Zillow to Acquire Trulia for $3.5B • Hacker News Board

Re: Zillow to Acquire Trulia for $3.5B

#101

Post by balor123 » Mon, Jul 28, 2014, 6:37 PM UTC

caw wrote: post #68

chaosphere2112 wrote: post #37

Earlier quoted context omitted.

I'm in the process of buying my first home, and it's been hugely helpful to have an agent. Services include: - Tours of homes; seeing something online and seeing something in person is an impressive difference. Some houses look amazing online and terrible in person, or vice versa. Cannot possibly overstate the value of this. - Negotiation; he's a professional negotiator, and he has years of experience negotiating in…

I'm also in the process of buying a home for the first time, and did some search on Trulia/Zillow. It was OK, but the data gets really stale. One home was sold already before it was taken down. I did find out that Houston has a really nice site, har.com that lets you do basically everything Trulia & Zillow does. Realtors have other interface(s) into the same data, which lets them do different things like N sided poly…

We had this trouble as well. Our Realtor helped us find a nice infill development by a very flexible builder. He knew we were FTHB that needed hand holding. He dumped us on them and didn't show up until the deal almost fell apart. We did ok on the functional upgrades but botched the design. We're now faced with doing a full house remodel of a brand new house :(

Re: Zillow to Acquire Trulia for $3.5B

#102

Post by nawitus » Mon, Jul 28, 2014, 6:38 PM UTC

mooreds wrote: post #91

nawitus wrote: post #74

Earlier quoted context omitted.

The way the market works in Finland is that the seller almost always pays for a real estate agent, mainly to draft contracts, give tours of the property and so on. Negotiation is pretty simple typically, the buyer just makes an offer, I don't know what's more to it. I can see that a real estate agent for the buyer gives value, but I wouldn't personally pay much for it. Not 3% at least, that seems like a huge waste of…

There's a similar way to work without a real estate agent in the USA--you just hire a real estate lawyer who takes care of contracts and whatnot and you pay them a flat fee. I'm always curious how other markets work (and aware that the USA is one of the few RE markets with buyer's agents). Is there an inspection period? Are most homes bought outright, or are loans taken out to purchase them? Does the seller's agent d…

> Is there an inspection period?

No. However, the seller is responsible for 'hidden problems' for five years after the sale. I would guess that most of these cases go to court, and are only for serious problems like mold.

> Are most homes bought outright, or are loans taken out to purchase them?

Loans are typically taken.

>Does the seller's agent do any marketing (newspaper ads, open houses, etc)?

Yes, the seller's agent typically does all the marketing. Mostly newspaper ads, online real estate listings and open houses.

>What does the seller's agent usually get in terms of compensation (a percent of the sales price, a fixed fee)?

It's usually a percent of the sales price, and around 2-4%. In recent years fixed feeds have become popular (€3-4k).

--

The one thing that sucks most about the Finnish real estate market is the 'transaction tax'. It's 2%-4%, paid by the buyer (but first-time buyers are exempt), which means that moving often is discouraged.

Re: Zillow to Acquire Trulia for $3.5B

#103

Post by rgbrgb » Mon, Jul 28, 2014, 6:40 PM UTC

chatmasta wrote: post #23

I interned for Redfin last summer. This is a really interesting space, and most people don't realize that Zillow/Trulia are operating drastically different businesses from Redfin. Some background: The US real estate industry is broken up into regions (e.g. SF bay area, Orange County, Lake Tahoe, etc.). In order for a brokerage [1] to operate in a region, it needs to employ agents specifically licensed in that region,…

This is a great analysis. I'm working on a real estate platform right now [1] and learning the ins and outs of data regulation has been a huge hurdle. As far as I know Trulia and Zillow use lagged and incomplete listings aggregators (e.g. ListHub) and a lot of realtors think their pay-to-play model is hostile to the industry.

To get realtor quality data as a non-brokerage involves convincing each MLS that we're realtor positive and won't cut out agents. There seems to be a lot of fear in this industry that realtors will go the way of travel agents if more tech is introduced. A few of the investor-types we've talked to have tried to push us towards a model that has that potential but, as a lot of people in this thread have noted, we think realtors are providing a lot of value that can't be commoditized so easily.

[1]: http://www.openlistings.co/

Re: Zillow to Acquire Trulia for $3.5B

#104

Post by chollida1 » Mon, Jul 28, 2014, 6:48 PM UTC

ssanders82 wrote: post #86

I trade stocks as a hobby and I was wondering what I'm missing here. This morning Zillow offered .444 shares of Z for TRLA. Currently (1:50 pm EST) TRLA is trading at only a 0.411 valuation of Z. What's to stop me from shorting Z and buying TRLA to lock in the difference as profit? It seems both have agreed to the 0.444 ratio. Is it a regulatory issue? What else would cause the deal to fail?

Look into merger arbitrage. Its a huge area that has spawned many hedge funds, including the one I work at.

The difference is the market saying the deal might fall apart.

Some issues with shorting:

- very limited borrow, not much more than 2 million.

- very concentrated borrow.

- the spot rate for us to borrow is 2-3%, but with such a small amount of float avaiable to borrow the chances are high that you won't be able to get any and you won't pay anything close to 3%

Here is a good primer:

http://www.barclayhedge.com/research/educational-articles/he...

Re: Zillow to Acquire Trulia for $3.5B

#105

Post by balor123 » Mon, Jul 28, 2014, 6:49 PM UTC

A question for the RE insiders here. What restrictions are there for building services off Redfin/MLS and Zillow listings?

Am I allowed to blog about listings or do I need to be an agent to use image and listing data? I get mixed opinions elsewhere about whether this falls under fair use.

