"This is the Big One"

I had an egg sandwich this weekend with an oncologist who asked for a meeting so he could roll out a dozen ways to revolutionize the real estate industry. Just as the conversation was drifting toward other topics, including my love for beagles and their role in his medical experiments, he made one final proposal: web-controlled lockboxes for self-service home tours.

A traditional lockbox is how real estate agents access properties for sale, entering a code issued by the Multiple Listing Service. This lockbox is the main problem with an online business model, as it is expensive for us to hire field agents who can open the lockbox just to show the property, and we would rather have those folks focusing on what Redfin agents do best, guiding customers through decisions, negotiations, contingencies, and escrow.egg sandwich

The oncologist’s idea was to provide an online forum where a prospective buyer could present credentials (bank statements, credit card number, criminal record, photo, property access history) to the seller. The seller could then decide to schedule a time when the buyer could access the property, whereupon the website would issue a temporary code for opening the web-controlled lockbox. Armed with the code at the designated time, the buyer could access the property on her own.

This lockbox would be available to any seller, in addition to the traditional agent lockbox; homes with the self-service lockbox would be identified with a special marker on our map. Of course many homes would not have this self-service lockbox, and many buyers will always prefer to meet a friendly, knowledgeable Redfin field agent to introduce them to Redfin and guide them through the first steps of buying a home.

And yet this idea is intriguing. The oncologist presented his idea with fiendish intensity, anticipating objections, proposing manufacturing schemes, suggesting variations (fingerprint recognition, hidden surveillance cameras). His wife, a former real estate agent, nodded carefully.

“But someone could hide in the house,” I said. “Someone could get hurt.”

“I’m an oncologist,” he said, smiling. “I know someone is being hurt right now.”

The cafe had become quiet. Outside it had just begun to snow. The oncologist stood up.

“No one will be hurt,” he said. We talked about how other sites facilitated transactions and even meetings between total strangers: match.com, eBay, craigslist. He reminded me that the Internet depended on trust, and that the seller could decide for himself who could see the property. For the first time in my life, I felt cautious, and somehow cowed.

How do you feel about this idea? I promised the oncologist I would ask via this blog, and he promised to monitor the comments. The title of this post was of course his idea, too…

Picture courtesy of chotda. Bonus link from a Friend of Redfin …

Discussion

  • http://www.bearmtnridge.com New homes sale in Georgia for

    While this sounds like a great idea I to am leary. I fear it would only work with vacant homes. People will not want a stranger around there personal items for fear of tampering with them or stealing them. I worry for the psyco who decides to trash the house. I worry to for the pshco who stays behind or leaves a door unlocked till later.

    I hear they have electric lock boxes which should help with the key problem just knowing all the codes is a problem I have been told. Could it as simple as each person uses “oh no” the SS# to get in (that is the realtor #). I think showing the house is part of the job and unfortunately those showings are still the realtors responsiblity and they can use that opportunity to sell the special features in a house or point out potential problems.

    Just my thoughts!

  • http://blog.comeover.com Alex Mather

    Besides the obvious security concerns, I wonder if the seller would want to take on the administrative duties of managing the many appointment requests to the home. Isn’t the process of selling a home stressful enough?

    I foresee sellers who use these new lockboxes being inundated with requests once the barrier is removed. Managing the scheduling (and screening) of all of these requests is not something that I would want to do at all.

  • Joe

    Good idea and sorely needed in the Redfin day-and-age (or for folks just not interested in working w/ a buyer agent). Unfortunately, it is simply too risky and not something I would use for a property I was selling.

    What really needs to be done is to force a seller’s agent to actually act as an agent solely interested in selling the property. It should be an ethical construct that a seller agent actually show (or delegate the showing) the property instead of the “you should use a buyer agent” rant or, in the Redfin areas, deter buyers from using Redfin (which is what happens everyday). Go ahead, randomly call listing agents and see how many will show you the property after indicating you intend to offer via Redfin. I’ll buy you lunch if over 50% oblige.

    Isn’t that nuts; in the Seattle area, the average rip for a seller agent is over 10K and the seller agent won’t even show you the property in the majority of cases! Amazing!

    That’s the REAL problem to solve . . .

  • Maria P.

    I’m a sucker for technology and while I generally like the idea the security is too big of an issue.

    Even if you would be required to “code out” when you left and even if once a person entered the home and left the home the seller could be notified via an automatic email or text message, this would leave even more room for fraud.

