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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)

#121

Post by iwantedjusttom »

As a realtor for the past 6 years I can say a couple of quick things as to why I don't see the real estate industry going anywhere, even though I think that real estate brokers are extremely overpaid.

- selling your house, at the end of the day, is quite the undertaking. A lot goes into it, it can get emotional, messy, and sometimes quite complicated. Having someone that does it on a daily basis can be nice and really smooth things out.

- people are too attached to their homes emotionally. More often than not, when trying to sell on their home without a realtor they will not have it in a saleable condition and price it too high for the marketplace. It will sit and not sell, or they will get an offer that is appropriate and be offended and not sell it. A GOOD broker will bring facts, data, and logic to the table so that a person that is actually committed to selling their home will get the job done.

If people saw their homes for what they were when they decided to sell them, a product or a piece of property and nothing more, the real estate industry would die in no time at all.

Then again, there are a lot of swindlers out there too, so it's nice to have someone as back-up to watch out for those types of things as well.

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

#122

Post by zaroth »

StillBored wrote: post #113
clairity wrote: post #77

Earlier quoted context omitted.

> "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 prop…

Part of the problem is that most realtors want it that way. I live in Austin, and the push for a few years now has been to have a "silent market" where a buyer picks a "full service" realtor (AKA full commission), and gets a week or so jump on properties being listed in the MLS. This gives them a better chance to get the property before the MLS hordes descend and start bidding it up. The part I've never understood is…

Perhaps a pocket listing isn’t paying the Buyers Agent half of the fee, so saving 3% right there. Depending on the market that may be worth it versus going to the broad market and having to pay both sides of the commission.

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

#123

Post by unclebucknasty »

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…

>commission structure is almost identical to what it was 30 years ago

Not to mention housing prices have greatly outpaced inflation and real wages over that same period.

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

#124

Post by StillBored »

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…

Add to that the title company which actually does much of important legwork of getting all the ducks in a row, and doing the research and insuring the transaction. I've never had a real-estate agent that did much more than recommend inspectors/mortgage companies/etc. In the end I've never actually used any of the recommended people because I've been able to find better deals on my own. Pretty much once the title company is named, its more a case of relaying all the information to them where they distribute it to interested parties.

AKA, much of what you think your real-estate agent was doing was likely the title company. Even more so from the perspective of the seller.

https://smallbusiness.chron.com/duties-roles-title-company-2...

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

#125

Post by secabeen »

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…

The buyer doesn't see the cost, although 3% goes to the buyer's agent, it all comes out of the seller's proceeds. As such, there's a lot less incentive for a buyer to go without an agent.

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

#126

Post by jessaustin »

amatai wrote: post #110

IMO, agents are not almost always not acting in buyer's interest. The percentage based commission is twisted in getting the buyer to bid for as much as they can pull. So, realtors at least for buyers, not such a great value, other than getting you access to lock box to view a property.

That may be true for simple home purchases, but I know some active real estate investors and they really value the services of buyer's agents. These guys don't buy something in the hopes that it will appreciate in future. They buy something only when they know they're stealing it. ("Victims" vary: could be an out-of-touch heir, an overextended builder, a bank that's held onto a repo for 11.5 months...) On the day of the closing, they've already made their money. The right buyer's agent knows the business, the locale, the seller, everything he needs to know. When asked, however, he doesn't know his employer's name. That's valuable.

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

#127

Post by sokoloff »

harryh wrote: post #100
sokoloff wrote: post #81

Earlier quoted context omitted.

The contract that I signed to sell another property specified that the full commission was due from the seller regardless of buyer representation , but that any registered real estate agent working on behalf of the buyer would share equally in the commission, paid by the listing agency. IOW, I don't think it would have been possible, as it wouldn't have been possible in my listing contract. If I thought it was possib…

Seller's contracts are so weird in that they specify a 2x difference in fee depending on whether the buyer has an agent or not. SO WEIRD.

From the seller's perspective, the fee is the same. The seller wants a piece of property sold and is willing to pay a certain commission and signs a contract to make that happen. They're paying for an outcome not an input, effort, or number of mouths fed/hands out.

Whether it sells to Abel who has a traditional agent, Baker who has a buyer's agent, Charlie who uses an agent who happens to be at the listing agent's agency, or Dave who doesn't have any agent at all, doesn't change the seller's commission charge, which seems roughly reasonable and aligned with the value the seller received.

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

#128

Post by germinalphrase »

iwantedjusttom wrote: post #121

As a realtor for the past 6 years I can say a couple of quick things as to why I don't see the real estate industry going anywhere, even though I think that real estate brokers are extremely overpaid. - selling your house, at the end of the day, is quite the undertaking. A lot goes into it, it can get emotional, messy, and sometimes quite complicated. Having someone that does it on a daily basis can be nice and reall…

Do realtors have any advantage when it comes to seeing the listing for properties before they are visible on the common real estate website (zillow et al)? I always assumed it was so, but I’d love to hear one way or another.

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

#129

Post by trevor-e »

Spooky23 wrote: post #50
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…

Most of the appraisers, inspectors and attorneys are filling a compliance role. The reality is the real estate person usually drives the process. Good ones know which appraisers to call and which inspectors to avoid. There's no real professional ethics involved, so most of them have arrangements with preferred folks whom they get referral fees from. (It's one of the reasons why home inspectors are almost completely u…

>(It's one of the reasons why home inspectors are almost completely useless.)

I think this is more accurately "home inspectors recommended by the realtor". Home inspections are extremely useful, so long as they are working in your best interest.

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

#130

Post by smolsky »

mediaman wrote: post #102
picodguyo wrote: post #97

I've bought and sold on separate occasions through Redfin and saw no difference between their service for 1% and my previous transactions with a traditional realtor for 5%. They both took me around to see properties, provided neighborhood and property insights, acted as my negotiating proxy, and guided the closing process. I don't understand how Redfin can charge so little, but as it stands today I wouldn't dream of…

Redfin charges 1% for selling the house. They still pay 3% to the buyer's broker. The total fee is therefore 4%, versus the normal 6%, where both sides get 3%.

Also, Redfin gave me 1.5% back when I bought a house. Ka-ching!
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