Can Websites Replace Real Estate Agents?

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Permalink Reply by Realtor® Anna Nisperos on October 7, 2009 at 9:36am

That may be true for the United Kingdom because of the extreamly high cost of purchasing an already overpriced home there. The UK's Estate Agents charge a huge commission and the Mortgage Companies have put inerest rates and qualifying requirements out of site.

I don't think we will see this at all in the Philippines. Interested Filipino buyers do search the internet more, but it is still the Brokers that provide the listings on their web sites and do all the viewings and documents, etc. Brokers just have to adapt to this new trend and use it to their advantage.

Anna

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Permalink Reply by Mike on October 7, 2009 at 10:14am

Hi Anna,

Do you think Filipino brokers are using technology effectively? What benefits and services do we really offer to the consumers that they cannot do themselves especially if they are even more technology savvy than a lot of brokers?

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Permalink Reply by Realtor® Anna Nisperos on October 7, 2009 at 11:19am

The newer and younger Brokers are probably more adept at using the internet and and all its' possibilities. However, most of us have realized that in order to be successful, we have to adapt to the changes. I am constantly trying to use the internet to my advantage and it is starting to reap the benefits.

Brokers cannot be totally replaced by the internet. The majority of buyers here need a broker to show them the property, negotiate and do all the legal documents required. Closeings in the Philippines are still in the hands of the Brokers, not like in the US where you need lawyers and all the legal stuff.

Anna

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Permalink Reply by Mike on October 7, 2009 at 12:04pm

Showing properties can be done by the seller and buyer without an agent. Posting and advertising properties on the web can also be done by the property owners themselves.

When you say "doing" all the legal documents, are Filipino brokers practicing law without the proper training and license? As a buyer or seller, won't you prefer a competent lawyer handle the legal stuff for you?

Real estate professionals should offer "TRUE" value by protecting the consumers, providing valuable and truthful information (not hype and sales pitch), pushing for more transparency and disclosures, abiding by the rules and putting our clients' interest first before the commission.

If we keep dreaming that somehow buyers and sellers cannot handle the real estate transaction without a middleman, then we brokers deserve to be out of business.

As a real estate professional, what services do you think that offer real value? Perhaps we can give specifics and real scenarios.

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Permalink Reply by Odilon (Ody) dela Merced on October 7, 2009 at 8:02pm

Hello,

This is just my opinion on this issue.

In a near perfect world sellers would be totally honest, devoid of emotional attachments to the property and would price their homes fairly by researching in the neighborhood recent comparative sales and would be knowledgeable about basic financial accounting on how to price their homes. Sellers would show not only the advantages of buying their properties compared to others but also the disadvantages. Otherwise, buyers would not unreasonably find the appraisers' fees excessive and would hire a consultant when necessary.

In a near perfect world there would be no fake title of a property and that the registry of deeds could never ever become part of a fake titling syndicate.

In a near perfect world, nobody would be needed to advise clients that a particular developer in the past had delayed project completion, or completed projects that fell short of quality standards or worse, not delivered a committed project at all.

In a near perfect world if they wish, buyers by easily pushing some buttons can access records of recent sales in the neighborhood just to check if the sellers have not missed some information.

In a near perfect world, buyers would always have the luxury of time to window shop enabling them to make a complete list of options and to narrow them down according to their criteria of a good buy. This goes without saying that all the sellers and buyers know sufficiently well how to use and have access to the internet.

In a near perfect world, lawyers would not be charging excessively for the simple task of reviewing the contracts of sale to ensure that the interests of their clients are amply protected. Buyers would also have the luxury of time to go through the process of "transferring" the title of the property to their names because the government agencies are very efficient and effective that they do not waste the time of the buyers. Oh yes, government officials would also be so upright that they would not accept bribes just to hasten the process though this I admit is beside the point.

So you see, in a near perfect world we would not need brokers nor agents or as you Mike say "middlemen".

The question is ...would technology be able to create such a near perfect world? If we had the best, affordable and efficient internet system would we be able to achieve that kind of world?

The bottom line however, is we are nowhere nor shall we ever be near this near perfect world.

We are all just humans subject to 1) limits of our free time and competence; 2) frailties and weaknesses that we need to have a system of check and balance (in real estate, I see the real estate agent part of this system that will make both parties aware of complete and right information for early agreement of sale); and 3) temptations to take advantage of others in its criminal sense which I believe also goes against the eighth and the tenth commandments.

