I still think the intitial premise of this post doesn’t make sense – that IPayOne getting sold indicates problems with their business plan.
It is fair that you take issue with their business plan, however, just not based on the fact that the business was sold.
Assuming they are in failure mode, though, it is likely that such failure is a result of a real-estate shakeout that is surely occuring. Having industry sales cut by 30% or more in the last year is going to hurt a startup, regardless of how good their business plan is.
sdrealtor – you defend your profession admirably, by the way. And effectively.
When you point out the limited profit in the industry, I wonder if the internet and discount brokers haven’t already had an effect. Also, with the profit spread so thinly, any significant reduction in commissions could wipe out the industry. Thus, if someone can figure out how to use the net to make it more efficient, it could take over.
Also – could the internet make it possible for a single agent to be more productive, and thereby live on smaller commission rates?
Furthermore, I think Real Estate Agents themselves have contributed to making the process as convoluted as possible – through lobbying and lawsuits – so that people perceive the need for an agent. Nothing against specific agents, but I’m sure the NAR is not working towards a smoother homebuying process.
I have purchased a house with an agent, and without. I must say it was easier without. Many of the complicated items on the forms are there just to protect the liability of the agents themselves. When buying without, I could just skip those sections altogether. Plus, the escrow agent walked us through all the details.
Worried about lawsuits? Get a lawyer, find an experienced escrow agent and do your own deal. That’s what I say.
I think the online process could go very smoothly if overseen by an escrow agent and legal advisors on both sides. They would take a fraction of the 5% agent fees.
I suspect after the coming bad times pass, the internet will rule. For the time being, though, I see the stalled momentum in the market killing any new internet-based businesses that may want to try something new.
