Finding the perfect house using open data

But for a buyer wanting to do his own research, and having lived in the area for a long time, they simply couldn't add any value besides unlocking doors, and filling out a stock form to make offers.

A seller won't accept an offer from a buyer that doesn't have evidence that they can afford what they're offering. The buyer's agent wants the offer to be accepted, so they won't let the buyer offer more than they're pre-approved for (and often somewhat less, to reduce risks that the deal will break down before closing.)

Once the offer is accepted, the bank inspection has to happen, and if the bank determines that the house is not worth as much as the buyer offered, the deal will fall through and neither agent gets paid. So, both agents have an incentive to keep the cost below what they think the bank valuation will be.

So it's really the bank that's in control of property values, not the agents. In a housing bubble that's a bad thing, because the bank is lenient in both pre-approvals and valuations, and agents incentives are to follow the bank upwards. But in the current climate when the banks are cautious and risk-averse I think the incentives are working well, because the banks and agents are countering each other.

As far as what the agents tell the buyer and seller about the price:

- If the house is sitting on the market and no one is making any offers, the price is too high. So yes, the sellers agent will tell the seller to reduce the price, because they want the seller to sell. (Getting the house to sell is the agent's job, after all.) Just sitting and waiting at the same price is bad for the seller, because it makes other agents and buyers think there's something wrong with the house if it has been sitting on the market for a long time with no offers.

- If a house is priced correctly, multiple buyers will want to buy it, and they'll all make offers. The buyer's agent knows that the seller will choose one of the higher offers (though price isn't the only factor), and they want their buyer's offer to be accepted (that's their job), so yes, they will tell the buyer to offer more. My wife will tell her buyers how many other buyers they're competing with that she knows about (agents can't discuss details, but can give vague impressions to help each other out), and that they should offer more than the list price but not so much that they would regret the amount afterwards. In other words "Offer what this house is worth to you, so that you won't wish you had offered more if you don't get it, and that you won't wish you had spent less if you do get it."

My mistake initially was to try to attack both sides of the realtor(tm) mix: seller and buyer brokers. I was clearly taking the seller side out. But I was willing to work with buyers' brokers if they found me. But I wanted to twist the commission scheme, as a flat rate doesn't make much sense. (e.g., an incremental $100K is huge for me but very little for them.) So I tried to create a stairstep where if they came in below ask, the broker would get paid .5%, and if they were 100K above ask they would get 3.5%. Needless to say, this failed. I had many brokers tell me they would refuse to bring clients to see my place, DESPITE their fiduciary duty to do so.

In the end, I offered 2.5% commission to buyers brokers (the standard in my area). I also listed it on the MLS using a shady site where you can pay to $150 bucks to a broker to list it on the MLS. Finally, I scraped the websites of 3 major brokerages in my area and did a mailing list to 100 brokers with the subject line of ADDDRESS X, 2.5% Buyer Commission. (100 brokers in 4 square miles. Should tell you something.) Had a 60% open rate and a 50% clickthrough rate. Lots of appointments right away.

I endeded up getting 9 offers and having a 2 step auction. I of course netted out what I would have to pay to brokers, so folks without brokers had an automatic 2.5% advantage. I ended up selling without a broker on either side. 3 weeks from first listing on Zillow to contract signed.

So yes - it's definitely possible to work without brokers if you're willing to do a little work, you're confident in your pricing skills, and you're in a hot area. As I said to my wife, each individual showing we did saved us about $2K!

About the only thing the buyer's agent did that was useful was cart away some household debris away in his truck after closing. It had been left behind in the garage. It probably would have cost me $40 to have someone do the same.