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LendingTree, Inc. Message Board

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  • bearofbleecker bearofbleecker Feb 11, 2003 4:23 PM Flag

    Riskreward2 and Random...part 2

    An intertesting and thoughtful post, for which I thank you, although I think you are undervaluing the simple fact of their survival: The fluke of falling interest rates may have saved them, but they are saved nevertheless, with major visibility and a not inconsiderable brand franchise. The question is whether the internet is an efficient way to generate and process leads in this business, and I would guess that it is. I think that the internet basically puts all of the traditional brokered transactions - stocks, travel, auctions, etc. - into the hands of the consumer. Therefore, the logical development here is to entirely eliminate both mortgage brokers and real estate brokers. Do I really need to pay 6% of the value of my most valuable asset to a person who, whoever charming, basically stands there and says "It's a lovely home."? I think everyone who has ever bought or sold a home knows this
    is a ripoff. I don't dispute that a real estate broker may work hard for his/her money, but only because the riciculously high commissions create too many brokers, most of whom make two or three sales a year. Someone with a little marketing clout- and unencumbered by traditional brokerage relationships - could revolutionize this business. In other words, "Would you buy a house on E-Bay?" If your neighbors did, I bet you would. Thanks again for your thought-provoking post.

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    • welcome bear.

      i agree on the value of the brand, however this value is only "true value" in two circumstances... continued operation or liquidation... if liquidated, the brand is worth something, but what? (got $6M for the url)

      the internet is certainly a viable way for companies to operate, but ONLY if they can REMOVE cost layers and remove process layers in the transaction...

      i would agree with you that A paper mortgage brokers could be erradicated from the process, but not with using lt's model... they are merely supporting the old way of doing things and adding cost into the process... hardly an efficient model... all the old processes and costs, plus ADDITIONAL steps and ADDITIONAL cost...

      i STRONGLY agree with you that 80%+ of the real estate industry could be instantly eliminated... there is really NO NEED to list a property with an agent and pay 6%-7% commissions. in selling my home, i would have no problem with paying a small listing fee to have my data available via MLS and other search systems, but would CERTAINLY be willing to pay 2%-3% to a realtor who brought me a BUYER...

      ultimately, the listing brokers can bring a TON of marketing to your property, or NONE... it is almost a crap-shoot, but as soon as they have you under contract, you are married to them and they get their $ regardless of whether they work for it or not...

      (as a sidenote, most mortgage brokers are paid 50% of the commissions on a loan, which, with internet margins only ammounts to roughly .5% - .75%)

      once again welcome, and i look forward to ongoing meaningful discussions.


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