  • http://www.SanMateoRealEstateNews.com Lenore Wilkas

    What this doctor doesn’t think through is that this opens up one’s house for anyone to go thorough, whether they’re qualified to buy, or not. This is a dumb idea. What happens if the house for sale is listed for multiple millions of dollars? Joe-Blow decides this and his wife want to snoop and sign up to go see it. They are no more qualified to buy the house as the man in the moon, but off they go and the seller has NO way of knowing whether this guy could or should be there. Another issue, and one I tell all of my clients, is to remove anything of value because things can and do get stolen, even with an agent in the house. A big one, drugs. Also knowing human nature people forget to do things, including the key out after looking. This opens up the seller to huge legal consequences, too, should the looky-loo do a slip and fall, or pretends to do this and sues the seller. Way too dumb an idea and very dangerous on many levels.

  • http://www.eastsiderealestatebuzz.com Debra Sinick

    TMI- Too much information! Would a buyer want to give every seller whose home they simply want to view all of their personal and financial information. I think not! It is none of the seller’s business. As a Realtor, it is none of my business either.

    I recommend good lenders who I know will take care of my client, be honest, and explain everything throughout the process. I need to know the buyer is qualified, not their financial history.

    So would a buyer want to put all their financial information out on the internet to anyone and everyone, highly unlikely. Sounds like a good way for someone to hack in and get financial data. Let’s see, someone could then start a business selling social security numbers.

    From the seller’s point of view, as many people have already said, the security issues would be huge. Just because you were privy to someone’s financial records, does that mean the person is a fine, upstanding citizen?

    What if the person who came in was really looking for prescription drugs? Don’t think it happens? It does.

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  • Jim

    Home showings ought to be escorted. This is the strongest argument for reputable real-estate agents. Pulling together a bunch documents gives me no confidence that the person with the documents is honest.

    BTW, E-bay’s trust model is broken when a long-time seller with good credentials gets phished/hacked (it happens often enough). For a week, scam artists sell like mad using good credentials then dump the account.

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    • Dr. With Ideas

      Just a few clarifications here from the idea’s originator. The seller will open their home to a verified buyer. This is someone who has submitted themselves to a background check that would include at the minimum the presentation of:
      1) photo-ID, likely along with a thumb print,
      2) prequalification for a loan amount sufficient to buy the house.
      There will be no strangers in the house. Anyone who enters will be easily traced. What sort of background check is required for a real estate agent’s license? If there is someone intent on harming a person in their home, it would make little sense for them to disclose identifying information before doing so. Also note that a key is NOT necessary to enter most homes if one is determined to get in.
      Additional security measures could easily be deployed to assure sellers. In-house monitoring via video could be easily installed (or threatened) for a fraction of the cost of the commission.
      To clarify one thing from Glen’s post. The buyer will not provide specific information to the seller. The seller will be “verifed” by the specific criteria to Redfin or some other agency capable of conducting information acquisition and storage in a verifiably secure manner. Redfin could easily handle and perhaps profit from this.
      Quoting from some of the posts:
      What this doctor doesn’t think through is that this opens up one’s house for anyone to go thorough, whether they’re qualified to buy, or not
      This is not the case. This opens up the house for a verified buyer with the documentation to prove their identity and sufficient resources to complete the purchase.
      This opens up the seller to huge legal consequences, too, should the looky-loo do a slip and fall, or pretends to do this and sues the seller.
      I am not a lawyer, but I don’t understand how injury incurred without an agent present is any different than injury that occurs when the agent is present.
      I need to know the buyer is qualified, not their financial history
      A financial history will not be provided, but a bona-fide approval will be. Personal details will not be disclosed.
      What if the person who came in was really looking for prescription drugs? Don’t think it happens? It does.
      Again, an agent doesn’t monitor their client’s every move when visiting a house. An agent can easily be used to gain entry and the “buyer” can easily gain access to a medicine chest. The solution is the same in either system: remove or lock up valuables. How much would it cost to provide a small safe to the seller if they are living in the house?
      BTW, E-bay’s trust model is broken when a long-time seller with good credentials gets phished/hacked (it happens often enough). For a week, scam artists sell like mad using good credentials then dump the account.
      I am not sure how someone will scam the system in a legal way. If you are required to represent yourself to a notary and provide ID and a finger print, I believe you will be breaking some sort of law to create false documentation. I don’t know how much of a deterrent this is to the determined, but it makes it much easier to catch the person after the fact. This may be a way for Redfin to be useful. They send out an agent who is a notary, take the info, a photo and print. The person gets an electronic fob which gives them (along with a time dependent code) access to a seller’s home. Heck, they could probably charge for it.
      I was really busy last month and spent about $30,000 on my credit card. I signed up for several matchmaker services, resume websites, and, oh yeah, I took a few flights to London, The Middle East, and Singapore. I’m really tired because I was so busy!
      What really happened was someone “borrowed” my credit card number, shared it with friends and family, charged a number of trips, and used dating and job services. I figure the person(s) who had the card number was really hurting and in need of a job, a date, and travel.

