Finding the perfect house using open data • Hacker News Board

Re: Finding the perfect house using open data

#71

Post by DougWebb » Tue, Jun 10, 2014, 4:43 AM UTC

burntsushi wrote: post #65

declan wrote: post #64

Earlier quoted context omitted.

These are fair points. I've met Patrick in person and used to follow patrick.net a while ago (>4 years ago), but the discussion threads appear to have gone downhill a bit. But as someone else pointed out, there are some FAQs there that provide a useful counter to the conventional wisdom. Also it looks like Patrick now has a book out you can buy on Amazon.com: http://www.amazon.com/Housing-Trap-Buyers-Captured-Yoursel…

You make a good point. The site is off putting, but it's worth it to spend a little time investigating. I'll check out the link that huherto gave me and maybe take a look at the book. > It's also a very illiquid purchase, meaning it's difficult to sell and you need it to appreciate ~7% just to make back what you paid (that's because of Realtor(tm) commissions). Indeed. Realtor commissions are a huge drag. I do somewh…

If you're purchasing a house that you intend to stay in for a long time, reducing the cost of your mortgage as much as possible will save you far more money than the Realtor commissions will cost. The interest on a mortgage can easily double the cost of a home, and for the first ~third of the lifetime of the mortgage your monthly payments will be more interest than principal.

You reduce the cost of a mortgage by making a larger down payment, especially if you pay more than 20% in cash. You also want to avoid 'points' (which are just more interest) and to get the lowest interest rate you can. (A very good credit score helps a lot.) If you go for a variable-rate mortgage, read the fine-print very carefully; you want to make sure that the rate can't go up more than a reasonably small amount or more often than a reasonably long period.

You should also consider a lot of the non-purchase costs involved in home ownership. I wish the commissions had been the most significant expense I faced. Remodeling, repairs, improvements, decorating, re-decorating, and general maintenance added up to a large multiple of the commission I paid over ten years. And living in NJ, my property taxes have rising to nearly as much as my mortgage payments after a decade! I had never planned for any of that when considering what I could afford to buy.

Re: Finding the perfect house using open data

#72

Post by mdaniel » Tue, Jun 10, 2014, 4:57 AM UTC

frandroid wrote: post #51

bicknergseng wrote: post #22

Earlier quoted context omitted.

I personally actively dislike Trulia/Zillow. More scams there than on Craigslist even.

What kind of scams?

I don't know explicitly what kind of scams the parent commenter was intending, but I can say as an apartment shopper there are plenty of listings for apartments that appear as either just below market rate or sometimes $1000 below market rate. When you email them, they will request one of two things: a tenant application form which will amazingly request your SSN or bank account details, or they will request a cashiers check for "holding the apartment" or a "viewing fee."

Don't get me wrong, when I write those out in English here, they seem absolutely a scam, but the way they are presented as an answer to some of the apartment inquiries, it's not so obvious. Those scumbags are skilled, too, just not in any kind of skill one would want to possess.

Re: Finding the perfect house using open data

#73

Post by rahimnathwani » Tue, Jun 10, 2014, 6:26 AM UTC

DougWebb wrote: post #70

rahimnathwani wrote: post #55

Earlier quoted context omitted.

I don't buy this. In the UK, there is usually only a single agent (acting for the seller) rather than two, and total commissions are _much_ lower than the 6% which I understand is standard in the US. Furthermore, commissions are negotiable, and the market for estate agents (what you call realtors) is competitive. There's nothing different about buyers/sellers needs that's fundamentally different in the USA. The high…

In the US, each state sets it's own guidelines for licensing Realtors and the general rules for how they run their business. In New Jersey, commissions are typically 5% to 6%, depending on the level of service the agent representing the seller performs. My wife charges 6%, and spends a lot of her own money on cleaning the house, moving extraneous furnishings out to de-clutter the house, moving her own furnishings in…

Thanks for the additional detail. A few random thoughts which struck me as I read through:

- it's hard to believe it's 3-5 months' work to sell a home (unless you mean duration rather than effort)

- why does the 'brokerage' get so much? What value do they add, or is it just like taxi medallions?

- yes, we all have to pay taxes

- why do the no-frills brokers no longer exist? I've read elsewhere that full-service agents refused to steer their buyers to homes on offer by discount agents (to the detriments of the buyers they purported to represent)

- why do realtors need licensing anyway?

