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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)

#231

Post by burfog »

robnagler wrote: post #227
burfog wrote: post #192

Earlier quoted context omitted.

The trouble is, your incentives are all wrong. If the house would not sell at $900000, would sell in 15 months at $800000, or would sell in 3 months at $700000, or would sell in 2 weeks at $600000, what do you do? You try to sell it for $600000. You tell the owner that that is what the home is worth, even if the owner is not in a hurry. Getting your share of the 6% (likely 1.5%) of $600000 in 2 weeks is better than a…

This Freakonomics-style argument doesn't work. The only price that matters is the market clearing price. Appraisers don't know that more than anybody else. The only thing an independent appraiser would do is use (well-known) comps to anchor the price, which is not something a seller wants. Rather, a seller wants competition among buyers. I used to think that real estate agents were a waste of time until I lived throu…

You seem to have missed the point of the appraiser.

The market clearing price is not set in stone. It is determined partly by the actions of the agents.

The appraiser's estimate of the market clearing price would set a measuring point from which the agent's performance can be measured. Agents are then paid according to how their performance exceeds the expectation.

Without the appraiser's estimate, the performance of the agents can not be measured. There is no way to reward good performance or punish bad performance. The agents are simply collecting their cut of the transaction.

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

#232

Post by evancox100 »

vonmoltke wrote: post #223
iakh wrote: post #218

Earlier quoted context omitted.

Purchase price is not public in all states

It isn't? What states don't put that information in the property tax records?

Texas for one. No duty by either buyer or seller to report the sale price.

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

#233

Post by sokoloff »

brightball wrote: post #221
sokoloff wrote: post #49

Earlier quoted context omitted.

> Practically, the #1 reason to use a realtor is that if there is an issue with the home that should have been known ahead of time, there is a chain of insured entities that provides legal recourse. Other than title insurance (which is separate from and in addition to the 5-7% commission), what's the insured risk that could possibly be worth that percentage?

Hidden damage to the house that wasn’t found in an inspection and not disclosed by the seller. Low level water or termite damage that can’t be seen because a layer of wall was built in front of it. Just as an example.

How often do those issues come up and what is the typical recovery? I’d guess under 1% and maybe $25K, implying a value of $250. The commission on my house was over 200 times that figure, making for incredibly overpriced insurance if that’s the primary value the fee brings.

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

#234

Post by benmorris »

Having bought and sold quite a few houses now I can say I won't go down the FSBO route anymore. I successfully bought my first house this way, but selling it was a train wreck. Not fun dealing with selling your own home at all. I eventually listed it with a realtor and sold it a few weeks later.

Later in life though spending larger amounts of money on a home I would always recommend finding a good realtor. Someone friends/family can recommend. There are just hundreds(if not thousands) of pitfalls to buying or selling a home.

On a different note I did have the opportunity to build several data driven local realtor sites a few years ago. They were deceptively simple looking on the surface, I mean all you do is sort and filter house results right? The process of syncing to the RETS system proved to be really clunky and complex. Imagine building a site on top of a database you have to query to discover the tables, fields, and datatypes, and oh by the way it could CHANGE SCHEMA at any time. If your broker was part of multiple MLS (Multiple Listing Services) then you could have to deal with completely different structured DBs. I handled these issues by building a normalized table for listings I could map the data into. MLS data was pulled into a 1:1 mapping table of the same name upon querying the schema. I had to build a Sql Script generator to create the tables. It was very frustrating dealing with schema updates.

The whole process was interesting to me though as to how your listing data is handled when you list a house for sale and how others can gain access to it. Long story short you have to pay to play. Zillow for example is paying (or should be) to access your for sale listing data once entered in the a regional MLS. This is likely several thousand a year conservatively (per MLS). This gains them the right to access the data, however, many times these agreements are 20-30 page legal documents. My first time seeing one of these was extremely uneasy (I nearly didn't sign it). Again fascinating in the case of Zillow I know for a fact they are violating this agreement in our particular region when they hold onto listing data and images past the duration of a listing (sold or removed). They simply just keep it indefinitely it appears. On the other hand keeping up with 100+ MLS agreements across the US would be impossible as well.

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

#235

Post by pxeboot »

vonmoltke wrote: post #223
iakh wrote: post #218

Earlier quoted context omitted.

Purchase price is not public in all states

It isn't? What states don't put that information in the property tax records?

In Texas I was able to lookup the original mortgage amount on a house, but not the actual purchase price.

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

#236

Post by pxeboot »

lowercased wrote: post #187
garagemc2 wrote: post #167

Earlier quoted context omitted.

Wow, in the UK it is about 1 - 2%.

Came here to say the same thing. My wife is from UK, and she's ... well, pissed at the expenses here (besides healthcare). We are in the process of selling some land, and the default for land is 8% . WTF. You don't "show" it. You don't stage it, or model it, or deal with keys or codes or anything else. But there were no realtors we spoke to who wavered from 8%. I suppose we could possibly have done DIY, maybe... ? Bu…

That much have been for relatively expensive land. I have seen 10% commissions for land under $50k

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

#237

Post by brightball »

sokoloff wrote: post #233
brightball wrote: post #221

Earlier quoted context omitted.

Hidden damage to the house that wasn’t found in an inspection and not disclosed by the seller. Low level water or termite damage that can’t be seen because a layer of wall was built in front of it. Just as an example.

How often do those issues come up and what is the typical recovery? I’d guess under 1% and maybe $25K, implying a value of $250. The commission on my house was over 200 times that figure, making for incredibly overpriced insurance if that’s the primary value the fee brings.

I guess it depends on the cost of your house. Everything is relative.

You can always negotiate a flat rate with a realtor too.

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

#238

Post by Gibbon1 »

lowercased wrote: post #187
garagemc2 wrote: post #167

Earlier quoted context omitted.

Wow, in the UK it is about 1 - 2%.

Came here to say the same thing. My wife is from UK, and she's ... well, pissed at the expenses here (besides healthcare). We are in the process of selling some land, and the default for land is 8% . WTF. You don't "show" it. You don't stage it, or model it, or deal with keys or codes or anything else. But there were no realtors we spoke to who wavered from 8%. I suppose we could possibly have done DIY, maybe... ? Bu…

I'd just get to know your local title company and list it as for sale by owner on the various real-estate sites.

In the US the title company does _all_ the actual work in a sale. And takes _all_ the liability. Everyone else is a middle man.

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

#239

Post by laurencerowe »

walshemj wrote: post #117
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…

30 years ago in the UK 2 or 3% was the norm one has to ask why it was double

Because interest rates were much higher back then (12% vs 0.5% now) so house prices were a lower multiple of wages. (Mortgage payments tend to be similar to rent, so higher rates mean lower prices.)

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

#240

Post by thomasjudge »

vonmoltke wrote: post #223
iakh wrote: post #218

Earlier quoted context omitted.

Purchase price is not public in all states

It isn't? What states don't put that information in the property tax records?

Montana for another. There have been attempts to change that which have all failed in the face of industry lobbying and (more importantly) a Republican controlled legislature
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