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Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

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Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#71

Post by tres »

AtlasBarfed wrote: post #38
muhneesh wrote: post #22

I see at least three counterpoints: 1. Real estate agents aren't often "experts" at real estate valuation, inspection or execution; They have dependencies on appraisers, inspectors, and lawyers. The work an average agent does is more or less cookie-cutter from my anecdotal experience, though I think there is a proportion of rockstar agents that do much more. 2. Not every buyer wants homebuying to be a client-services…

"Good" real estate agents are interested in moving as many houses as quickly as they can, to gain as much vig revenue as possible. "Good" real estate agents from the buyers perspective would be slowing down sales, reducing the overall price they make a percentage on anyway (which is why fixed rate for a "class" of real estate would work better) as a disincentive. Why would a real estate agent dissuade someone from bu…

and the inspector is financially responsible for exactly the cost of the inspection.

No more.

I think you've really hit the nail on the head here. There's a built-in conflict of interest for the agent in every transaction.

They are rewarded by moving inventory, not serving their client.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#72

Post by jdross »

DevX101 wrote: post #36

Startup idea: Create OpenDoor for the National Association of Realtors with the NAR as a significant owner in the venture. You'd probably need to be an insider to pull this off. With their data advantage, they could kill or hobble OpenDoor the way AMC killed MoviePass. I don't feel excited about suggesting this, as I love the OpenDoor model and hope they win.

A couple of points of clarification: - All legal brokerages (including online only brokerages like redfin) get equal access to MLS data and systems. - NAR is hyper-conscious of antitrust issues. Data access is the crux of this, which is a major reason why Zillow and others get access to MLS data. NAR now promotes open data access - NAR, a trade group, is a 110 year old non-profit, with 501c6 status. IANAL but I don't think it can have an ownership stake in a for-profit venture

Opendoor operates a brokerage in every market it is live in, so they're not competing with NAR in any real sense. They're a part of the RE community, with same rights as any other agents

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#73

Post by gamechangr »

walrus01 wrote: post #21
calbear81 wrote: post #13

I've used buyers agents (1 traditional, 1 Redfin) when I've bought homes since they are being paid from the Seller's Fees and in most states I believe they are legally bound to act in your best interest. I've had a new construction seller try to convince me to not get an agent and would give a discount instead but felt that the risk wasn't worth it especially since most buyers agents I've engaged with have been open…

The other thing you should absolutely never do, as a buyer, is use a home inspector recommended by either the seller's agent, the seller themselves, or even your own buyers agent. Choose one yourself. Anything else and they have too much of an incentive to produce an inspection report that will result in a quickly closed sale.

My mother owns a residential real estate brokerage. She's siting next to me and thinks the previous post has misguided advise. She has been a broker for over 30 years.

She recommends that you always ask your agent for a home inspector recommendation.

"We pick the best home inspectors by the ones that performed the best in previous deals. We don't get $1 for recommendations. We wouldn't want to incase there was ever a problem down the road. Getting a high quality home inspector is much harder than it looks.".

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#74

Post by ilamont »

Spooky23 wrote: post #54
ilamont wrote: post #2

That's a bold statement. Still, the NAR has data that suggests realtors are more likely to be involved in transactions than 18 years ago: 87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001. Source: National Association of Realtors ( https://www.nar.realtor/research-and-statistics/quick-real-e... ) ... But I'm curious if the definition o…

> However, I think realtors have a demographic tidal wave about to hit them, consisting of first-time young home buyers and some slightly older home sellers who are used to doing things online and want nothing to do with realtor-mediated transactions ... or will scoff at the ridiculously high fees charged by brokers. No way. Find me the mythical millennial who wants to deal with a first-party negotiation. In some fan…

I get the due diligence part, which is where lawyers and inspectors come in. Not convinced realtors have to be the middleman facilitating those necessary transactions, let alone showing a home, making sure offers get to the seller, generating a list of comps from a database, etc., and charging huge fees to do it.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#75

Post by harryh »

sokoloff wrote: post #58
harryh wrote: post #27

Earlier quoted context omitted.

since they are being paid from the Seller's Fees This is a myth perpetuated by buyer's agents. Just because you aren't writing a check doesn't mean it doesn't come out of your pocket. It's like sales tax. It's collected and paid to the government by stores, but it makes everything you buy more expensive.

