Agents Can Keep Afloat Despite Disruption with eXp World Holdings’ (EXPI) Cloud Brokerage

A study completed at Oxford University in the U.K. (http://dtn.fm/X1kBb) on jobs that were most likely to be replaced by computerization placed real estate brokers at number 40 out of the 702 positions surveyed, with a 97 percent chance of losing out to computers. Digital technologies are disrupting many industries, particularly those whose raison d’être is the reduction of information asymmetries. Upstarts like Airbnb and Uber Technologies have revolutionized business paradigms, and the waves of disruption are already lapping on the shores of the real estate domain. The real estate industry will have to keep up or give up. With its Agent-Owned Cloud Brokerage, eXp World Holdings (OTCQB: EXPI) is offering brokers and agents the opportunity to keep up.

Disruption is the new buzzword, but it’s a reality as well. Now, homeowners can list a For Sale By Owner (FSBO) on ListingDoor, which Forbes has called the ‘Uber for Real Estate Sales’. If that is not alarming enough, the ListingDoor site proclaims that it has ‘Everything you need to sell and market your home FSBO, without the hassle of a real estate agent’. ListingDoor gives home sellers a complete market analysis with an Intel Report, which removes any information advantage a broker may have. A property owner is given a custom website to list his or her property. The best of the property can be highlighted in up to 24 images. He is provided with listing brochures and a colorful ‘For Sale’ yard sign printed and delivered next day by courier. In addition, the listing is syndicated to popular real estate sites such as Zillow (NASDAQ: Z), Yahoo! (NASDAQ: YHOO) Homes, and Trulia (NYSE: TRLA).

The revolution has not quite deposed real estate agents and brokers, however. A recent research report (http://dtn.fm/nW6aM) on eXp World Holdings, issued by Fundamental Research in April 2016, points out that, for most Americans, the purchase of a home involves the largest financial outlay. It also cites statistics published by the National Association of Realtors:

‘…approximately 87 percent of buyers recently purchased their home through a real estate agent or broker (up from 69 percent in 2001), 8 percent purchased directly from a builder or builder’s agent, and 5 percent directly from previous owners. In the case of sellers, approximately 89 percent of sellers used a real estate agent when selling their home. For-Sale-by-Owner (FSBO) sellers accounted for just 8 percent, and such properties are typically sold to someone the seller knows.’

The changing landscape offers not just threats, but opportunities, as well. There are many advantages to working with a real estate agent, as this Forbes article (http://dtn.fm/e7X0C) points out. First, don’t try this at home; selling or buying a property is not as easy as it looks on TV. It will take you time to track down the specific information you require, and, even then, information is not knowledge. Only experience will allow you to use that information wisely. Second, a middleman focuses the negotiation on the factors that matter. Direct contact between buyer and seller risks bringing personality issues to the forefront. A deal can fall apart because the buyer doesn’t like the seller, even though he likes the house, or because the seller can’t bear the thought of his home falling into the hands of ‘someone like that’.

Thirdly, how up-to-speed are you on the legal issues? These can be notoriously arcane. Wouldn’t it be better to let a professional handle them? Fourthly, in a one-on-one deal, the maxim caveat emptor applies, whereas agents and brokers must follow regulatory guidelines and rules when conducting business. It’s possible, depending on state law, that a fiduciary relationship may arise, which means that the agent or broker is bound to put your interests ahead of his or her own. Fifth, for the buyer, monetary costs may go down before the sale but go up after the sale. The greatest danger for the lone ranger is not knowing what he does not know.

The Agent-Owned Cloud Brokerage offered by eXp World Holdings’ wholly-owned subsidiary, eXp Realty, is a full service national real estate brokerage platform. Its cloud-based format reduces the costs associated with operating a brick-and-mortar office, yet, through a 3-D environment, provides all the services offered by traditional brokerages. In addition, agents can draw on services that include training and education, coaching and mentoring, and transaction and technical support. eXp Realty has already added over 1,100 agents and brokers operating in 40 states and Canada to its platform.

For more information, visit the company’s website at http://investors.exprealty.com

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