Hedge against the decline of the Realtor profession

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teelainen
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Hedge against the decline of the Realtor profession

Post by teelainen » Thu May 09, 2019 11:23 am

If someone in the Realtor profession wants to hedge against the decline of the residential real estate agent profession, what should they invest in? From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology.

For example, if you were a travel agent 25 years ago and knew that the travel agent profession was declining, you should have invested in Expedia (EXPE).

If a Realtor thinks that the real estate agent profession will be declining, what should they invest in now? Thanks.

lernd
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Re: Hedge against the decline of the Realtor profession

Post by lernd » Thu May 09, 2019 11:29 am

Off the top of my head, pulling directly from your travel agent -> Expedia example:

Redfin*



*not recommending it, just using it as a direct analogy

ohai
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Re: Hedge against the decline of the Realtor profession

Post by ohai » Thu May 09, 2019 11:32 am

Zillow and stuff like that is probably the most obvious. You might also want to just buy real estate related investments, as lower transaction costs would likely increase the value of holding real estate.

oldmotos
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Re: Hedge against the decline of the Realtor profession

Post by oldmotos » Thu May 09, 2019 11:40 am

The Realtor should invest in him/herself. Maybe train to be an appraiser, property manager or just a better Realtor as there will be business for a long time for the best.

cdu7
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Re: Hedge against the decline of the Realtor profession

Post by cdu7 » Thu May 09, 2019 11:42 am

I feel like this is the wrong question to ask since there are many stocks that a former travel agent "should have" invested in that would have had far higher returns than Expedia (netflix anyone?). We aren't here to pick and choose winning stocks, we are here to invest in the whole market and let it ride.

miamivice
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Re: Hedge against the decline of the Realtor profession

Post by miamivice » Thu May 09, 2019 11:43 am

I have not heard that commissions are falling (I understand that 3% is still typical for the buyers agent, and the listing agent charges between 1% and 3%) nor have I heard that technology has dramatically changed the industry.

I would also concur this isn't the right site for stock picking.

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RickBoglehead
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Re: Hedge against the decline of the Realtor profession

Post by RickBoglehead » Thu May 09, 2019 11:49 am

Yeah I don't get this.

If I'm a banker what should I invest in?

If I'm a manufacturer of ___, what should I invest in?

Investing as a hedge against your career ending isn't something I'd recommend except to invest in yourself as oldmotos said.
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Re: Hedge against the decline of the Realtor profession

Post by HEDGEFUNDIE » Thu May 09, 2019 12:05 pm

Get a job with OpenDoor

pshonore
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Re: Hedge against the decline of the Realtor profession

Post by pshonore » Thu May 09, 2019 12:14 pm

I think we heard the same thing 5-10 years ago. In my little corner of CT, the Agency model seems alive and well. Commissions might be down a tad, but most homes seem to sell with agents. YMMV.

Cycle
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Re: Hedge against the decline of the Realtor profession

Post by Cycle » Thu May 09, 2019 12:14 pm

For where to put your money, target fund or three fund or whatever.

For what to do so u have a rewarding career, retrain on something else that sparks joy for you.

I plan to be irrelevant at megacorp by age 45, so Im training on side hussles that can be career 2.0. also, my tolerance for a 40hr work week gets less every year.... Since I only do about 20hrs of focused work, if that.

These side hussles don't actually need to make any money, coaching would be an example, but should provide some intellectual stimulation.
Never look back unless you are planning to go that way

doon
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Re: Hedge against the decline of the Realtor profession

Post by doon » Thu May 09, 2019 12:19 pm

Build your retirement with diversified portfolio
Learn a new skill -

-->programming
-->sales of technology and software

I am not sure you can buy a stock can hedge against a particular profession
"Goal - Win the game before the need to retire"

Thegame14
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Re: Hedge against the decline of the Realtor profession

Post by Thegame14 » Thu May 09, 2019 12:25 pm

teelainen wrote:
Thu May 09, 2019 11:23 am
If someone in the Realtor profession wants to hedge against the decline of the residential real estate agent profession, what should they invest in? From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology.

