What Zillow doesn't want you to know about its listing gap • Hacker News Board

Re: What Zillow doesn't want you to know about its listing gap

#111

Post by aggieben » Tue, Oct 06, 2015, 9:34 PM UTC

rconti wrote: post #107

toomuchtodo wrote: post #91

Earlier quoted context omitted.

Would I use them to sell? Maybe. Would I use them to buy? Most definitely. As mentioned further down in this thread, buyer's agents have every incentive for the buyer to pay as high a price as possible (due to RE commission structure). I want someone earning a fee on my transaction because they got me the best price (as either buyer or seller). Price of a service can be a form of signaling, but paying more for someth…

Depends on the market. In a competitive market, I want my agent to be as dedicated as possible, not one taking a smaller cut. We won a 13-offer bidding war on a financed deal with only a SLIGHTLY higher price than the 2nd place, all-cash offer. anything could have made the difference in the deal, and I'm more than happy to throw another 10k at the agent to have it locked down. You're right that traditional agents hav…

> but so does a Redfin agent

I don't see how - and anyway, a buyer's agent can be a big waste of money in a lot of markets. Traditional single-family housing transactions aren't that complicated, and a great many buyers could handle one on their own just fine. I applaud _any_ effort to undermine the NAR.

Re: What Zillow doesn't want you to know about its listing gap

#112

Post by aggieben » Tue, Oct 06, 2015, 9:36 PM UTC

kanzure wrote: post #109

codingdave wrote: post #104

Earlier quoted context omitted.

This has been discussed ad nauseum by insiders to the industry for close to 10 years now. Nobody has yet pulled it all together, not for lack of trying, but because of the one major roadblock that you mentioned -- actually going to look at homes. Everything else can be put online, and most of it already is online in one form another, just not always through a single vendor. I know I'm simply expanding on what you alr…

> I know I'm simply expanding on what you already said, but ... one way or another, you have to go look at a house that you intend to buy. And you don't want the seller there. So you need someone who is trusted by the seller to let you in. So... I am not familiar with this problem. But what about drones to fly inside and snap pics?

The problem is not one of physically opening doors. The issue is one of trust. Having drones opening doors instead of an agent doesn't really solve that problem - not to mention that lots of people wouldn't go for that.

Re: What Zillow doesn't want you to know about its listing gap

#113

Post by nosuchthing » Tue, Oct 06, 2015, 9:40 PM UTC

encoderer wrote: post #90

toomuchtodo wrote: post #83

Earlier quoted context omitted.

You just listed all the reasons Redfin ( https://www.redfin.com ) is killing it. Their value proposition is that their agents aren't paid on commission, they're paid on your satisfaction. Their website is also very data-intensive compared to MLS sites (which create information asymmetry between buyers, sellers, and brokers due to how they're setup).

Otoh, are the very best agents going to work for rf and make less money? Redfin looks like modern KW to me. Most great agents don't want to undersell their own industry. And while there are many markets where a mediocre agent will do, I wouldn't take that chance in sf, la, Nyc, Miami, etc

What differentiates real estate agents in terms of "skill"?

It seems like their access to information of products available for sale would be the only useful service a from a real estate company. Of course, granted knowledge of which houses are available, helping the buyer find something they like is important but could this not be done with a google street view type system?

Re: What Zillow doesn't want you to know about its listing gap

#114

Post by aggieben » Tue, Oct 06, 2015, 9:42 PM UTC

rdtsc wrote: post #66

bcg1 wrote: post #61

Sold my house this summer. My wife listed the house on Zillow and took nice looking pictures and put a good description. We also paid a real estate agent $300 to list our house in the MLS (and we would handle the rest of the sale). Once our listing was in the MLS Zillow brought in the crapified compressed JPEGs from the MLS feed and overwrote our description etc, and locked us out from further edits. Fail. Zillow is…

NAR is a strong lobby, they will fight tooth and nail to keep their position. Million + realtors are betting their livelihood on having a hold on buying and selling homes, and are not going to let that go easily. Here is allegedly their letter to the president in 2011 (not related to Zillow but basically how they can throw their weight behind issues): http://www.ksefocus.com/billdatabase/clientfiles/172/3/1359.... At…

There will never be a deal. NAR's prosperity absolutely depends on their exclusive control of market access. Professional licensing is the single reason why this market sucks donkey balls.

This is also why I would heartily support a total deregulation of real-estate-related professional licensing. It simply isn't that complex a task, and it doesn't really require much training to be competent at most transactions - and particularly the one kind of transaction you want to do. Anyone and everyone should be legally allowed to represent someone in selling or buying real estate.

In that world, the NAR continues to exist as a sort of "credibility certification", which I would fully support. But they shouldn't get to use the government to keep competitors out.

Re: What Zillow doesn't want you to know about its listing gap

#115

Post by brudgers » Tue, Oct 06, 2015, 9:49 PM UTC

toomuchtodo wrote: post #91

encoderer wrote: post #90

Earlier quoted context omitted.

