaction is in for a rude awakening with AI entering the industry. Maybe, possibly, new laws might 'protect' the agent but no one knows what the new laws are going to be.
"But Steve....AI can't figure out the price of a home." Bullshit. It's happening now and it's relatively accurate...and only getting better. Besides, many agents SUCK (even Compass has to 'test' pricing, which translates into "I have no fucking clue what the price should be") at figuring price, evidenced by price reductions, long marketing times, expired listings...the list goes on.
Agents are losing their value EVERY.SINGLE.DAY....and probably 99% of Realtors have never even heard of, let alone describe what an AI agent is capable of. As Kevin Hart says, "You gonna learn today."
You were 100000% right Rob. 50,000 agents **can most certainly** handle 5 million transactions (absolutely) and not even work a full 40-hour week.
The new saying is AI won't replace agents, but it will replace those who aren't using AI. Well, I have another saying:
AI will replace 90% of agents because it will be more accurate, more responsive, more knowledgeable and handle infinitely more tasks and any individual agent can. (they will trust AI more than a person)
Finally, Rob: please, Please, PLEASE get a creator of AI Agents on your podcast. It will be an incredible interview.
The whole discussion went off the rails when Rob ignored Craig’s Rocket Mortgage value and frictionless transaction proposition for the consumer. Do you think the customer’s going to ignore a 30% reduction in their mortgage costs if they agree to use Rocket for realtor and mortgage origination and servicing?
And why are these two experts having this discussion while completely ignoring Charles Schwab and Fidelity, etc.? Their value proposition to their customer is “trust” delivered in a no cost frictionless curated information rich platform. If you don’t think this is relevant to the real estate industry today, then go back in time and read about the R.I.P. firms that hammered the value of the “human” relationship model like: A.G. Edwards & Sons Inc. Paine Webber, Jackson & Curtis, EF Hutton, Smith, Barney, etc.
Craig is 1000% right the consumer is the center of the transaction; everything else is a service to the consumer that competes on price. Anyone who has used a ChatGPT Pro subscription has a better, more frequent and more trusted relationship with AI at $20/month than they do with their realtor who pops up every 7 years demanding $20,000 to do a temporary admin job.
And if you think the realtor helps their customer accept the selling price of the house, you’re ignoring who it is that, more and more, really makes that decision, the lender’s AVM which can’t be argued with by ANY realtor. We are on the road to a future where lenders’ AI will tell you, in absolute terms ~ screw your opinion ~ what a house is worth. The lender (the entity that owns 80% of the house) is putting the real estate industry on the irrevocable path to a “no cost” frictionless world.
I don't believe we ignored it; doubt Craig would have let me simply ignore it.
The point was even with Rocket/Redfin's value and frictionless, there will be a human being (a Redfin agent, one assumes) who will be sent out to get the listing and/or assist the buyer.
I don't actually know if you disagree with where we ended up... do you?
Ultimately I don’t agree with where you ended up, except as it relates to the apparent challenge facing the industry in the next few years. Ultimately I’d guess that I agree with that unarticulated 10% where Craig said he didn’t agree with you, because I believe that’s the tiny light at the end of the tunnel that Craig can see and most cannot because they’re focusing on what’s happening now; not what’s ultimately not too far down the track….
As for your premise that the human cannot be replaced because of trust, I have to say I hope you’re right, but sadly, to get there, you must solve the fiduciary question. And you’ll never solve that question if the agent collects a commission. The commission is ultimately the poison pill in the trust relationship that agents aren’t likely to concede. Compensation must be disconnected from performance if you want to achieve a fiduciary relationship. The agent must be able to say “no” and still get paid otherwise their word is always suspect regardless of how well you “know” them. Watch Your Friends & Neighbors on Apple TV if you want to see an interesting depiction of the false facade of what passes as trusted relationships in today’s, the $ is god, world.
Intetesting discussion. I wonder how much consideration Craig has given to the quality of the relationship between the servicer and the customer in his analysis. I suspect 17 touches with a customer a month by the mortgage servicer would not be indicative of a positive relationship.
Soooo many things to say about this but I'll keep it short.
1. Real Estate is NOT a relationship business. Interestingly, when you ask 10 agents what it means that real estate is a relationship business, you get ten different answers. Sorry...but not sorry. It's not a relationship business.