For example, if you were a travel agent 25 years ago and knew that the travel agent profession was declining, you should have invested in Expedia (EXPE).

If a Realtor thinks that the real estate agent profession will be declining, what should they invest in now? Thanks.
Zillow?

rasta
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Re: Hedge against the decline of the Realtor profession

Post by rasta » Thu May 09, 2019 12:28 pm

there's always barber college

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F150HD
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Re: Hedge against the decline of the Realtor profession

Post by F150HD » Thu May 09, 2019 1:01 pm

teelainen wrote:
Thu May 09, 2019 11:23 am
....From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology....
+1

Having just recently bought a home and selling one, I have come to the conclusion that I'm not quite sure what I am paying for in my Realtor. Was thinking on starting a thread on it as it's been bothering me today. MLS is clunky (and a bit archaic), Redfin app is where I found my home. Realtor wasn't really necessary to find a home nor manage much of the process, felt like an unnecessary middleman in my case....a middleman who is getting paid to do very little.
Long is the way and hard, that out of Hell leads up to light.

adamthesmythe
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Re: Hedge against the decline of the Realtor profession

Post by adamthesmythe » Thu May 09, 2019 1:13 pm

Trying to invest in the STOCK of the disruptors (Redfin, Opendoor, etc.) is unlikely to be a winning strategy- because the history of internet disruptors suggests that most, maybe even all, will fail.

For investment the best bet is the usual broad-based portfolio.

Now as far as personal employment is concerned- working for the disruptors as an agent is likely to become a race to the bottom, like working for Uber as a driver. (Now if you are an engineer for Uber- that might be different).

My impression is that much of the RE task force is part-timers. There will probably still be jobs for very good agents at strong agencies. Think about the relocation part of the business- that is not going to go away. The alternative for a present agent is to try to move into a different business if it gets too competitive in RE.

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teelainen
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Re: Hedge against the decline of the Realtor profession

Post by teelainen » Thu May 09, 2019 1:16 pm

ohai wrote:
Thu May 09, 2019 11:32 am
Zillow and stuff like that is probably the most obvious. You might also want to just buy real estate related investments, as lower transaction costs would likely increase the value of holding real estate.
You mean REITs? What category of REITs do you suggest for this?

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teelainen
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Re: Hedge against the decline of the Realtor profession

Post by teelainen » Thu May 09, 2019 1:24 pm

oldmotos wrote:
Thu May 09, 2019 11:40 am
The Realtor should invest in him/herself. Maybe train to be an appraiser, property manager or just a better Realtor as there will be business for a long time for the best.
oldmotos, thanks for your insight. Just curious, why do you think the best Realtors will be immune from all this? I'm not disagreeing, but just wanted to hear your thoughts on why. Thanks.

btenny
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Re: Hedge against the decline of the Realtor profession

Post by btenny » Thu May 09, 2019 1:31 pm

Invest in some education to change careers away from real estate agent.... Maybe figure out how to go into computer or medical sales...

CascadiaSoonish
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Re: Hedge against the decline of the Realtor profession

Post by CascadiaSoonish » Thu May 09, 2019 1:34 pm

I don't disagree with earlier posters who note the profession hasn't declined yet. But I think it's a matter of time as the industry seems to be relying on $$$, lobbying, and inertia to preserve market position rather than evolving. See taxi companies and Uber to see how well that eventually worked out for the incumbents.

So it's not a bad idea to have a Plan B ready to go. I like the idea of cross-training into related professions which are more insulated from a decline in the commission model; appraisals, development companies, property management.

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AerialWombat
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Re: Hedge against the decline of the Realtor profession

Post by AerialWombat » Thu May 09, 2019 2:01 pm

I’nm involved with one of the startups that is involved in this process. Difference being that this company is offering a solution to the impacted real estate agent, not the consumer.

I’m not here to plug anything, so I’ll give the generic answer: Find a new niche.

The disruption is happening in the owner-occupant residential buy/sell model. So, take your real estate license and experience to another arena. Investors. Commercial. Leasing. Management. Development. Etc.

