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Redfin Turns Profitable, Real Estate Industry Shudders

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Re: Redfin Turns Profitable, Real Estate Industry Shudders

#11

Post by mikeryan »

Shooter wrote: post #8
tokenadult wrote: post #4

Earlier quoted context omitted.

I learned that the good agents DO serve a purpose. What is that purpose?

A GOOD real estate agent performs various professional tasks requiring expertise that save you time and money, protect your interests, and keep you out of trouble, at a cost that is less than doing it yourself. Kind of like a GOOD lawyer (I noticed your JD) or a good accountant. You can do it yourself...just like you can fix your own car or plumbing, but the results may not always be what you intended. It may SEEM li…

I don't disagree that there's some value to having an agent. But as someone looking to buy in the Bay Area, the amount realtor's (particularly buyer's realtors) get paid relative to the work they put in, is all out of whack.

Finding houses is easy, that's what MLS listings do. So that leaves the hidden "gotchas" in the actual sale process, For a buyers agent to get 3% of an $800,000 home is ridiculous. I'd rather pay a lawyer $500/hr to do the 10-20 hours of work closing a deal.

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#12

Post by jacquesm »

edw519 wrote: post #10
jacquesm wrote: post #6

Earlier quoted context omitted.

Realtors in the US/Canada make far too much money on the transactions.

6% may have made sense when houses cost $25,000. Now that houses cost 10 times as much, do they have 10 times the work on one deal? I didn't think so.

In the Netherlands it's limited by law to 1.85% or so.

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#13

Post by wglb »

tokenadult wrote: post #4
Shooter wrote: post #3

Earlier quoted context omitted.

EVERY industry needs to evolve along with technology or suffer the consequences. I think there should be far few real estate agents working in the US. And that the level of innovation should dramatically increase. But agents will not become a completely endangered species in the foreseeable future...certainly not within the next 10 years. The best agents will just become better at their jobs and BENEFIT from technolo…

I learned that the good agents DO serve a purpose. What is that purpose?

Customer service. I have had the same real estate agent since 1997 and have done four transactions with her during that time. All have been in the same local area, which she knows extremely well. The in-depth knowledge of the community, how a house will resell after you bought it, the unwritten history of some of the homes comes into play. Additionally her helpful tenacity got a house sold under very difficult circumstances that I thought made the sale impossible.

Granted, this might be rare, but the lesson for the real estate agents is that customer service can give them an edge in competitive environments.

And while that commission might look rather large, the last time I bought a house we looked at something like 20 houses, so you need to figure that into the agent's cost.

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#14

Post by phatboyslim »

Given my last experience with a realtor, and hearing similar stories from others, I can't say I'm surprised that a website is doing a better job than a good number of them.

I'm not going to blanket stereotype, but when certain realtors are basically just setting up MLS feeds, and then forwarding matching listings to a client, how do they assume that someone couldn't program a site to do the same thing?

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#15

Post by wglb »

mikeryan wrote: post #11
Shooter wrote: post #8

Earlier quoted context omitted.

A GOOD real estate agent performs various professional tasks requiring expertise that save you time and money, protect your interests, and keep you out of trouble, at a cost that is less than doing it yourself. Kind of like a GOOD lawyer (I noticed your JD) or a good accountant. You can do it yourself...just like you can fix your own car or plumbing, but the results may not always be what you intended. It may SEEM li…

I don't disagree that there's some value to having an agent. But as someone looking to buy in the Bay Area, the amount realtor's (particularly buyer's realtors) get paid relative to the work they put in, is all out of whack. Finding houses is easy, that's what MLS listings do. So that leaves the hidden "gotchas" in the actual sale process, For a buyers agent to get 3% of an $800,000 home is ridiculous. I'd rather pay…

I have done by-owner transactions twice--it was lots of fun. The lawyer time in each case was not more than two or at most three hours. If it is more than that, there is something unexpected.

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#16

Post by encoderer »

mikeryan wrote: post #11
Shooter wrote: post #8

Earlier quoted context omitted.

A GOOD real estate agent performs various professional tasks requiring expertise that save you time and money, protect your interests, and keep you out of trouble, at a cost that is less than doing it yourself. Kind of like a GOOD lawyer (I noticed your JD) or a good accountant. You can do it yourself...just like you can fix your own car or plumbing, but the results may not always be what you intended. It may SEEM li…

I don't disagree that there's some value to having an agent. But as someone looking to buy in the Bay Area, the amount realtor's (particularly buyer's realtors) get paid relative to the work they put in, is all out of whack. Finding houses is easy, that's what MLS listings do. So that leaves the hidden "gotchas" in the actual sale process, For a buyers agent to get 3% of an $800,000 home is ridiculous. I'd rather pay…

When I was in school still I was a researcher for an appraisal firm. Mostly commercial but also a great deal of jumbo-loan-sized residential business.

One of many lessons learned was that most the best properties never make it onto MLS.

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#18

Post by shiranaihito »

jacquesm wrote: post #12
edw519 wrote: post #10

Earlier quoted context omitted.

6% may have made sense when houses cost $25,000. Now that houses cost 10 times as much, do they have 10 times the work on one deal? I didn't think so.

In the Netherlands it's limited by law to 1.85% or so.

You Win :)

That's just a really sensible solution to this "problem".

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#19

Post by anamax »

mikeryan wrote: post #11
Shooter wrote: post #8

Earlier quoted context omitted.

A GOOD real estate agent performs various professional tasks requiring expertise that save you time and money, protect your interests, and keep you out of trouble, at a cost that is less than doing it yourself. Kind of like a GOOD lawyer (I noticed your JD) or a good accountant. You can do it yourself...just like you can fix your own car or plumbing, but the results may not always be what you intended. It may SEEM li…

I don't disagree that there's some value to having an agent. But as someone looking to buy in the Bay Area, the amount realtor's (particularly buyer's realtors) get paid relative to the work they put in, is all out of whack. Finding houses is easy, that's what MLS listings do. So that leaves the hidden "gotchas" in the actual sale process, For a buyers agent to get 3% of an $800,000 home is ridiculous. I'd rather pay…

> I'd rather pay a lawyer $500/hr to do the 10-20 hours of work closing a deal.

Where does buying a house require 10 hours of paperwork? (It seems endless while you're doing it, but it's way less than 10 hours and almost all of the paperwork is canned.)

Do you really think that a lawyer has 10 hours of expertise that's relevant to buying the typical house? (How many houses have you bought?)

Re: Redfin Turns Profitable, Real Estate Industry Shudders

#20

Post by noonespecial »

sielskr wrote: post #5

Summary of the article: Redfin reimburses 50% of the fee they receive back to the buyer. And Redfin charges the seller a $5,000 - $7,000 flat fee. In contrast when the buyer and the seller of a million dollar house use traditional Realtors, together the Realtors take about $50,000 or $60,000 of the transaction. Finally, here is a comment from the Techcrunch article: I was an active Realtor for 8 years and I’m glad to…

This is really all up to the seller. When we listed out house (albeit in a very different real estate climate), we decided we wanted to get about $300,000. When informed that I'd really be getting $276,000 after "commissions and fees" I simply said, "No you misunderstand, we want $300k for this house."

What actually transpired was that it listed for more than 300k (but not 24k more) and both the seller's and eventually buyer's agents decided to take less commission to make a quick sale.

These numbers aren't carved in stone. Everything is negotiable. You just have to ask.

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