2. The real estate agent is 100% NOT central or the main person to a seller that is moving. Not even close and it's just stupid to think otherwise. The agent doesn't coordinate anything but the home sale, at the direction of the client. Does the agent control the attorney (hahahah...um...NO). Does the agent fill out the loan application, approve it, underwrite it and create the Fed Ref number at closing? No. Does the agent hire and coordinate the packing, moving company, transfer of furniture? No. Does the agent coordinate the transfer of utilities? No.
The agent doesn't do shit except put the house on the market (add it the MLS and 'negotiate' the offer). [Enter some stupid Realtor who thinks they earn what they make]
Anyone....a.n.y.o.n.e. single agent who thinks they are central to the real estate transaction is in for a rude awakening with AI entering the industry. Maybe, possibly, new laws might 'protect' the agent but no one knows what the new laws are going to be.
"But Steve....AI can't figure out the price of a home." Bullshit. It's happening now and it's relatively accurate...and only getting better. Besides, many agents SUCK (even Compass has to 'test' pricing, which translates into "I have no fucking clue what the price should be") at figuring price, evidenced by price reductions, long marketing times, expired listings...the list goes on.
Agents are losing their value EVERY.SINGLE.DAY....and probably 99% of Realtors have never even heard of, let alone describe what an AI agent is capable of. As Kevin Hart says, "You gonna learn today."
You were 100000% right Rob. 50,000 agents **can most certainly** handle 5 million transactions (absolutely) and not even work a full 40-hour week.
The new saying is AI won't replace agents, but it will replace those who aren't using AI. Well, I have another saying:
AI will replace 90% of agents because it will be more accurate, more responsive, more knowledgeable and handle infinitely more tasks and any individual agent can. (they will trust AI more than a person)
Finally, Rob: please, Please, PLEASE get a creator of AI Agents on your podcast. It will be an incredible interview.
(yes, this is short)
Give me some names of AI Agent creators.
AI, the (next) lion coming over the hill...we will see
The whole discussion went off the rails when Rob ignored Craig’s Rocket Mortgage value and frictionless transaction proposition for the consumer. Do you think the customer’s going to ignore a 30% reduction in their mortgage costs if they agree to use Rocket for realtor and mortgage origination and servicing?
And why are these two experts having this discussion while completely ignoring Charles Schwab and Fidelity, etc.? Their value proposition to their customer is “trust” delivered in a no cost frictionless curated information rich platform. If you don’t think this is relevant to the real estate industry today, then go back in time and read about the R.I.P. firms that hammered the value of the “human” relationship model like: A.G. Edwards & Sons Inc. Paine Webber, Jackson & Curtis, EF Hutton, Smith, Barney, etc.
Craig is 1000% right the consumer is the center of the transaction; everything else is a service to the consumer that competes on price. Anyone who has used a ChatGPT Pro subscription has a better, more frequent and more trusted relationship with AI at $20/month than they do with their realtor who pops up every 7 years demanding $20,000 to do a temporary admin job.
And if you think the realtor helps their customer accept the selling price of the house, you’re ignoring who it is that, more and more, really makes that decision, the lender’s AVM which can’t be argued with by ANY realtor. We are on the road to a future where lenders’ AI will tell you, in absolute terms ~ screw your opinion ~ what a house is worth. The lender (the entity that owns 80% of the house) is putting the real estate industry on the irrevocable path to a “no cost” frictionless world.
I don't believe we ignored it; doubt Craig would have let me simply ignore it.
The point was even with Rocket/Redfin's value and frictionless, there will be a human being (a Redfin agent, one assumes) who will be sent out to get the listing and/or assist the buyer.
I don't actually know if you disagree with where we ended up... do you?
Ultimately I don’t agree with where you ended up, except as it relates to the apparent challenge facing the industry in the next few years. Ultimately I’d guess that I agree with that unarticulated 10% where Craig said he didn’t agree with you, because I believe that’s the tiny light at the end of the tunnel that Craig can see and most cannot because they’re focusing on what’s happening now; not what’s ultimately not too far down the track….
As for your premise that the human cannot be replaced because of trust, I have to say I hope you’re right, but sadly, to get there, you must solve the fiduciary question. And you’ll never solve that question if the agent collects a commission. The commission is ultimately the poison pill in the trust relationship that agents aren’t likely to concede. Compensation must be disconnected from performance if you want to achieve a fiduciary relationship. The agent must be able to say “no” and still get paid otherwise their word is always suspect regardless of how well you “know” them. Watch Your Friends & Neighbors on Apple TV if you want to see an interesting depiction of the false facade of what passes as trusted relationships in today’s, the $ is god, world.