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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)

#141

Post by whyaduck »

imbusy111 wrote: post #131
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…

I fail to see how they are overpaid. If someone sells 4 houses per year for 1M for 1.5% fee, that's only $60k per year. That sounds like a mediocre income in markets where houses even go for 1M. I am using numbers for the Bay Area that I have heard of. Maybe other markets are different.

An average of 3 months to sell a single $1M house in the Bay Area? $60k sounds like it would translate to a pretty good hourly rate.

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

#142

Post by imbusy111 »

jonny_eh wrote: post #135
imbusy111 wrote: post #131

Earlier quoted context omitted.

I fail to see how they are overpaid. If someone sells 4 houses per year for 1M for 1.5% fee, that's only $60k per year. That sounds like a mediocre income in markets where houses even go for 1M. I am using numbers for the Bay Area that I have heard of. Maybe other markets are different.

The going rate is 2.5% to both the selling agent and the buying agent, each.

Even if we ignore the expenses, that's only $100k/yr in an area where $117k/yr is below poverty line for 4 person family.

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

#143

Post by StillBored »

tres wrote: post #71
AtlasBarfed wrote: post #38

Earlier quoted context omitted.

"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.

I've forgone the home inspection during the most recent transaction. In the previous few houses, I've found things immediately after the sale, which the home inspector didn't find. OTOH, they find tons of trivial things that frequently don't matter (or are just plain wrong).

And of course, while they might be able to tell you if they find termites, or foundation problems, they aren't actually doing a deep analysis, so they will themselves tell you to get an engineer or termite inspector if your concerned about those things. AC/mechanical problems are in the same boat. The inspector will tell you something like "the AC is 15 years old, but has a 15 degree drop" (something you can discover yourself in 30 seconds with a picture of the nameplate) and a thermometer. Actually measuring the subcool/superheat, no way. The latter will actually give you a good idea about the state of the machine.

Making the seller pay for a home guarantee for the first year is probably a far more effective way to spend money. Although again, don't use them until you know whats going on. Your AC gets warm, they are just as likely to send a guy that looks the other way, pumps a 1/2 lb in the system and kicks the problem down the road a few months.

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

#144

Post by notahacker »

sharemywin wrote: post #29

I bought a domain name a while ago bid2show.com The idea was let sales people offer a discount on their fee in exchange for limiting the number of houses you look at. So, if you make an offer on this house your shown you get 1-2 % discount. And since the system would know how many houses you've looked at it the realtors may decide to offer less and less of a discount. You would only need to work with one real estate…

If I'm understanding correctly, the basic principle doesn't work for an online service - any sensible buyer registers to look at houses in someone else's name, then takes the 2% discount on the "first" house they look at in their own name. Even if you stopped this on your own platform, other means of looking at houses exist.

Plus I hate to think what would be wrong with a house or its starting price for vendors to offer a 2% discount (that's ~2% of their net worth for a lot of homeowners) for people not to consider any alternatives.

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

#145

Post by aidenn0 »

germinalphrase wrote: post #128
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.

Usually they do; specifically the MLS has a listing type for before the house is on the market that only agents can see.

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

#146

Post by imbusy111 »

whyaduck wrote: post #141
imbusy111 wrote: post #131

Earlier quoted context omitted.

I fail to see how they are overpaid. If someone sells 4 houses per year for 1M for 1.5% fee, that's only $60k per year. That sounds like a mediocre income in markets where houses even go for 1M. I am using numbers for the Bay Area that I have heard of. Maybe other markets are different.

An average of 3 months to sell a single $1M house in the Bay Area? $60k sounds like it would translate to a pretty good hourly rate.

Better than $15/h minimum in some cities, but definitely not 'extremely overpaid'. Note the 60k is for a year, not a single house.

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

#147

Post by goseeastarwar »

imbusy111 wrote: post #142
jonny_eh wrote: post #135

Earlier quoted context omitted.

The going rate is 2.5% to both the selling agent and the buying agent, each.

Even if we ignore the expenses, that's only $100k/yr in an area where $117k/yr is below poverty line for 4 person family.

Where is your 4 homes per year stat coming from? It's extremely low.

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

#148

Post by smileysteve »

paradygm wrote: post #55
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.

Disclosure: my spouse is a home inspector It's a bit extreme outright dismiss an inspector just because they are recommended by your own agent (there is no reason whatsoever to even ask the selling agent for such advice). After all, you've hired them for their expertise and advice, and they see and know a lot more home inspectors than you. Of course, look at the recommended inspectors and do your own homework, like a…

While the inspector recommended by your agent might be fine, there is an implied incentive/bias for the inspector to help close the sale;

The recommending agent is a marketing arm for the inspector; if the wrong deal falls apart because of the inspection, the inspector knows the agent isn't going to get their commission, whether or not that means they'll recommend them with as much fervor the next time can be largely dependent on how badly the agent needed the money that time.

But, by hiring without an agent referral; the inspector has no incentive to approve a house that shouldn't be approved; you're not going to be the new marketing arm. Indeed, absent a relationship with an agent, the inspector has an interest in inspecting as many properties for you as possible, and therefore finding as many deal breakers as possible.

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

#149

Post by imbusy111 »

irq wrote: post #137
imbusy111 wrote: post #131

Earlier quoted context omitted.

I fail to see how they are overpaid. If someone sells 4 houses per year for 1M for 1.5% fee, that's only $60k per year. That sounds like a mediocre income in markets where houses even go for 1M. I am using numbers for the Bay Area that I have heard of. Maybe other markets are different.

All of the full time real estate agents I know sell WAY more than 4 hours per year.

It is an approximate number I have heard myself from agents directly.

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

#150

Post by guest2143 »

clairity wrote: post #77
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 prop…

Nothing came of it? The whole Virtual Office Website (VOW) thing got created.. before meetings NAR and RESO intone legalese about encouraging competition. There's a lot of fear that the FTC will step back in and do something. With the level of MLS balkanization, innovation has a bunch of high hurdles.
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