Live data from Hacker News

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

geekwire.com

241–250 of 329 posts

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

#241
I used what was termed a "transactional broker" when selling my previous home - I paid a flat fee of a few hundred bucks to them as the seller's agent, plus 3% to the buyer's agent. As the article mentioned, there's not much value driven by the selling agent - I managed all the showings via an app and we sold it in a week. The only real value to me as a seller is someone who can bring me a buyer (hence keeping that 3% commission). Buyer's agents also spend time taking clients to see houses and provide some assurance that people aren't arranging viewings just to steal your stuff, so I see a continued role there.

Honestly, I've rarely been impressed by the real estate knowledge of either type of agent. Their general incentive is to make a deal happen - "seller's" agents will often try to talk up a below market offer if it gets them a commission faster. Likewise, I've only met one realtor who I felt was really trying to get me the best deal as a buyer.

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

#242

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…

> it will be on a technology platform that takes 1%

1% sounds crazy expensive to me.

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

#244
post #169

Earlier quoted context omitted.

Expecting 3%/$30,000 k for being "someone that smoothes things out" on a sale of, let's say a $1M home in CA, is theft.

What if their knowledge of the market and negotiating helped you get an extra $60k in value on the sale of your home vs. selling it yourself?

Someone is paying. If the agent charges $30k + extra $60k you're saying buyers should avoid RE listed properties and buy direct.

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

#245

Earlier quoted context omitted.

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 cu…

There are ethical and practical reasons to avoid a system where buyers have a financial incentive to go without representation. In practice buyers without representation are unlikely to close, and sellers are unlikely to accept unrepresented sellers because the sellers agent would charge more money because. Neither the seller or the buy would save a substantial amount of money compared to the old system.

Yet somehow people still manage to buy and sell houses in the UK where buyers have no agent representing them. Buyers pay a fixed or hourly fee to a lawyer for conveyancing and sellers pay 1-1.5% to their listing agent. Overall costs seem to end up well under half that in the US (5-6% of sale price).

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

#246

Earlier quoted context omitted.

>(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.

Yes but such a crap shoot. And you'll easily spend $500 paying for one. Best advice I ever got was to just hire a general contractor to do it for roughly the same price. They find way more stuff and generally know the codes better. I've had inspectors miss huge structural problems that destroyed me later.

You may hit a roadblock as the sales contract may require that any inspection be performed by a "licensed home inspector" not a general contractor. Its just another siphon in the residential real estate pipeline.

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

#248
post #199

Real estate agents have three things they offer that until recently you could not get on your own. The first is listing on the MLS. The second is the MLS lockbox so other realtors can easily show the listed house. The third is access to the negotiated forms. All of these you can now get from a startup called Savvy Lane for a flat fee. We listed our house in Portland, paid Savvy Lane $495, and it sold 11 days later. I…

The catch is you don't know whether you under priced your house for that or well more than that unless you paid an appraiser or broker to help you set the price. Most FSBOs sell for under market.

You don't need an agent or broker to get an appraisal. In fact an agent arguably has a conflict of interest because a lower priced house will sell faster with little effect on their payout.

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

#249
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…

It may be a service people want but why do they almost all charge the exact same fee? The market would look less dysfunctional if they all competed on price as well as service.
Post reply on HN