No amount of technology can change the nature of man. It can make the process of a sale easier but it cannot delimit the human heart and make a sale as fair as possible.

A broker or an agent is a professional, a facilitator, a trusted counsel and a friend. If he or she seizes to be so, then that is when we can say we don't need an agent or a broker in real estate.

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Permalink Reply by Mike on October 8, 2009 at 6:03am

Very well said Odilon. Your opinion shows that the Philippine real estate industry is full of risks, corruption, deceit, misrepresentation and incompetence.

It sounds like our survival depends on a corrupt and dysfuntional system. This also leads me to believe that as a broker, I too need to be corrupt to compete. It is also implying that as a consumer, I too need to be ready to play along or get burned. What kind of an environment is that?

Here's I think are some effective ways to address some issues:

1. Create a public database of agents, brokers, sellers and developers which shows their sales production, projects completed, license status, pending litigations, citations, disciplinary actions, performance ratings and reviews.

2. Require mandatory disclosures from agents, brokers, sellers and developers of property defects and natural and environmental hazards (flood, fire, health, nuisances, earthquake, crime, code violations, etc.)

3. Require all sales transactions to be immediately recorded for public information. This include transfer of ownerships, liens, encumbrances, property information, agents and brokers involved in the transaction, etc.

4. Require an enforceable home warranty in writing that protects buyers. If we buy a new car or a new toaster, a manufacturer's warranty goes along with it. Why don't we require it on a house?

5. Require title insurance to protect consumers from fraud

6. Require clear and upfront disclosures of agency relationships, broker duties, sales commissions and fees. This include who does what, who pays what, who gets paid and how much.

7. Encourage the optional use of competent professionals (neutral 3rd party closing agents, property inspectors, surveyors, engineers, lawyers, etc.) in every transaction. Let the consumers decide if they want to waive or pay for this option.

Like you said, technology cannot do it alone but your opinion clearly shows that we really need to use it.

Sunshine is a good disinfectant. Let's push for real transparency not just to protect our clients but to protect ourselves. If what we offer are mainly showing and advertising properties, then we are simply acting as middlemen only going after the sales commission.

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Permalink Reply by Odilon (Ody) dela Merced on October 9, 2009 at 11:20pm

Very well said too Mike.

I may have misled you to think that I was referring to brokers and agents as the ones that have time and competency limitations although in some cases, it may be true, but I was referring to buyers and property owners.

Take my case, almost all owners of my listings are based abroad. How would they be able to physically show their properties to buyers by themselves? To buy a pre-selling project that are already heavily marketed on line, why do they need to ask help from brokers? Because they need to have a second opinion from trusted professionals aside from the fact that they need someone they trust to take care of documentation.

Another is your impression that brokers have to be corrupt to be able to survive in the Philippines. If you are in general brokerage, you may have to only if your clients could not wait for the normally slow processing time (deliberately I think) for the retitling to take effect. For others, they focus on development project selling and leave the title transferring work to developers.

Sad to hear but that is how it just really work here. I know of some exceptions like in most places (at least from my experience) in western visayas.

My impression is that the Americans had the same sad experience on anomalies and corruption which led them to innovate by means of title insurance. I don't see any reason why title insurance can't work here. It only needs one highly profitable huge company in the insurance industry to invest in such undertaking.

Regarding all the musts you enumerated, that might work with pressure from the citizenry through their representatives in congress.

Gauging from the length of time for Philippine elections to be computerized (we will finally have one come May 2010), then you can roughly estimate how long it would take for computerized data management to take hold as you enumerated. Election automation was a result of active citizenry participation because of urgency and importance.

I don't know if real estate may have the same level of urgency and importance from the public's perception.

On optional employment of the services of real estate practitioners, that has always been the case in the Philippines. Owners and buyers are free to talk directly to each other. Where did you get the idea that they can't?

So brokers in the Philippines are not merely showing and advertising properties, they are trusted representatives of either buyers and sellers for valuable services. Those who disagree are totally free not to engage their services.

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Permalink Reply by Mike on October 10, 2009 at 7:39am

Hi Odilon,

I agree that the citizenry can demand congress to do something. But as brokers and professionals, what are we doing to educate and lead them to these changes? Many of the changes can be achieve if we just choose to act. Like the saying goes, evil men have to do is do nothing.