Mingus
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Re: Hedge against the decline of the Realtor profession

Post by Mingus » Thu May 09, 2019 2:02 pm

The answer is cross training to be able to jump ship.

And the answer is to also be saving and investing enough money that eventually one day you'll have enough in savings that you do not have to wake up to earn a paycheck anymore.

ohai
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Re: Hedge against the decline of the Realtor profession

Post by ohai » Thu May 09, 2019 2:14 pm

teelainen wrote:
Thu May 09, 2019 1:16 pm
ohai wrote:
Thu May 09, 2019 11:32 am
Zillow and stuff like that is probably the most obvious. You might also want to just buy real estate related investments, as lower transaction costs would likely increase the value of holding real estate.
You mean REITs? What category of REITs do you suggest for this?
Realtor fees hurt small single unit sales the most, so this is the segment that will probably benefit most from a frictionless market. Big REITs probably have economies of scale and more efficient transaction processes. Of course, there will be some spillover effect either way.

I think REITs are a bad investment overall, due to tax reasons. However, that's unrelated to the discussion regarding realtors. Plus, in any case, other factors, such as the overall economy, will likely matter more than what happens to realtors.

protagonist
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Re: Hedge against the decline of the Realtor profession

Post by protagonist » Thu May 09, 2019 2:51 pm

teelainen wrote:
Thu May 09, 2019 11:23 am
If someone in the Realtor profession wants to hedge against the decline of the residential real estate agent profession, what should they invest in? From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology.

For example, if you were a travel agent 25 years ago and knew that the travel agent profession was declining, you should have invested in Expedia (EXPE).

If a Realtor thinks that the real estate agent profession will be declining, what should they invest in now? Thanks.
That is a double-edged sword, no?

The travel agent who invested in Expedia was accelerating his own decline. It's like the Soviets in the mid-eighties investing in Northrop-Grumman or Lockheed-Martin.

Maybe a better bet would be to do what forward-thinking diners did in the nineties when they added vegetarian options to their menus or now by adding local craft beers. In other words, if you can't beat them, join them. Offer flat-fee MLS listing service for example. Or figure out a way to compete with Redfin.

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Re: Hedge against the decline of the Realtor profession

Post by Teague » Thu May 09, 2019 2:58 pm

RickBoglehead wrote:
Thu May 09, 2019 11:49 am

If I'm a manufacturer of ___, what should I invest in?
Then you should invest in ___. Now, some may say you should invest in | since it obviously very different than ___. But for the best hedge against ___ you should invest in ___, because it is the 180 degree opposite.
Semper Augustus

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JoeRetire
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Re: Hedge against the decline of the Realtor profession

Post by JoeRetire » Thu May 09, 2019 3:02 pm

teelainen wrote:
Thu May 09, 2019 11:23 am
If someone in the Realtor profession wants to hedge against the decline of the residential real estate agent profession, what should they invest in?
If a Realtor thinks that the real estate agent profession will be declining, what should they invest in now?
They should invest in sufficient education to make their transition to a new career viable.

These days, everyone should be a lifelong learner.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

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JoeRetire
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Re: Hedge against the decline of the Realtor profession

Post by JoeRetire » Thu May 09, 2019 3:05 pm

Teague wrote:
Thu May 09, 2019 2:58 pm
Then you should invest in ___. Now, some may say you should invest in | since it obviously very different than ___. But for the best hedge against ___ you should invest in ___, because it is the 180 degree opposite.
LOL!

Maybe you should split the difference and invest in / or \ ?
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

Hypersion
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Re: Hedge against the decline of the Realtor profession

Post by Hypersion » Thu May 09, 2019 4:20 pm

I moved out of the area when selling my house and my RE agent took care of the fixing up of the house so I didn't have to. He earned his commission. Redfin and the like will push out a lot of bad RE agent or one unwilling to adapt and learn.

