The psychology involved in the real estate process is tremendous. There is a number one international best seller (first cognitive psychology book to become a best seller) called Influence, by Robert Cialdini. One of the principles is Commitment and Consistency.
You touched on this in your video. Agents are independent contractors and already have relationships with other service providers (home inspectors, attorneys, lenders, etc.). Homeowners also have relationships with service providers ("my brother's wife is a real estate attorney).
It's extremely difficult to overcome C&C with established relationships...even when money and financial gain is involved.
Years ago, I offered to list a property for free for a FSBO. The seller turned me down because his friend was in real estate and was struggling. Even though I would have saved him (at the time) about $7,000, he went with his friend.
The businesses that are trying to create an umbrella of services will face the 80/20 (or 70/30...etc.) rule. 80% of real estate agents already have a network of professionals they refer their clients to. The remaining 20% 'might' see what/who their company recommends.
The financial incentives have little to no effect for the agent.
If there is an in-house mortgage company, the loan officer has to create the relationship with all of the agents as if it was not in house.
Unless there is enough differentiation (cost, service, etc) then it's going to be very difficult to be successful in the end-to-end platform.
I agree with the WIIFM philosophy. As a boomer I want more control of who I am working with, I look for best rates, experience, etc., whereas it seems the newer byer wants the easiest/fastest way. However, if it isn't truly easy (one contact handling the entire process) or faster, they won't buy into it. You're right, the guy that comes up with the best process in the fastest time, for the best rate, wins. That undoubtedly will cut the independent contractor. The end-to-end companies would need absolute control of all fees to make it work. Didn't Sears or Walmart try the in-store one-stop shop for a minute?
Rob, you hit on the core issue when you differentiated between provider based aggregation onto a common platform and consumer based aggregation of access to resources on a common platform.
As a consumer an "end-to-end" platform would be a secure platform where I could evaluate properties based on criteria I input, then evaluate various lender options, then evaluate and contract with a buyer consultant (agent/attorney) and finally evaluate and select the closing processor that best suits my requirements.
That's a platform I would be willing to pay a fee to have as a resource because it puts me in control of a situation about which I have little pre-knowledge.
As you and others have pointed out, buying a home is a complex and intimidating process. Having an objective, platform based, resource that combines education with a method for reviewing and evaluating options without sales pressure each step of the process would have value. Especially to a first time buyer.
Relying on friends and family for advice is risky. Today it seems to be the default.
All the platform options you described remind me of auto dealers and their "closers" that try to convince the buyer to add-on their insurance, extended warranty and other "options". The single motivation is more cash flow and increased margin. That is not a customer benefit. It's a seller benefit.
The psychology involved in the real estate process is tremendous. There is a number one international best seller (first cognitive psychology book to become a best seller) called Influence, by Robert Cialdini. One of the principles is Commitment and Consistency.
You touched on this in your video. Agents are independent contractors and already have relationships with other service providers (home inspectors, attorneys, lenders, etc.). Homeowners also have relationships with service providers ("my brother's wife is a real estate attorney).
It's extremely difficult to overcome C&C with established relationships...even when money and financial gain is involved.
Years ago, I offered to list a property for free for a FSBO. The seller turned me down because his friend was in real estate and was struggling. Even though I would have saved him (at the time) about $7,000, he went with his friend.
The businesses that are trying to create an umbrella of services will face the 80/20 (or 70/30...etc.) rule. 80% of real estate agents already have a network of professionals they refer their clients to. The remaining 20% 'might' see what/who their company recommends.
The financial incentives have little to no effect for the agent.
If there is an in-house mortgage company, the loan officer has to create the relationship with all of the agents as if it was not in house.
Unless there is enough differentiation (cost, service, etc) then it's going to be very difficult to be successful in the end-to-end platform.
I agree with the WIIFM philosophy. As a boomer I want more control of who I am working with, I look for best rates, experience, etc., whereas it seems the newer byer wants the easiest/fastest way. However, if it isn't truly easy (one contact handling the entire process) or faster, they won't buy into it. You're right, the guy that comes up with the best process in the fastest time, for the best rate, wins. That undoubtedly will cut the independent contractor. The end-to-end companies would need absolute control of all fees to make it work. Didn't Sears or Walmart try the in-store one-stop shop for a minute?
Rob, you hit on the core issue when you differentiated between provider based aggregation onto a common platform and consumer based aggregation of access to resources on a common platform.
As a consumer an "end-to-end" platform would be a secure platform where I could evaluate properties based on criteria I input, then evaluate various lender options, then evaluate and contract with a buyer consultant (agent/attorney) and finally evaluate and select the closing processor that best suits my requirements.
That's a platform I would be willing to pay a fee to have as a resource because it puts me in control of a situation about which I have little pre-knowledge.
As you and others have pointed out, buying a home is a complex and intimidating process. Having an objective, platform based, resource that combines education with a method for reviewing and evaluating options without sales pressure each step of the process would have value. Especially to a first time buyer.
Relying on friends and family for advice is risky. Today it seems to be the default.
All the platform options you described remind me of auto dealers and their "closers" that try to convince the buyer to add-on their insurance, extended warranty and other "options". The single motivation is more cash flow and increased margin. That is not a customer benefit. It's a seller benefit.