Friday, September 21, 2007

New models in real estate

In times of change and turbulence, new models are proposed, tried, and either adopted or discarded as unworkable. In the purchase and sale of property in the United States, we are seeing a progression of the growth of online real estate marketing and new models for customer satisfaction in the process of buying or selling. In the past few weeks, I have become aware of a couple of models that are interesting.

One model is the investing in future change. I am aware on one company, Rex Holdings, that is offering homeowners immediate cash for a percentage of the increased value of their homes over the next period of years. Rex Holdings takes no equity position, but is contractually binding a homeowner to paying a percentage of profits on the sale of the property. The homeowner decides on the percentage of profits they are willing to pay for the immediate cash. The website for RexHoldings has a calculator that provides the homeowner an estimate of what amount of cash they would get for a home of X value with the homeowner willing to offer X percentage of profit in the transaction. I am sure that the amount of homeowner equity must be a part of the offering as well. If the homeowner owns a small amount of equity, the proposition must calculate the value of the risk involved. Go to the Rex Holdings website and let me know what you think about this model of borrowing or selling investments in your investment.

Are you attracted to the Menu Based commission offering? I believe that this model will become more mainstream in residential real estate in the future. I think that offerings of customer services must be more specific and perhaps even tied to results. Do you think that Brokers and agents will take a smaller role in the marketing, searching and general identification of property in the future? Will Brokers and Agents be relegated to the transaction negotiation portion of the transaction? Changes will happen with more regularity now that the market is open for change. I welcome them.