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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)

#291

Post by sharemywin »

notahacker wrote: post #144
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 of…

buy reps get usually get 3% so the money is coming out of the reps commission not what the seller is paying.

With a showing, you physically show up to a house to look at a house. I'm not talking about virtual or anything.

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

#292

Post by sgc »

cheerlessbog wrote: post #248
sgc wrote: post #199

Earlier quoted context omitted.

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.

I did mention that option. It is funny how some people are upset that agents might want to force the price up, and others that they might want to force the price down. Agents have a fiduciary relationship. They must look out for their client's best interests by law. Some are not great, some are not honest. But that is the same for any field.

In my experience most are honest and hard working, but the few with less scruples tend to be the highest volume agents. If someone were looking for an agent, if I knew nothing about anyone involved, I would recommend to start looking with agents with a number of years of experience but just average sales. A large reason for their average sales might just be integrity. Newer agents can be great as well because they will work three times as hard, but they are newer for better and for worse.

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

#293

Post by stevekemp »

laurencerowe wrote: post #245
gnopgnip wrote: post #193

Earlier quoted context omitted.

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).

I do often shake my head at the ideas of "normal" that different countries have.

I'm from the UK, but in Finland these days, and the way that both of these countries work is very similar.

In America a lot of things are very odd with regard for property, even common things like tenants paying rent by posting/delivering cheques!

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

#294

Post by lowercased »

pxeboot wrote: post #236
lowercased wrote: post #187

Earlier quoted context omitted.

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

No (under $100k). Based in NC, and the 'standard' here seems to be 8% (couldn't find anyone under 8%).

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

#295

Post by burfog »

lotsofpulp wrote: post #265
burfog wrote: post #231

Earlier quoted context omitted.

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.

In this case, bad measurements are OK. They average out over time. If the bias is one way, then one type of agent (seller or buyer) gets a bit more pay than the other, but this is not a disaster and is compensated by agents competing to work on the higher-paying side of the transactions.

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

#296

Post by conanbatt »

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.

Yes it is. Becuase the hard part is not selling it, its getting the listing. And you bet your ass that a the 10 million dollar home goes to the well dressed, swanky offices top ads agent, not your "aunt's best friend".

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

#297

Post by paulie_a »

dd36 wrote: post #229
lotsofpulp wrote: post #183

Earlier quoted context omitted.

One of the key functions of a broker is to provide plausible deniability, such as screening potential buyers who you think might waste your time or to avoid accusations of discrimination.

Brokers have to present all offers.

Legally the broker is presenting an off utilizing an agent. An extension of them essentially.

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

#298

Post by conanbatt »

lxe wrote: post #169
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…

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.

You dont need to use a realtor, its a voluntary transaction. If you find the price too high dont use them.

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

#299

Post by conanbatt »

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.

You are not counting how many realtors there are, and how hard it is to get that listing.

A new agent might not get a listing in an entire first year. In places like SF, its all about how good you are about generating leads, the house sells itself.

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

#300

Post by paulie_a »

GabeRicard wrote: post #277
guest2143 wrote: post #150

Earlier quoted context omitted.

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.

VOW, and IDX also. The whole reason that sites like Zillow, Redfin, etc. exist is because of the (successful) lawsuit against NAR causing them to open up their data to third party companies. I worked for a real estate company building an online real estate service since before the creation of VOW/IDX. Prior to that, the way we got access was through my boss's own real estate brokerage account with the state's main ML…

Oh god the horrors that are idx. I just had flashbacks of dealing with the various schemas from different MLSs
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