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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)

#261

Post by nikanj »

I do not know what the fizz buzz test for a RE agent would look like, but I've met so many agents who would fail one.

This is Canada, so the rules are slightly different. However, I do not find it unreasonable to expect an agent to know that you can't get a CMHC backed mortgage for 1) homes with a fixed-term renter tenant in them 2) homes with age restrictions 3) homes on leased land.

Our agent repeatedly found us "perfect homes", just to learn after writing the offer that no bank is willing to fund the transaction.

I think the general public refuses to admit that good agents exist, and the RE industry refuses to admit that absolutely garbage agents also exist.

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

#262

Post by JamesBarney »

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…

> a truly competitive market would probably put the commission in the 1-2% range.

This depends a lot on the price of the house. Selling a million dollar home isn't 10 times more work than selling a $100,000 condo.

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

#263

Post by a_imho »

JamesBarney wrote: post #262
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…

> a truly competitive market would probably put the commission in the 1-2% range. This depends a lot on the price of the house. Selling a million dollar home isn't 10 times more work than selling a $100,000 condo.

And handling a money transaction is mostly orthogonal to the amount yet many (most?) are charged as base fee + percentages.

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

#264

Post by lotsofpulp »

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…

The justification is that you did end up paying 8% instead of doing it yourself, so it was worth 8%.

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

#265

Post by lotsofpulp »

burfog wrote: post #231
robnagler wrote: post #227

Earlier quoted context omitted.

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…

A bad measurement is worse than no measurement. The appraiser’s estimate may or may not (likely not in hot or cold markets) off a useful benchmark.

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

#268

Post by C1sc0cat »

laurencerowe wrote: post #239
walshemj wrote: post #117

Earlier quoted context omitted.

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.)

What does that have to do with how much an estate agent/relator charges

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

#270

Post by bencollier49 »

cheerlessbog wrote: post #250
tim333 wrote: post #44

Purplebricks have done quite a good job of disrupting the UK property market.

For those unfamiliar, what do they do?

Online estate agent (real estate broker in US terms, I think). You list your house on their website and stick their sign outside your house, and then pay a fixed fee (£900 apparently).
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