      Stealing or buying a single number is an anonymous transaction. Perpetrators in the proposed system will be well documented. Someone will be able to fool the system, but it will be much harder to hide with all the information on hand regarding their identity.
      A buyer giving all that personal information to the seller. Is Glenn sure it wasn’t his proctologist? It would explain his fascination with all this digital information. BAH DUM!
      Ha ha! Quoting from Wikipedia: Proctology is a field in medicine. The word Proctology is derived from the Greek words Proktos, meaning anus or hindparts, and Logos meaning science or study. Physicians specializing in this field of medicine are more commonly called colorectal surgeons, as the term proctologist is outdated in the more traditional areas of medicine.
      See above. Information transfer is limited. The approval will come from Redfin or Secure real estate transactions inc.

  • http://www.developingatlanta.com/wordpress/2008/01/31/glenn-kelman-ate-my-lunch-today-at-breakfast/ Giles@DevelopingAtlanta.com

    The truth be told… Almost all good agents RRRReally get their clients house ready for a parade of strangers coming through their house. Meaning if you act as if it is your house and it has all of these precious things in it like a museum then how do you expect the average buyer with no imagination to see themselves at home in your house.

    Your house should be fairly bare bones and EVERYTHING that you think someone might take should be boxed up and in the attic or in storage in preparation for your move. Anyone who would leave personal documents, expensive jewelry, etc etc. in a house that is to be shown has not been properly coached by his or her agent.

    but of course there could be fraud, no different than anything else in life…

  • Molly Hadley

    It could easily be done and prospective buyers tracked and held accountable but at what point do agent and buyer actually interact in person? The brokerage could issue their existing electronic keys and instructions to clients but it does open up more liability for the brokerage. Locks exist that are web based and time coded in the vacation rental industry. A box should be not that big a deal. However, I bet you’d find yourself answering to the sellers for doors left unlocked etc. This brave new world is too anonymous for me, I like showing clients property.

  • vw

    I think it’s an idea that’s a step in the right direction.

    As a buyer, I’d really like to be able to research a house or and area, and view the houses I shortlist at a time that’s good for me, sans an agent. Especially if I’m an experienced buyer.

    I think what’s missing from the good Dr’s proposed big idea are:
    1. Security for the seller.
    Security knowing that, even if they take all the measures to protect their belongings and assets, that they will not be stolen or destroyed.
    I think this can be fixed with
    a) a security deposit from the prospective buyers, held by Redfin
    b) surveillance equipment in the house – so any evidence of wrongdoing (or not) is captured.
    c) optional insurance of some kind – there’s travel insurance, car insurance, new home owner’s insurance. Not too much of a stretch for insurance companies to underwrite some sort of home-viewing insurance, perhaps?
    d) knowledge of the person viewing the house. The data collected by Redfin could be presented in a viewable format to the seller – of course not the SS#, but other submitted documents pre-approval status, bank letters, where they work, etc. Redfin could even build a viewing appointments calendar – one stop shop where buyers could submit their credentials, make appointments, wire their security deposits, and sellers can view appointments, approve appointments, manage appointments, file for claims, etc.

    That sounds like fun.

    Honestly though, even with all every precaution in place, if I put myself in a seller’s shoes, I probably would not do it unless the house was vacant. Maybe that’s just me.

  • geton

    I saw an article in the paper about the “open home bandit”, a guy who attends open homes and steals credit cards. It turns out I recognized him because he attended my redfin open home for the home I was selling. He tried to burgle me, but because my credit cards and valuables were locked up he had no such luck. It looks like he was targeting redfin and other by-owner open homes.

    I actually like the idea of verified identify for entry. Most of the people who attend conventional open homes won’t even leave their name and phone numbers, so we really don’t know who they are.

    Having someone swipe a credit card and verify that the driver’s license matches would actually be much more verification than we get today.

    The problem would be trusting the verifier. Ebay is notorious for looking the other way and even protecting frauds, simply because they don’t have any economic incentive to out them. You would have to have some system that provides an economic or other motivation for the verifier to do their job well.

  • http://www.bonzai.squarespace.com/blog Mike Farmer

    It could work if the seller wants to be bogged down with all the verifying and managing.

    The seller can also market the home online, complete all the paperwork and manage the process through closing.

    Have at it.

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