William104
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Re: Hedge against the decline of the Realtor profession

Post by William104 » Thu May 09, 2019 4:42 pm

I sell in a fairly high end area and it is alive and well I would say. Commissions are always 6% unless you're competing for 3M+ listings then many of them are getting to 5%. There are a few companies trying to "disrupt the space" at any given time. Compass, Homie, etc. It's been going on for over a decade and other than Zillow & Redfin taking over a large chunk of the online buyer traffic it's largely the same. I'm in a small "luxury" area and not in a metro so things may be changing there faster than it is here.

When someone says these things I immediately think of how many times on a regular basis we have to save a deal. Whether its saving the buyer or seller from making mistakes (lost earnest money, missing deadlines, etc) or dealing with the multitude of issues that comes along with inspections and other due diligence items. I don't think you can take out or minimize the human element needed here to resolve these things.

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Re: Hedge against the decline of the Realtor profession

Post by HEDGEFUNDIE » Thu May 09, 2019 7:35 pm

William104 wrote:
Thu May 09, 2019 4:42 pm
I sell in a fairly high end area and it is alive and well I would say. Commissions are always 6% unless you're competing for 3M+ listings then many of them are getting to 5%. There are a few companies trying to "disrupt the space" at any given time. Compass, Homie, etc. It's been going on for over a decade and other than Zillow & Redfin taking over a large chunk of the online buyer traffic it's largely the same. I'm in a small "luxury" area and not in a metro so things may be changing there faster than it is here.

When someone says these things I immediately think of how many times on a regular basis we have to save a deal. Whether its saving the buyer or seller from making mistakes (lost earnest money, missing deadlines, etc) or dealing with the multitude of issues that comes along with inspections and other due diligence items. I don't think you can take out or minimize the human element needed here to resolve these things.
Easy to minimize the human element - just sell your house to an algorithm and buy your house from one. I.e. Opendoor and Zillow Offers.

And I say that as a real estate broker.

clacy
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Re: Hedge against the decline of the Realtor profession

Post by clacy » Thu May 09, 2019 7:47 pm

There will always be a need for some good Realtors. If you're good, I wouldn't worry too much. If you're average or worse, I would consider what other options would be available to you if someday you realize it's not working any more.

Keep in mind, these major changes don't happen overnight. They happen gradually over the course of a few years.

phxjcc
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Re: Hedge against the decline of the Realtor profession

Post by phxjcc » Thu May 09, 2019 8:06 pm

I suspect it will be one of the big FAANG boys.

Well, forget one of the A's and the N.

They are going to need ubiquitous reach, large lobbying power, and huge data cababilities.

Sounds like Faceazonagle.

I suspect during the next housing collapse, values will be down, some owners will be close to 0 equity, commission savings will be a BIG value add to go with amagoobook.

Ergo, someone will pounce.

Where is my C## style guide?

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Re: Hedge against the decline of the Realtor profession

Post by JoeRetire » Thu May 09, 2019 8:31 pm

miamivice wrote:
Thu May 09, 2019 11:43 am
I have not heard that commissions are falling (I understand that 3% is still typical for the buyers agent, and the listing agent charges between 1% and 3%) nor have I heard that technology has dramatically changed the industry.
I'll just drop this here: https://www.marketwatch.com/story/anoth ... latestnews
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skierrex
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Re: Hedge against the decline of the Realtor profession

Post by skierrex » Thu May 09, 2019 9:06 pm

Being a Realtor was the old job.

Being a Landlord is the new job.

Buy them while you are in the business.

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fortfun
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Re: Hedge against the decline of the Realtor profession

Post by fortfun » Thu May 09, 2019 9:23 pm

rasta wrote:
Thu May 09, 2019 12:28 pm
there's always barber college
Nah, the Flowbee could make a comeback.
https://www.flowbee.com/

dcw213
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Re: Hedge against the decline of the Realtor profession

Post by dcw213 » Thu May 09, 2019 9:58 pm

This is a very interesting topic. I work in the industry (housing finance). It is a crazy one for many reasons. Home values are supported due almost entirely to the fact that the government takes on nearly all mortgage credit risk (why else would investors in long term fixed rate prepayabpe debt accept only 100 bps above treasuries?). There are so many people taking a bite out of the consumer along the way. Many have little value added. Agents, appraisers, closing costs, securitization fees, guaranty fees, servicing fees, etc before the proceeds go to the actual owner of the loan/asset.