I agree with you based on who is bringing the money to the table, but in most cases, the seller has signed a contract with the listing agent stating the fee structure for the deal before you made an offer on the house. The seller has obligated themselves to that structure, so you're not saving money by doing it yourself. I found our house entirely myself, but brought in an agent on "my" side with whom I'd negotiated…

Is there a reason you didn't do the deal without an agent and specify in your offer that you wanted the entire 3 points rebated back to you (which is kind of silly accounting, but whatever)?

Certainly this would have been possible.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#76

Post by walrus01 »

gamechangr wrote: post #73
walrus01 wrote: post #21

Earlier quoted context omitted.

The other thing you should absolutely never do, as a buyer, is use a home inspector recommended by either the seller's agent, the seller themselves, or even your own buyers agent. Choose one yourself. Anything else and they have too much of an incentive to produce an inspection report that will result in a quickly closed sale.

My mother owns a residential real estate brokerage. She's siting next to me and thinks the previous post has misguided advise. She has been a broker for over 30 years. She recommends that you always ask your agent for a home inspector recommendation. "We pick the best home inspectors by the ones that performed the best in previous deals. We don't get $1 for recommendations. We wouldn't want to incase there was ever a…

Respectfully, I would ask if your mother has ever worked in a residential real estate market as overheated and bubble-like such as the metro Vancouver BC area.

Shadow-flipping, assignments, double dealing have become the norm here.

https://www.google.com/search?q=vancouver+real+estate+corrup...

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#77

Post by clairity »

ryaniscool wrote: post #33

Over the last two years I've bought a couple of properties and I see the value of realtors as professional negotiators and experts on real estate laws and contracts. That being said, the National Association of Realtors (NAR) and their local branches are the definition of a cartel. My parents owned a real estate agency when I was growing up in the 80s and 90s. Back then, the cost of selling and marketing real estate…

> "That being said, the National Association of Realtors (NAR) and their local branches are the definition of a cartel."

NAR was actually investigated by the federal government (FTC i think?), who concluded much the same, but lobbying buried the report and nothing came of it.

MLS's maintain power by strictly controlling access to information. they have the most up-to-date and the most detailed information about properties, buyers/sellers and sales transactions, among other things. this allows them to be the arbitors of deal flow, giving their members the advantage.

and this is the linchpin that props up the 6% commission rate. it's classic rent-seeking, since marketing costs have been dropping, as you mention. a truly competitive market would probably put the commission in the 1-2% range.

(i did my MBA thesis on disrupting the real estate industry)

edit: here's one, but i don't think it's the one i was thinking of: https://www.justice.gov/atr/competition-real-estate-brokerag...

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#78

Post by walrus01 »

ryaniscool wrote: post #33

Over the last two years I've bought a couple of properties and I see the value of realtors as professional negotiators and experts on real estate laws and contracts. That being said, the National Association of Realtors (NAR) and their local branches are the definition of a cartel. My parents owned a real estate agency when I was growing up in the 80s and 90s. Back then, the cost of selling and marketing real estate…

> Nowadays, the cost of listing a house is nominal for a brokerage. Advertising is free because all of the real estate sites that consumers visit (realtor.com, zillow) pull directly from MLS. All cameras are digital so you can take that perfect picture the first time. There are now phone apps that automate broker access to houses to show their clients.

There's a brokerage in Canada now called "1% Realty" which pretty much serves the purpose of getting your home onto the MLS, and doing some very basic sellers agent services. Its whole shtick is that its fee is literally one percent.

In my opinion that level of sellers-agent fee is much better aligned with the actual hours of effort, and operating costs on the part of the listing agent.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#79

Post by hkmurakami »

whitepoplar wrote: post #7
hkmurakami wrote: post #4

Earlier quoted context omitted.

Both redfin and Opendoor go through licensed brokers in each state so is agree with what you posit.

I thought Opendoor are themselves agents/brokers, no?

oops, I realize now that with the way I wrote that post, it reads (inaccurately and unintentionally) to mean that they go through a 3rd party, rather than my intent that one way or another a broker licence is involved.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#80

Post by gamechangr »

harryh wrote: post #75
sokoloff wrote: post #58

Earlier quoted context omitted.

I agree with you based on who is bringing the money to the table, but in most cases, the seller has signed a contract with the listing agent stating the fee structure for the deal before you made an offer on the house. The seller has obligated themselves to that structure, so you're not saving money by doing it yourself. I found our house entirely myself, but brought in an agent on "my" side with whom I'd negotiated…

Is there a reason you didn't do the deal without an agent and specify in your offer that you wanted the entire 3 points rebated back to you (which is kind of silly accounting, but whatever)? Certainly this would have been possible.

Curious..."how do you know "certainly this would have been possible?'

Which market/city are you referencing?

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