Editor’s Note: Tomorrow Transformed explores innovative approaches and opportunities available in business and society through technology.
Buying a home used to mean hiring a licensed real estate agent and visiting place after place, until you found the one you liked. These days, thanks to the Internet, buyers can browse real estate listings whenever and wherever they want. But even with technology, red tape and hidden costs abound.
Now, internet-based realtor Square Feet has a service that could help home vendors to save money.
List your home with a traditional agent in the United States and you pay a 6% commission. Do it yourself with Square Feet on your smart phone and you’ll pay only 1%. On a $500,000 home, that’s a $25,000 saving.
“We have streamlined the process substantially,” says James Simpson, Square Feet’s co-founder and CEO.
“You as the seller would download the app and it’s a very simple process. We start the process having you take pictures of your home, and once you’re finished it takes five or six minutes to create a listing.
“It’s just going to be cleaner, simpler and faster.”
Simpson, a former full service broker himself, remembers the moment he started thinking about the online model.
“I was in a listing appointment with a very successful guy who had a very valuable property – we’re talking about $15-17 million as a listing price – and he said to me directly, ‘does it really cost a million dollars to sell this property?’ And I kind of flinched a little and was like, ‘geez, that’s a lot of money!’”
Simpson says he’s not trying to replace traditional brokers – he just wants to give people choices. “We’re just trying to give the consumer an option. Real estate sales is a service industry and to not offer the consumer multiple choices of service, seems a little silly.
“We’re really anticipating a big shift when the millennials become the primary home consumer … they are so used to doing things a certain way through the Internet. They’ve grown up with the Internet – it’s just part of their daily life.”
The question for the future is whether people really will want to do it themselves.
Dottie Herman is president and CEO of New York real estate company Douglas Elliman. “For most people, it’s the largest investment they make in their life,” she says. “People will pay for a service that they feel is a benefit to them. And to me, would I look for the cheapest doctor when I was having surgery? I don’t think so.”
Technology may not put the broker out of business but it will let us decide whether or not we need one.