The tech-driven “click-to-close” real estate vision has been talked about for decades now, but has remained just over the horizon of possibility.
The Rocket-Redfin-Mr. Cooper deal could change that. The combination of brand, tech, reach, and operational mastery between these three companies is powerful. AI will be an accelerant. Rocket CEO Varun Krisha is impressive.
But I’m keeping my wits about me. Anytime a big company articulates a bold vision it claims is better for The Consumer, you really have to think critically.
For example:
Redfin has existed independently for 20 years, pursuing, with great passion and earnestness, a mission to “Redefine real estate in the consumer’s favor.” But consumers did not validate this. Redfin had .76% national market share as of Q1 of this year, after 20 years, amazing tech, fabulous PR, and large-scale marketing campaigns.
Does Rocket have a record of giving borrowers significantly better rates than other lenders, consistently?
Mr. Cooper happens to be my mortgage servicer. I received this decidedly old-school piece from them a few months ago:
My point is not to trash these companies, or question Rocket’s sincere desire to do what they think is best for the consumer. But I do think in this time of rapid change and competing proclamations of consumer advocacy, it’s good to maintain a healthy skepticism.
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As long as I’m questioning things…
Do we really think it’s a good idea that home search and choosing an agent often happen hand-in-hand?
It’s like choosing a lawyer by grabbing one from a crowd hanging out in the courthouse hallway on the day of your court appearance. Maybe it works out, but the selection should probably be more deeply considered.
“Your listing your lead” proponents argue that listing agents should get all inquiries off their listings. But even if the agent actually responds, conflicts abound. Those who route inquiries off listings to buyer agents often do so without disclosing referral fees that lie beneath that hand-off. Both claim that their way is best for consumers.
But what if both ways are kind of crappy?
It seems to me that the best way to choose a person to help you with the most consequential transaction of your life probably isn’t to go with the one who happens to be on the other end of an inquiry form attached to a listing.
Of course, most people still choose an agent based on a personal referral (no referral fee involved!), but I think we need new ideas — both for home search and helping people find an agent. It’s been awhile.
About 15 years ago, a few brave souls launched agent finder applications based on MLS production data. The politics proved to be too daunting and they were turfed. HomeLight kept going in this vein, but their business model became confusing and the agent production data was gummed up with paid placement and, you guessed it, referral fees.
And reviews… well, every agent rated on Google, Yelp, etc. is a 5-star agent these days. Reputation, the ultimate differentiator, has been flattened online.
Feels to me like there’s an opportunity to take another run at home and agent search.
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In this week’s issue of The Dose, we wrote about the increase in humorous, frivolous, and/or self-consciously stupid social media shorts in real estate marketing.
It begs the question: Why would someone ever choose an agent who dances or tells dick jokes on TikTok or Instagram? Do surgeons or tax accountants do this?
My theory is two-fold.
Ridiculous marketing can sometimes work in real estate because many people don’t really know what a good agent is or does, specifically, and how important choosing a good one is. So they go with someone that grabs their attention, someone they “like,” or someone that didn’t detectably screw-over the family member or friend who recommends them.
I also believe that the contingent nature of agents’ compensation makes people less discerning than they otherwise might be. People aren’t staking their choice with an immediate payment. Same thing with personal injury attorneys, which is why they, like agents, find character-driven billboard advertising effective.
OK, that’s it. It’s Friday, so I think I’ll accept a beer, no questions asked.
Have a great weekend.
