Zillow CEO: startups trying to disrupt real estate commissions will fail (2012) • Hacker News Board

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

#151

Post by xahrepap » Wed, Jan 16, 2019, 11:29 PM UTC

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…

What you said reminds me of what the piano guy told us when we asked him to bid out my wife's childhood piano for a full restoration. "If Pianos weren't sentimental, I'd be out of business." We could buy a decent babygrand or a really nice upright for the same price. But there's just something about having a home with furniture from your past in it.

When I sell my house, it'll be 100% with a realtor. Is it expensive? Yes. But my home is quite sentimental to me. I don't know enough to break down that barrier. I'd rather pay someone else to do it for me. I look at comparable homes in my area and I think, "my house is $50k better than that." But I honestly don't know. :)

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

#152

Post by KingMachiavelli » Wed, Jan 16, 2019, 11:29 PM UTC

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.

The key factor is that you don't have to sell houses where you yourself live.

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

#153

Post by kbos87 » Wed, Jan 16, 2019, 11:31 PM UTC

Having just gone through a grueling year long search for a home, I absolutely see the value in having a realtor as a buyer, and I have to say I’d be happy to pay for one if I were on the sellers side.

Yes, some of a realtors transactions are probably cookie cutter, simple, and mundane work that a buyer or seller could have carried out themselves. The challenge is you don’t know when that isn’t going to be the case. We ended up in more than a few situations where having someone in our corner who had “seen some s#+?” was hugely valuable.

The argument that “hey, we live in this society where people like to do stuff online and therefore real estate agents are on the chopping block!” just doesn’t hold true. In some cases a human being is the most effective way to deliver the kind of tailored, personal, convenient service that people seem to also want more of.

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

#154

Post by SteveGerencser » Wed, Jan 16, 2019, 11:33 PM UTC

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.

Every property we have ever purchased, except the first one, was not on the open market and the result of an agent/broker "knowing someone" that had what we wanted and managing to work out a deal for us.

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

#155

Post by whyaduck » Wed, Jan 16, 2019, 11:33 PM UTC

imbusy111 wrote: post #146

whyaduck wrote: post #141

Earlier quoted context omitted.

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.

Not my point. How could anyone possibly spend 40 hours a week for 3 months to sell a single home at that price in that market? It's not a realistic characterization of the job.

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

#156

Post by sbov » Wed, Jan 16, 2019, 11:35 PM UTC

ams6110 wrote: post #67

sauwan wrote: post #60

Earlier quoted context omitted.

I think this is pretty misguided. 3% of $100,000 is $3,000. Many housing purchases will be more than that, but let's just talk over $3k. Some people will be very comfortable with dealing with negotiations, pricing their house (the quasi-ethical can even talk to a few realtors before hand to get their opinion), and doing the paper legwork. Just because someone chooses to use their time and effort rather than forking o…

When you're buying, a realtor will never tell you that you are overpaying -- it would be less commission for them and greater chance the seller will reject or counter the offer which creates more work for them. When you're selling, they will always tell you that you are priced too high. They want a quick sale with minimal work. I've used realtors on the buy and sell side of the first house I owned. I was disappointed…

There's lots of things like this spoken about real estate agents that kinda make sense if you view humans as 100% money driven logic machines, but these are not the way humans necessarily behave.

Our real estate agent certainly told us if she thought a house was overpriced. And she told us when she thought we should avoid a house and why - e.g. one was a questionable "flip", another had a huge tree a bit close to the house that we didn't notice (think of the foundation).

We ultimately went for the cheapest house we saw. We had 20% more in our budget but the real estate agent was fine showing us houses that fit our parameters but were less expensive than what we could afford. I did some looking for houses to see too, and when I asked her about those she would say why she didn't show them to us.

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

#157

Post by kbos87 » Wed, Jan 16, 2019, 11:36 PM UTC

cletus wrote: post #42

People love to complain about realtors. Companies like Redfin have been trying to disrupt this market for years. People on HN and other places like to complain that realtors are pointless and that the only reason they exist is they are entrenched. I posit a different theory, which may well be controversial here, and that is that realtors continue to exist--and charge large commissions doing so--because they provide a…

This is dead on. The HN crowd that prefers to buy on their own based on objective measures and data they can find on a property is a tiny minority. Most people want and need human guidance in a complicated situation like buying a house.

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

#158

Post by StillBored » Wed, Jan 16, 2019, 11:37 PM UTC

clairity wrote: post #139

StillBored wrote: post #113

Earlier quoted context omitted.

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…

> "Part of the problem is that most realtors want it that way." absolutely. the cartel doesn't help the top 2% of agents, because they're good enough to earn the 6% (or higher) anyway, but the monopoly works because the overwhelming majority of interested stakeholders benefit. (that's not to imply that most agents are lazy though. a stat i dimly recall is that only about 10% of agents make enough to be full time.)

Well its a pyramid scheme like many of the state licensed businesses. The low level agents have to work for a broker who soaks up the majority of the commission. Only after being an indentured slave for a few years do they get the "privilege" of themselves becoming a broker. The problem is that once that happens no one will hire you, so your on your own for finding clients/advertising/etc. That takes capital most low level agents haven't managed to accumulate working for someone else. So its likely they need a significant other/whatever to support them while they build the business while competing with the larger agencies that have the money to plaster signs down the freeway and run advertisements.

Given some luck/skill and a lot of hard work, maybe they become large enough to start hiring agents themselves, and the cycle repeats.

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

#159

Post by rhizome » Wed, Jan 16, 2019, 11:42 PM UTC

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.

The Principal-Agent Problem: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...

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

#160

Post by njarboe » Wed, Jan 16, 2019, 11:45 PM UTC

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…

Seems to me that having the commission as a % of the sale price is not the right way to go. You lock in with an agent for 3 months and agree to pay them a set fee when they/you sell it. You should pay as a buyer for an agent to represent you. Currently, if I'm not mistaken, all most all agents get paid by the seller and, if you are a buyer, the agent has no legal responsibility to watch out for your interests.

The current situation exist due to a slow long-term evolution of events but seems like won't change any time soon. Sort of like how wage controls during WWII encouraged businesses to pay for your health care and it is not taxed, but you don't get that tax break when you pay for it yourself. An insane situation, but next to impossible to change.