Disruption is already happening - many investors in mortgage debt are moving to technology driven automated valuation models in lieu of a traditional appraiser. The profession is being largely phased out. I imagine agents and human underwriters are next as technology takes over the relevant processes. Not sure how it will all land but it is interesting times with technology moving and the government not addressing the critical issue of housing finance reform at all.

pkjr
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Re: Hedge against the decline of the Realtor profession

Post by pkjr » Thu May 09, 2019 10:11 pm

If you are a Realtor buy houses. Stop being on commission. Take control of assets and resell them. Learn how to use options. Specialize.

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Re: Hedge against the decline of the Realtor profession

Post by randomguy » Thu May 09, 2019 10:30 pm

teelainen wrote:
Thu May 09, 2019 11:23 am
If someone in the Realtor profession wants to hedge against the decline of the residential real estate agent profession, what should they invest in? From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology.

For example, if you were a travel agent 25 years ago and knew that the travel agent profession was declining, you should have invested in Expedia (EXPE).

If a Realtor thinks that the real estate agent profession will be declining, what should they invest in now? Thanks.
They should invest in total market just like everyone else:). The person who bought priceline at 1000 in 1999 who know has a stock is worth 1500, hasn't outperformed the market. You can't make the assumption that the industry that is being disrupted is going to result in excess profits compared to the market. It is likely that there will be some great winner that has good returns but the other 10 competitors that fail and go to zero, really reduce your profits.

We can all make guesses about what the future is of real estate agents but they are just guesses.

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Re: Hedge against the decline of the Realtor profession

Post by ClevrChico » Thu May 09, 2019 10:49 pm

When my parents sold their house, they had to churn through several agents. All but one agent actually cared to put much time into it. Most were content to spend a couple hours up front and sit back and hope for a commission. It's an incredibly inefficient industry and a dead end for most when they are replaced with technology.

It will probably take the next crash paired with technology before it happens. Prices are insane here and agents are living large.

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Re: Hedge against the decline of the Realtor profession

Post by SoAnyway » Thu May 09, 2019 11:36 pm

teelainen wrote:
Thu May 09, 2019 11:23 am
If someone in the Realtor profession wants to hedge against the decline of the residential real estate agent profession, what should they invest in? From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology.

For example, if you were a travel agent 25 years ago and knew that the travel agent profession was declining, you should have invested in Expedia (EXPE).

If a Realtor thinks that the real estate agent profession will be declining, what should they invest in now? Thanks.
OP, you framed your post in the hypothetical and didn't say if you're a Realtor or not, so it's unclear whether your thread is appropriately posted as something personal to you. SoAnyway....

In the internet age (#1) anyone paying 6% (or more) commission to sell a home in any market is doing the equivalent of taking a portion of their hard-earned money, lighting a match, and setting fire to it. Meanwhile, (#2) any Realtor depending on raking in 6% commissions forevermore to support a family is delusional.

For the former #1 category, there are TONS of alternatives and new ones popping up all the time. Some have been mentioned upthread; this article has others. It's a bit of a "land grab" now in this market space so who knows who will ultimately be the "go to" company a la Facebook vs. MySpace, VHS vs. Sony, etc. (As far as investment advice, per BH philosophy, I buy haystacks ; )....)

Anyone in the latter #2 category should be looking to invest in HIM/HERSELF, as many upthread have suggested. True, they'd always be able to find a few suckers out there who are too clueless to realize they can get everything a traditional Realtor is pitching for a LOT less (just like the Edward Jones clientele), but there will be (a) fewer and fewer of those over time, and (b) increasing competition among those hanging on to the old models to get those suckers signed on.

In short, to answer your question OP, you are correct: Real estate agents who fail to adapt will be toast. If you're a Realtor, forget about the "investment hedge"- other than a well-diversified portfolio of investments. The only "hedge" for Realtors is to do what humans and all other organic creatures in all sorts of industries have done for centuries:
Adapt.
Or die.

