Is Wall Street Taking Over Real Estate?
At one time, all real estate companies were privately owned family enterprises. Not anymore. Of the 10 largest real estate firms, nine are now publicly traded--Zillow, RE/MAX, Realogy (Coldwell Banker), Realtor.com, Berkshire Hathaway, Compass, Redfin, Opendoor & eXp. The last, Keller Williams, appears on the way to going public soon.
These companies represent over 575,000 agents, almost 45% of all Realtors. A big reason for the metamorphosis is that real estate has embraced technology, centralization of consumer & agent data and branding on a national (often international) scale. Wall Street can provide the capital to accomplish this.
Real estate isn’t the only industry to undergo this change. For example, 1-800-Flowers enables you to arrange flower delivery anywhere in the world--the company eliminates the need to search for and vet local florists when you want to send a bouquet to someone far away...and it takes a small fee from the florist when you order your flowers.
But Wall Street’s fiduciary duty is to its investors. It takes a split from every transaction, leaving less left over for the broker who earned the commission. It focuses on companies and the CEOs who run them. Its success is determined by company profits, revenue growth and shareholder return on investment.
Wall Street doesn’t belong to real estate trade groups, promote properties, drive prospective buyers around, go on home inspections or find plumbers or electricians for its clients. Individual brokers do that and it’s important for you to find the best local agent you can when buying or selling what is probably your largest single asset, your home.
Especially in areas like our foothills, the local knowledge & discernment of a professional expert is important because every property is unique. It is the broker, not the company, you hire that will help price your home, develop a customized marketing strategy, follow up on title issues, stay on top of loan status and solve problems that inevitably turn up on the way to closing.
So while you may recognize a real estate firm by the extensive branding Wall Street has bestowed upon it, remember that it’s the professional agent who will make your real estate transaction a success. That’s a distinction every broker on Tupper’s Team lives by.