I notice that Redfin provides OpenGraph annotations but the TOS disallow sharing. Am I permitted to share on Facebook, Pinterest, etc? What about on other websites? Is it possible to build a vertical search engine based on these details?

Re: Zillow to Acquire Trulia for $3.5B

#106

Post by w4 » Mon, Jul 28, 2014, 6:52 PM UTC

calbear81 wrote: post #87

bzbarsky wrote: post #76

Earlier quoted context omitted.

chatmasta is talking about the _buyer's_ agent. In the US real estate market, the buyer's agent is typically paid a percentage of the sale price. So the buyer's agent has an incentive to convince the buyer to pay a higher price. They of course also have an incentive to convince the buyer to buy quickly, for the reason you said. Oh, also the _seller_ is typically the party that actually pays the buyer's agent. Yes, th…

When I was buying my house, I considered not using a buyer's agent because the condo seller said that they could handle both ends of the deal and save me some money. I thought about it and read more into it and eventually decided against that because a buyer's agent is legally required to represent your best interests as the buyer whereas the seller is representing the other party. Buyer's agents are required to disc…

> I...decided against that because a buyer's agent is legally required to represent your best interests as the buyer whereas the seller is representing the other party

This actually depends on if your state's regulations permit dual agency or not; some states, e.g. Massachusetts, permit one agent to represent both parties. Other states, like Florida, forbid it due to the potential conflict of interest.

Either way, though, avoiding dual agency is probably a good call. It's fraught with potential problems, and even if the agent cuts perfectly square corners, the quality of representation will still suffer since the agent must keep both parties in mind at all times.

Re: Zillow to Acquire Trulia for $3.5B

#107

Post by Zelphyr » Mon, Jul 28, 2014, 7:05 PM UTC

chatmasta wrote: post #23

I interned for Redfin last summer. This is a really interesting space, and most people don't realize that Zillow/Trulia are operating drastically different businesses from Redfin. Some background: The US real estate industry is broken up into regions (e.g. SF bay area, Orange County, Lake Tahoe, etc.). In order for a brokerage [1] to operate in a region, it needs to employ agents specifically licensed in that region,…

I also am hoping Redfin wins this battle but, in part, for a different reason. The model that Zillow/Trulia work on is rife with scammers. I almost got caught up in one myself on Zillow. And were it not for the bad PR they get that'd be more than happy to allow the scam listings since that only generates more page views for them.

Even notifying Zillow of the scam listing wasn't enough to get it removed. I had to keep replying to them by email and post on social media just to get them to look at the listing to see it was posted by a scammer. Which tells me they generally look the other way unless forced into addressing scams. Sure, they do some analysis on listing prices and alert you when its unusually low but that's clearly not enough.

Re: Zillow to Acquire Trulia for $3.5B

#108

Post by toomuchtodo » Mon, Jul 28, 2014, 7:12 PM UTC

chatmasta wrote: post #34

smackfu wrote: post #27

Earlier quoted context omitted.

Isn't the MLS run by the real estate agents that RedFin is trying to disrupt? >They depend on real estate agents manually inputting their listings into the Zillow/Trulia platforms Are you sure that Zillow isn't just scraping the MLS data from broker sites?

> Isn't the MLS run by the real estate agents that RedFin is trying to disrupt? Redfin is disrupting the brokerage model of paying agents price-based commission. As far as I can tell, they are happy to use the existing MLS for listing data, and then put a nice interface on top of it. > Are you sure that Zillow isn't just scraping the MLS data from broker sites? Oh, I'm sure they are. But they can't reasonably do this…

> Redfin is disrupting the brokerage model of paying agents price-based commission. As far as I can tell, they are happy to use the existing MLS for listing data, and then put a nice interface on top of it.

Not only that, but they're storing the data forever. You can see every time a property is listed, the price changes, status changes to contingent, sale prices, everything.

You don't get that with the MLS system.

Re: Zillow to Acquire Trulia for $3.5B

#109

Post by Cybernetic » Mon, Jul 28, 2014, 7:23 PM UTC

It will be interesting to see how the home value estimates play out. Zillow and Trulia each have their own methodology for determining a home's value and the disparity between the value of each service lists can be significant.

I purchased a home two years ago in Portland, OR (South East). At the time of my purchase, its price on Zillow was listed as ~$70K less than it was appraised for (I had two appraisals and both were within $1K of one another). Trulia listed the value within $1K of the two appraisals.

In two years time, the value on Zillow is listed as the original purchase price. On Trulia, the value is ~$60K more (it is based on an average appreciation of 8% annually of homes in my neighborhood).

I know a home's value is only what someone is willing to pay for it, but the disparity in estimates between those two services has always bothered me.

Re: Zillow to Acquire Trulia for $3.5B

#110

Post by Jemaclus » Mon, Jul 28, 2014, 7:33 PM UTC

Cybernetic wrote: post #109

It will be interesting to see how the home value estimates play out. Zillow and Trulia each have their own methodology for determining a home's value and the disparity between the value of each service lists can be significant. I purchased a home two years ago in Portland, OR (South East). At the time of my purchase, its price on Zillow was listed as ~$70K less than it was appraised for (I had two appraisals and both…

Most of the difference is likely just a matter of data. If Trulia has better data than Zillow, their estimate will likely be closer to reality. There is the added difficulty of coming up with what's basically one methodology that has to work everywhere. My guess is that if you're in a funky place, like on the border of two neighborhoods, or if you're in a rural area, your estimates are likely to be further from reality than if you live in a cookie-cutter subdivision or in a downtown area.

The point is: yes, it's frustrating, but it's also complicated.