Nothing you've said suggests that the 6% is the result of a competitive market. Again, the strongest evidence is the large difference in commissions vs. those in other developed markets.

Re: Finding the perfect house using open data

#74

Post by dshensky » Tue, Jun 10, 2014, 6:27 AM UTC

kaylarose wrote: post #32

cjoh wrote: post #2

The biggest users of the open data movement are, in fact, real estate professionals. It's companies like Trulia and Estately and Zillow and what not that are actually taking open data from government and putting it to good use. It'd be interesting to see some kind of startup come out of this. Though it's fairly hands-on, real estate is still a fairly hands on market, and with real estate lobbying being what it is, it…

I don't know if Redfin uses the same feeds, but their update times seem vastly superior to Trulia, Zillow & Estately. After spending 1 1/2 years trying to find a house in a turnkey-scarce market, and using RedFin (after it launched in our market a few months ago), Estately, Zillow, and Trulia in parallel - this was the killer feature of Redfin for me. For instance, I knew an offer we had made on a house was going to…

they all get their info from the same place. Redfin just updates more frequently than the other sites.

Re: Finding the perfect house using open data

#75

Post by ars » Tue, Jun 10, 2014, 6:31 AM UTC

burntsushi wrote: post #65

declan wrote: post #64

Earlier quoted context omitted.

These are fair points. I've met Patrick in person and used to follow patrick.net a while ago (>4 years ago), but the discussion threads appear to have gone downhill a bit. But as someone else pointed out, there are some FAQs there that provide a useful counter to the conventional wisdom. Also it looks like Patrick now has a book out you can buy on Amazon.com: http://www.amazon.com/Housing-Trap-Buyers-Captured-Yoursel…

You make a good point. The site is off putting, but it's worth it to spend a little time investigating. I'll check out the link that huherto gave me and maybe take a look at the book. > It's also a very illiquid purchase, meaning it's difficult to sell and you need it to appreciate ~7% just to make back what you paid (that's because of Realtor(tm) commissions). Indeed. Realtor commissions are a huge drag. I do somewh…

> I get the feeling it would be financially better to start smaller, and then incrementally add to the house as we accrue the necessary capital to do it.

From my experience with other people who have thought like this, this is a mistake. One person wanted a 2 story addition, but couldn't afford it - so they put in a 1 story addition, but built the foundation so it could handle 2.

Needless to say they never added that second level even though they had funds - once you've paid for the roof, and the equipment and everything else (i.e. startup costs) adding that second level would have been just a small addition, but doing it now means starting over and the expense is no longer worth it.

Others have done that, but found the interface where the two connect to shift, which is unpleasant. Or the styles don't match.

Instead, build all the rooms you want, with exterior walls and roof, but don't finish the inside - no wires, no drywall, no doors, nothing except insulation, not even windows (when it's time for windows you just cut the exterior and add blocking on the inside). Close that section off from the rest of the house, and then when you have funds, and need, build it out.

The interior costs a significant amount, but the startup costs are much smaller than for exterior.

Note a possible problem: The inspector may object, I don't know.

Re: Finding the perfect house using open data

#76

Post by ars » Tue, Jun 10, 2014, 6:35 AM UTC

DougWebb wrote: post #70

rahimnathwani wrote: post #55

Earlier quoted context omitted.

I don't buy this. In the UK, there is usually only a single agent (acting for the seller) rather than two, and total commissions are _much_ lower than the 6% which I understand is standard in the US. Furthermore, commissions are negotiable, and the market for estate agents (what you call realtors) is competitive. There's nothing different about buyers/sellers needs that's fundamentally different in the USA. The high…

In the US, each state sets it's own guidelines for licensing Realtors and the general rules for how they run their business. In New Jersey, commissions are typically 5% to 6%, depending on the level of service the agent representing the seller performs. My wife charges 6%, and spends a lot of her own money on cleaning the house, moving extraneous furnishings out to de-clutter the house, moving her own furnishings in…

> There are strict rules regarding this situation to avoid conflicts of interest, btw.

And those rules don't work in the slightest. Both agents have incentive to increase the cost of the house, but really the buyers agent should help reduce that cost.

