How to Improve Real Estate

In the past two weeks we’ve sold our house and bought a new one. It’s kind of a dizzying experience as you literally swap thousands of dollars back and forth with each offer and counter-offer. We did manage to sell our house in 30 days in a very slow market, so I’m thankful.

But much like my recent reflections on online banking, the record industry and confrontational sales people, everybody else is wrong and I know it all. In this case, I think the real estate industry is broken. Maybe not broken (it did work for me) but missing out on a major opportunity.

Nowadays the house buying process is very Internet-driven. It used to be that real estate agents had all the access to listings and buyers couldn’t do much of anything without an agent. Now anyone can search listings online and find what they’re looking for without the help of an agent. We found our house without an agent (which isn’t to undermine the value of agents–there’s no way I’d buy or sell a house without my agent). The industry has made a drastic change–for the better. But it’s not drastic enough.

What Current House Listings Tell You
The online real estate listings tell you plenty about a house: the price, the number of bedrooms and bathrooms, the dimensions of most rooms, the square footage, the location (with a handy map), basic demographic stats about the neighborhood, a list of amenities, a description, photos (limited to 10), what type of heat and cooling the house has, when it was built, the current taxes, appliances that come with the house, etc.

They give you a ton of information. It’s enough information that you can search for what you’re looking for. You enter a location (and there are multiple ways to enter locations) your price range, how many bedrooms you want, how many bathrooms, ranges for square footage and year built (for those scared of pre-1950s homes), and even check boxes for amenities (so if a fireplace is a must-have you can only search for homes with a fireplace.

It’s a lot of information and lets you pick out which houses will work and which won’t.

What They Don’t Tell You
The problem is it’s not enough information. It’s basic info to tell you whether or not the house fits your basic needs. But it can’t do much more than that.

Is the den on the main floor actually a room with a door, or is it just a wide-open room off the kitchen? Makes a big difference if that den needs to be a private office. The listing won’t tell you. You’ll have to visit the house in-person to find out.

Is the office in the basemet actually an office or is it a glorified workroom with counters all the way around making it a completely useless office? The only way to know is to take the time to visit in person.

In the end you can trim down the thousands of house listings to a few dozen, but a few dozen is still a lot to get through. On a good day without Lexi in tow we could hit half-a-dozen houses. We probably went into at least 20-30 houses between agent showings and open houses. 80% of those we could have nixed with more information and saved some time and trouble.

Even our own house had 30+ groups wander through. A lot of them weren’t thrilled with the lack of closets (we have one in the entire house), something more online info could have helped.

What They Should Tell You
House listings should have more information than the buyer needs to know. Any truth in housing or pre-inspection reports should be available online. A potential buyer is going to find out eventually that your basement leaks, so let’s get that info out there. In addition to unlimited photos, we should also be able to see floor plans (a picture may be worth a thousand words, but it can also hide the furnace sitting in a corner of your family room–and yes, we did see that).

There should also be more than the vague marketing description, which is usually a bunch of real estate agent lingo designed to disguise problems and hype average features. With current listings you could certainly be honest in your description and say it’s a great little house with only one closet, but you’re going to be the only person in the market being honest. Sometimes it’s good to be different, but I don’t it helps to be that different.

To take an even more drastic step, real estate listings should have an element of social interaction. Let’s have comments! Let people complain about our lack of closets, and then as a seller I could respond with how it hasn’t been an issue for us. People could ask about our neighbors or what parking is like on the street. Buyers are going to find out anyway, so why not share the info. An open and honest seller would make buyers feel at ease. And that’s going to make it easier to sell the house.

Why It Would Work
Buying a house is a big scary process. The more information you have the better. And the more information you can get while sitting on your butt with a computer and not trapsing all over town (or across country), the better. More information would probably mean fewer showings and less interest in a house. That’s a scary concept. But it would also mean that the showings you do have are better prospects. They know we have only one closet and they still like the house. Buyers, sellers and agents all save time and money.

It would certainly cost more to put all of this together. Accurate floor plans probably don’t come that cheap. But again, it’s time saved all the way around. And time is money.

It also brings a level of openness, honesty and interaction that just doesn’t happen now. If I have a question about a house I ask my agent who calls the seller’s agent who calls the seller. What if I could just post that question on the seller’s listing? They can answer it (or ignore it) directly and we have a more authentic interaction. Makes spending hundreds of thousands of dollars a little easier.

Why It Won’t Work
People fear change. People fear interaction (I do). Massive industries resist change. It would also require sellers to put more work into selling their house (or a different kind of work). People would have to be willing to put in the effort honesty and interaction requires. And some people could certainly be dishonest. They already fudge room measurements (11×12, 8×10–same difference) how badly can they fudge floor plans or answers to questions (of course the truth will come out and then they’ll get burned with annoyed buyers who aren’t willing to offer as much and get mighty firm in negotiations).

Maybe, Just Maybe
But it could happen. It could work. If a few brave agents and their buyers realized the potential and started putting up single web sites to go along with listings (which some already do) it would be a start. It might catch on. It would spread.

I suppose if I believe in the idea that much I should have done it myself. But I came up with the idea after getting most of the way through the process, and at that point we already had plenty of interested buyers. That’s another thing, the market conditions come in to play. This is a solution for buyers and would be most beneficial in a buyer’s market. In a seller’s market, like the one we had three years ago when houses would sell in mere hours, this is all just too much work.

More information! The Internet offers virtually limitless information, so why put arbitrary limits on it? The same goes for anything you sell (drives me nuts that high-end keyboard trays listed online don’t provide any details about installation requirements–how deep/thick the desk needs to be, etc.). People crave info. The more the better (assuming it’s organized well). That’s my perspective anyway.

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