Why do we need to brive registry employees to do their job? Why not post their names of those losers here? Perhaps the people can take a video camera everytime they have to deal with these crooks.

It seems that the more dysfunctional the system is, the more people will need brokers because they know the "runarounds" in a corrupt system. If that is the case, why will brokers initiate some changes?

The issues you mentioned have been going on for decades. I refuse to believe that at this day and age, all we can do is play along. What is the use of having real estate boards, associations and licensing bodies if we cannot push for basic changes?

In addition, please enlighten me on what services and "opinion" can a broker give a potential buyer especially on pre-selling properties. History and performance of the developer? Quality of the building or accuracy of advertised information perhaps?

Is a broker really trained and qualified to give his opinion or advice when it comes to quality, hazards, legal issues, taxes, etc? What recourse do consumers have to go after erring, incompetent and dishonest brokers especially if they are based abroad?

How many times a buyer will measure the dimensions of a property to verify accuracy of information advertised by the broker and seller? Will a broker do it as part of his services? Will the broker at least provide a written list of professionals to do the proper inspections?

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Permalink Reply by Alvah Buckmore on October 10, 2009 at 1:22am

Dear Mike:

Though this letter of mine may seem a little irrelevant to you, after more than 2 years of researching the market, I have been led to the conclusion most properties are over-priced for the average Filipino living in the Philippines. They simply can not afford most properties and the land presently for sale.

Several reasons may exist for this problem; however, the most important reason is obviously greed. The sellers are not placing their properties for sale to the Filipinos but to Americans or other people, from outside of the country, who can afford to pay their asking prices due to their substantially higher incomes.

I can see two patterns here. The first one is from a person who needs to sell his property as soon as possible. He is open to suggestions, negotiations and counter-offers. So his asking price is much more realistic and honest, just a little higher than what he hopes to get.

The second kind of person is greedy. He is holding onto his property for as much as he can get out of it. He is not subject to suggestions or negotiations. He has plenty of time and intends to wait until someone is stupid enough to pay his asking price though, to the average competent person, obviously unrealistically over-priced. Such a person lacks conscience and simply doesn't give a damn. A criticism will do no good and will be somewhat analogous to our "talking to the wall." He will rationalize "Everyone does the same thing!" That is not true. Most people are more honest than that. I think, in American psychiatry, we would use the term, "criminal personality," to describe that kind of greed.


Respectfully,

Alvah Buckmore, Jr.,

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Permalink Reply by Mike on October 10, 2009 at 7:45am

Hi Alvah, thanks for joining our discussion.

As long as we have people migrating abroad and sending money to their loved ones in the Philippines, changes will never happen. It serves an exhaust valve and as long as the valve is open, Filipinos will not revolt.

Hopefully I am wrong.

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Permalink Reply by Alvah Buckmore on October 10, 2009 at 11:38am

Dear Mike:

Yes, that is probably true. In fact, my wife and I just sent two heavy boxes of gifts worth almost php 50,000 to the Philippines for Christmas. They will go to each member of my wife's immediate family and my in-laws.

We are also planning to send php 50,000 to my wife's sister to pay for her medical expenses. She has cancer.

Respectfully,

Alvah Buckmore, Jr.,

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Permalink Reply by Rodolf Colina on October 10, 2009 at 12:49pm

Hi mike, thank you for your concerne about real estate in the philippines... i agree to this, because of high demand all over the world to our kababayan's who needs a property investment for their future. ( its the agents risk, not the buyer ) Buyers are waiting for immediate response to their INQUIRY, if the agents are not fully equipped with the tools, better not to join the INTERNET SALES MARKETING.

Also to the buyer must have a reletives here in the philippines to check the property or project they are interested to invest to lessen the risk. ( but some of our kababayan are not doing this, because they want to keep it secret to their relatives as other KAMAGANAK sisiraan pa ang Developer dahil Gustong Utangin yung perang pambili ng property ng kanilang OFW na kamag anak) Excuse me po! naranasan ko lang po ito. Pasensya na po.

Also I'm apealing to our Agents here in philippines to be honest and maintain the PROPER NETHICKET for internet marketing user or Proper Ethics in REAL ESTATE business. pasensya na po kayo sa message ko... Excuse me po sa mga nasagasaaan sa message ko...

God Bless us all!

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