Additionally both agents have incentive to get the deal done, even if it's not financially right (for either party) so they'll tell the seller to reduce the price, and the buyer to increase it, even though they should each really be working in the other direction.

Re: Finding the perfect house using open data

#77

Post by smackfu » Tue, Jun 10, 2014, 1:13 PM UTC

zippergz wrote: post #34

kaylarose wrote: post #32

Earlier quoted context omitted.

I don't know if Redfin uses the same feeds, but their update times seem vastly superior to Trulia, Zillow & Estately. After spending 1 1/2 years trying to find a house in a turnkey-scarce market, and using RedFin (after it launched in our market a few months ago), Estately, Zillow, and Trulia in parallel - this was the killer feature of Redfin for me. For instance, I knew an offer we had made on a house was going to…

Redfin is an actual real estate brokerage, and are therefore real members of the MLS, with access to the data that provides. The others are simply scraping via publicly available data. This is a major difference.

Is it a major difference, or just a matter of timeliness? The actual data that Zillow etc. has seems identical to any other service, and the same as the printouts that realtors give out that they are printing from MLS.

Re: Finding the perfect house using open data

#78

Post by mrfusion » Tue, Jun 10, 2014, 1:28 PM UTC

atourgates wrote: post #11

toomuchtodo wrote: post #4

Earlier quoted context omitted.

Don't forget http://www.redfin.com ; their presentation of properties with the associated public data is beautiful. No association, just a huge fan.

Redfin really is a great real-estate app. A few years ago, I shopped for a home in an area that Redfin serviced. The data they had and the way the presented it made it easy to find the house we wanted, and figure out what we would be comfortable paying for it. A few weeks ago we closed on a house in a non-Redfin serviced area. The shopping experience was night and day. Here, none of the local MLS databases, or Zillow…

Was this comment corporate sponsored?

Re: Finding the perfect house using open data

#79

Post by mrfusion » Tue, Jun 10, 2014, 1:34 PM UTC

declan wrote: post #50

DougWebb wrote: post #41

Earlier quoted context omitted.

I'm married to a Realtor, so I've had plenty of direct access to the local MLS system, and also I've overheard many conversations between my wife and her clients about Zillow. From what I've seen and heard, Zillow's data isn't just delayed by a week; it can be years out of date, and grossly inaccurate as well. Both buyers and sellers are very mislead about property values based on Zillow because they see the last sal…

Folks here should check out http://patrick.net/ , run by a SF bay area programmer, for an opposing view on the necessity and desirability of Realtors(tm). In terms of the MLS, at least in California, which has the largest one, it's run by Realtors(tm) for Realtors(tm). The board members are Realtors(tm); so are the "34 REALTOR® Associations" that are the MLS's customers. You can see crmls.org for more details. In ter…

If the real estate test/license is so easy, I've always wondered if savy buyers could "become real estate agents" and then show themselves properties?

As far as I'm concerned the only value agents provide is unlocking doors at houses you want to view. (Source: I've bought 3 houses with three different agents.)

Feel free to email me if you want to chat, I'm sure there are some great start up ideas in the space.

Re: Finding the perfect house using open data

#80

Post by DougWebb » Tue, Jun 10, 2014, 2:06 PM UTC

mrfusion wrote: post #79

declan wrote: post #50

Earlier quoted context omitted.

Folks here should check out http://patrick.net/ , run by a SF bay area programmer, for an opposing view on the necessity and desirability of Realtors(tm). In terms of the MLS, at least in California, which has the largest one, it's run by Realtors(tm) for Realtors(tm). The board members are Realtors(tm); so are the "34 REALTOR® Associations" that are the MLS's customers. You can see crmls.org for more details. In ter…

If the real estate test/license is so easy, I've always wondered if savy buyers could "become real estate agents" and then show themselves properties? As far as I'm concerned the only value agents provide is unlocking doors at houses you want to view. (Source: I've bought 3 houses with three different agents.) Feel free to email me if you want to chat, I'm sure there are some great start up ideas in the space.

Getting a license is just the first step; you have to associate yourself with a brokerage to do the things agents do, and there's a cost to that.

If your agents haven't done anything for you but unlock doors, then you haven't had good agents. Like any other profession, there's a huge range in quality and competence, and finding a good agent requires some research and probably recommendations from past clients.