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Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

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Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#21

Post by rgbrgb »

chatmasta wrote: post #18

How are you different from redfin? Are you aiming for an acquisition by redfin or zillow?

RedFin is a great step towards making buying less expensive but they haven't innovated on the experience of buying at all. They give you a traditional agent experience for half the price. We let you submit an offer online and we're rifle focused on improving the offer/buy process. On a typical California home you'll save a lot more going with us. We charge a flat-fee rather than a percentage because it's just as much work to put an offer in and close on a $5M home as a $500k home.

And no, we are not aiming to get acquired any time soon! We're building a sustainable business with a very concrete revenue source. Hopefully it'll be the other way around ;).

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#22

Post by jschoenholtz »

aorloff wrote: post #19

There is a decent amount of information that the agent-to-agent communication around offer presentation delivers. Are the sellers more keen on price or on terms ? If its a fixer, is the buyer aware of that and is that reflected in their offer (because the sellers probably wouldn't want to waste time on a buyer who was going to be shocked to find out that its a fixer after getting in contract). Usually the buyer's age…

Great point - We deliver each offer personally and gather the exact information that you are talking about before finalizing each offer.

One of our main goals is to reduce the opacity in the process for our buyers. You've provided examples where the buyer benefits, but we also see private agent-to-agent communication used to drive up offer prices.

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#23

Post by ottocoder »

Great idea, I hope you do well!

One observation from a novice homebuyer (only bought once, never sold) is that I thought commissions only came out of seller's proceeds (of course price is marked up accordingly). The website says "buy a home commission free" but to me I would pay more notice if it said "sell a home commission free".

Of course if I'm wrong please take this as a data point that users need education :)

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#24

Post by harmmonica »

ottocoder wrote: post #23

Great idea, I hope you do well! One observation from a novice homebuyer (only bought once, never sold) is that I thought commissions only came out of seller's proceeds (of course price is marked up accordingly). The website says "buy a home commission free" but to me I would pay more notice if it said "sell a home commission free". Of course if I'm wrong please take this as a data point that users need education :)

You're totally right that the commission does come from the seller's proceeds, but since openlistings acts as a buyer's agent, they, traditionally, get half the commission once the deal closes. 500k sale price (yes, they exist outside the coasts!), 5% commission = 25,000. 25,000 split between the seller and buying agent = 12,500 per agent. Openlistings (I think) keeps 5,000 of the 12,500 and kicks the other 7,500 back to the buyer... and if you had to include that additional 7,500 as part of a 30-year mortgage they're saving you much more than 7,500 over the life of a traditionally-financed purchase. That said, you're also right that people need education on these things! The agents win (and consumers lose) if the transaction seems complex. Somehow need to make people realize the process is pretty straightforward.

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#25

Post by rgbrgb »

ottocoder wrote: post #23

Great idea, I hope you do well! One observation from a novice homebuyer (only bought once, never sold) is that I thought commissions only came out of seller's proceeds (of course price is marked up accordingly). The website says "buy a home commission free" but to me I would pay more notice if it said "sell a home commission free". Of course if I'm wrong please take this as a data point that users need education :)

You're right that it takes some education. Perhaps we should phrase it as money back rather than a lower fee.

The messed up thing about the percentage commission is that it provides financial incentive for the broker representing you to convince you to offer a higher price, both so that you close and so that the commission is higher.

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#26

Post by brw12 »

danielnaab wrote: post #16
rgbrgb wrote: post #14

Earlier quoted context omitted.

Point taken, thank you! We recognize that our pricing makes less sense outside of California but we're hoping to operationalize it here and make it really efficient before scaling to other markets where the fee will be lower. One misconception is that people think when they directly negotiate with a seller's agent that they aren't paying the full commission. In fact, when the house is priced, 5-6% commission is set a…

Is 100% dual agency the norm? The industry definitely seems pretty opaque in regards to these issues. In my circumstance, the seller agent's contract stipulated that the agent earned 50% the buyer agent's commission for buyers lacking an agent. That worked well for me, as the seller had lower commissions and her agent's interests were also aligned with me. But I admit that going into the transaction, I had assumed th…

in nyc, i know that dual agency is the norm. you see sellers' brokers mildly sabotaging offers from buyers' brokers sometimes for this reason. agencies like Corcoran have built very tidy businesses by being sellers' brokers and buyers' brokers at the same time, and act that way whether there is any actual buyer's broker relationship at all.

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#27

Post by rgbrgb »

danielnaab wrote: post #16
rgbrgb wrote: post #14

Earlier quoted context omitted.

Point taken, thank you! We recognize that our pricing makes less sense outside of California but we're hoping to operationalize it here and make it really efficient before scaling to other markets where the fee will be lower. One misconception is that people think when they directly negotiate with a seller's agent that they aren't paying the full commission. In fact, when the house is priced, 5-6% commission is set a…

Is 100% dual agency the norm? The industry definitely seems pretty opaque in regards to these issues. In my circumstance, the seller agent's contract stipulated that the agent earned 50% the buyer agent's commission for buyers lacking an agent. That worked well for me, as the seller had lower commissions and her agent's interests were also aligned with me. But I admit that going into the transaction, I had assumed th…

The norm in California is for both the buyer and seller to be represented by their own agents. About 10% of transactions in California are dual agency.

We take the full buyer's commission and refund it back to the buyer at close minus our fee.

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#29

Post by aorloff »

jschoenholtz wrote: post #22
aorloff wrote: post #19

There is a decent amount of information that the agent-to-agent communication around offer presentation delivers. Are the sellers more keen on price or on terms ? If its a fixer, is the buyer aware of that and is that reflected in their offer (because the sellers probably wouldn't want to waste time on a buyer who was going to be shocked to find out that its a fixer after getting in contract). Usually the buyer's age…

Great point - We deliver each offer personally and gather the exact information that you are talking about before finalizing each offer. One of our main goals is to reduce the opacity in the process for our buyers. You've provided examples where the buyer benefits, but we also see private agent-to-agent communication used to drive up offer prices.

Very interesting. Yes I agree these private communications can drive up prices.

Re: Open Listings (YC W15) Is Helping Homebuyers Hack Real Estate

#30

Post by SoCool »

rgbrgb wrote: post #12
CoreSet wrote: post #8

Earlier quoted context omitted.

Hi guys. Cool site. Quick question - and I completely understand if you can't answer - any more details on your plans for expanding MLS coverage, or particulars on your current data arrangements? Just curious because I know some realtors and it seems like the barrier to a national MLS equivalent has been opposition by industry organizations wanting to protect their data. Any thoughts?

Getting MLS data is hard. We had to become a registered California brokerage and join individual MLS organizations as participating agents. Each MLS runs on different servers with slightly different SOAP/XML APIs and slightly different data formats. We're ingesting from 3 right now in real-time. We're planning to get full CA coverage this way in the next month or so (CA is 15% of the national real estate market). We…

Doesn't the MLS feed follow the RET specification ?
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