The good news is that humans have a "leg up" in that they have the ability to reason, so the above is a CHOICE. If you're a Realtor, I suggest you choose well. If you choose poorly, you will have only yourself to blame. If instead you're simply scouting RE investments, I suggest you start a different thread but I'd imagine most will simply tell you to diversify. ; )
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.

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teelainen
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Re: Hedge against the decline of the Realtor profession

Post by teelainen » Fri May 10, 2019 12:03 am

AerialWombat wrote:
Thu May 09, 2019 2:01 pm
I’nm involved with one of the startups that is involved in this process. Difference being that this company is offering a solution to the impacted real estate agent, not the consumer.
AerialWombat, what kind of solution does your company offer to the impacted real estate agent?

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Re: Hedge against the decline of the Realtor profession

Post by KyleAAA » Fri May 10, 2019 12:07 am

Expedia was not public 25 years ago, so you’d have to have invested in Microsoft. Which also would have turned out well. I guess Redfin or Zillow would be the closest thing today, but not really.

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Re: Hedge against the decline of the Realtor profession

Post by AerialWombat » Fri May 10, 2019 7:43 am

teelainen wrote:
Fri May 10, 2019 12:03 am
AerialWombat wrote:
Thu May 09, 2019 2:01 pm
I’nm involved with one of the startups that is involved in this process. Difference being that this company is offering a solution to the impacted real estate agent, not the consumer.
AerialWombat, what kind of solution does your company offer to the impacted real estate agent?
Short version: It’s a web-based software that agents can use to offer a version of financial/retirement planning based around direct real estate (an asset class most financial planners just ignore) instead of (or in addition to) just securities.

For an agent, it’s nice because transaction frequency (and thus commission frequency) is higher with investors than owner occupants. PM me if you want a link, as I don’t want this to sound like a commercial.

It goes back to what others have said: Get the education to expand your career options. Build on your existing base, think outside the box. That’s what I have done in my accounting-related businesses, and it led to a great career.

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Re: Hedge against the decline of the Realtor profession

Post by 3CT_Paddler » Fri May 10, 2019 8:54 am

Technology enables a reduction in the price for Realtor services, but it is current law that keeps the 6% commission in play and will continue to keep it in play. The problem as I see it is that you can really only save 2% at most on the transaction fee with the current setup... you will still need to pay the other person's agent the full 3%.

There is an effort to upend that, but I would expect Realtor's groups to be very well financed to protect their position, as this would be a huge shift in the industry.

https://therealdeal.com/2019/03/11/a-ne ... e-know-it/
A new class action lawsuit alleges that the National Association of Realtors, along with the “Big Four” — Realogy, HomeServices of America, RE/MAX and Keller Williams — violated federal antitrust law by conspiring to require home sellers to pay buyer’s broker’s commissions at inflated rates. The suit was first reported by Inman.

The complaint, filed March 6, takes aims at NAR rules that require all brokers to offer buyer broker compensation when listing a property on a MLS, saying this has driven up costs to the seller and stifled competition.

“Because most buyer brokers will not show homes to their clients where the seller is offering a lower buyer broker commission, or will show homes with higher commission offers first, sellers are incentivized when making the required blanket, non-negotiable offer to procure the buyer brokers’ cooperation by offering a high commission,” the complaint reads, “Absent this rule, buyer brokers would be paid by their clients and would compete to be retained by offering a lower commission.”

HEDGEFUNDIE
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Re: Hedge against the decline of the Realtor profession

Post by HEDGEFUNDIE » Fri May 10, 2019 8:54 am

KyleAAA wrote:
Fri May 10, 2019 12:07 am
Expedia was not public 25 years ago, so you’d have to have invested in Microsoft. Which also would have turned out well. I guess Redfin or Zillow would be the closest thing today, but not really.
Zillow is making Zillow Offers a core part of their strategy, so they would be the ones to buy.

https://www.inman.com/2019/04/02/zestim ... -ceo-says/

Redfin compresses the commission, but doesn’t get rid of it completely, so they are ahead of the curve but will probably be disrupted themselves in the medium-long term.

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3CT_Paddler
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Re: Hedge against the decline of the Realtor profession

Post by 3CT_Paddler » Fri May 10, 2019 9:09 am

More insight into the class action lawsuit is here - https://www.inman.com/2019/03/08/what-t ... -realtors/

It will probably be years until there is any resolution on this.
Their facts are hard to dispute. NAR does have those policies. The MLS does have the unilateral offer of compensation. The brokers and franchises do require their agents to become Realtors and join the local MLS. The MLS is an essential utility to be in business. None of that is really all that disputable.

So the issue will be whether subtle details about how cooperation and compensation really works will be enough to make a difference legally. I have no way of knowing how that plays out.

...

The two lead law firms in this case are Cohen Milstein Sellers & Toll and Hagens Berman Sobol & Shapiro. These are two of the most successful class action plaintiff’s law firms in the country. They both appear on the list of Law 360’s “Most Feared Plaintiffs Firms” with some significant victories over really significant companies.

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Re: Hedge against the decline of the Realtor profession

Post by stan1 » Fri May 10, 2019 9:38 am

Realtor + Landlord + land + small subdivisions + Contractor's license (all local)

Do enough construction that you build and sustain working relationships with reliable sub contractors [who give you first priority, volume discounts and trust you to keep using them in bad times as well as good times]

Maybe a little flipping but mostly building a local real estate empire.

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Re: Hedge against the decline of the Realtor profession

Post by texasdiver » Fri May 10, 2019 11:22 am

As others have pointed out. It is probably the wrong strategy to try to invest your portfolio in something counter-cyclical to your job. Or to try to hedge against your job with your investments. They should be separate. Just stick with broad-base index funds.

The other question you didn't quite ask was what kind of personal investments in your career would be good to position yourself against the potential decline in the traditional real estate industry. My uneducated guess would be property management. Seems like the long-term trend these days is away from family ownership of single family homes and towards corporate ownership and mangement of them as rentals. I don't know to what extent all the property management tasks are handled in-house with these big companies. But that would be the most logical area of expansion for real estate agents.

You could also look at something like professional staging and real estate "consulting" for people who want to DIY sell their houses through internet brokers but still want to hire someone for professional staging and things like photography. Instead of working on commission, do sales consulting for a set fee. Something like that.

g2morrow
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Re: Hedge against the decline of the Realtor profession

Post by g2morrow » Fri May 10, 2019 11:44 am

F150HD wrote:
Thu May 09, 2019 1:01 pm
teelainen wrote:
Thu May 09, 2019 11:23 am
....From what I have heard and seen, it is very likely that real estate agents will face major challenges in the next 5-10 years because of falling commissions and technology....
+1

Having just recently bought a home and selling one, I have come to the conclusion that I'm not quite sure what I am paying for in my Realtor. Was thinking on starting a thread on it as it's been bothering me today. MLS is clunky (and a bit archaic), Redfin app is where I found my home. Realtor wasn't really necessary to find a home nor manage much of the process, felt like an unnecessary middleman in my case....a middleman who is getting paid to do very little.
I for one can't wait. 6% is just ridiculous. 100k vs 200k house, is it really twice as expensive to sell??

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Re: Hedge against the decline of the Realtor profession

Post by KyleAAA » Fri May 10, 2019 2:00 pm

HEDGEFUNDIE wrote:
Fri May 10, 2019 8:54 am
KyleAAA wrote:
Fri May 10, 2019 12:07 am
Expedia was not public 25 years ago, so you’d have to have invested in Microsoft. Which also would have turned out well. I guess Redfin or Zillow would be the closest thing today, but not really.
Zillow is making Zillow Offers a core part of their strategy, so they would be the ones to buy.

https://www.inman.com/2019/04/02/zestim ... -ceo-says/

Redfin compresses the commission, but doesn’t get rid of it completely, so they are ahead of the curve but will probably be disrupted themselves in the medium-long term.
I think OpenDoor will beat them, but the only way to get that stock is to work there.

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