Otoh, are the very best agents going to work for rf and make less money? Redfin looks like modern KW to me. Most great agents don't want to undersell their own industry. And while there are many markets where a mediocre agent will do, I wouldn't take that chance in sf, la, Nyc, Miami, etc

Would I use them to sell? Maybe. Would I use them to buy? Most definitely. As mentioned further down in this thread, buyer's agents have every incentive for the buyer to pay as high a price as possible (due to RE commission structure). I want someone earning a fee on my transaction because they got me the best price (as either buyer or seller). Price of a service can be a form of signaling, but paying more for someth…

Real-estate commissions don't incentivize squeezing out a maximum sale price. They incentivize closing the sale over everything else. For example:

  Assume 7% commission.
  Assume 50/50 buyer/seller agent split.
  Assume 40/60 broker agent split.
  Assume sale price of $190,000
  Buyer agent commission = $3990
  Assume market value of $200,000
  Difference from market value is $10,000
  Total commission $700 on $10000 sale price
  Net difference to seller $9300
  Net difference to buyer's agent $210

The $210 needs to be discounted for the risk that the higher price will cause the sale not to close or create some other form of opportunity cost.

Re: What Zillow doesn't want you to know about its listing gap

#116

Post by stephengillie » Tue, Oct 06, 2015, 9:53 PM UTC

imroot wrote: post #70

Getting and keeping real estate listings up to date is a big pain in the ass. There's no standardized residential listing data, and while you might get RETS feeds or data dumps from the MLS nightly, it's still on you to ensure that all of the information is parsed correctly and displayed in accordance to the MLS'es standards (or risk being cut off). Often, MLSes have terms in their contract that say that regardless o…

It's a nightmare. I used to work for one of the industry dinosaurs; they have an MLS team that was as large as their development team. They pull data from over 600 MLSes, with different requirements for each. Managing 600 business contacts is a big pain, then there are different data conventions that change without notice. They have had a long-standing arrangement to feed data to Trulia too.

The word is most MLSes use CDNs, so scraping might not be the best way.

Re: What Zillow doesn't want you to know about its listing gap

#117

Post by codingdave » Tue, Oct 06, 2015, 9:55 PM UTC

w4 wrote: post #73

gshx wrote: post #71

If Zillow can solve the "problem" of putting all the docs (disclosures, inspections, offer docs, title docs later on, etc) up with the listing along with making a network of handymen (to help out with prettifying a house for sale), most buyers and sellers will be happy to pay them 0.5-1% instead of the seller having to pay the agents 4-5%. There's generally not a whole lot of work in buying or selling a house includi…

This is all a great idea - but state laws wouldn't permit it (I work in the industry). Most of the features you described, and the fee structure associated with them, would be in violation of real estate licensing laws. Hence why no one has provided a modern, competitive alternative to real estate brokers: you simply can't under the current regulatory regime. Otherwise, what you've described would almost certainly al…

Sure you can. I can quit claim my house over to you with no regulations impacting me at all.

There are certainly valid reasons not to do so. Not the least of which being that if the person quitting the title claims didn't actually hold a clear title, then no ownership will actually transfer. But if you think that it is illegal to bypass the processes, then you are too caught up in the processes.

Re: What Zillow doesn't want you to know about its listing gap

#118

Post by kelukelugames » Tue, Oct 06, 2015, 9:55 PM UTC

encoderer wrote: post #90

toomuchtodo wrote: post #83

Earlier quoted context omitted.

You just listed all the reasons Redfin ( https://www.redfin.com ) is killing it. Their value proposition is that their agents aren't paid on commission, they're paid on your satisfaction. Their website is also very data-intensive compared to MLS sites (which create information asymmetry between buyers, sellers, and brokers due to how they're setup).

Otoh, are the very best agents going to work for rf and make less money? Redfin looks like modern KW to me. Most great agents don't want to undersell their own industry. And while there are many markets where a mediocre agent will do, I wouldn't take that chance in sf, la, Nyc, Miami, etc

Oh boy, this is my time to shine. I just left Redfin for a new job and had to explain to my co workers why Redfin is able to offer a lower rate without sacrificing service.

1. Real estate agents spend a lot of time prospecting. In fact, the spend most of their time looking for customers instead of closing deals. The typical work week might be 30 hours of prospecting and 10 hours of actually working on a deal.

2. The Redfin website attracts customers so Redfin agents don't spend anytime prospecting. They only work on deals and are able to generate more revenue. This efficiency funds the customer's rebate.

3. What does "best" mean? It could be someone with a lot of experience and has a strong repeat and referral network so she never has to prospect. Or it could be someone who closes a high volume of high end deals. There are plenty of these agents at Redfin.

4. I've heard some friends complain that Redfin doesn't provide enough handholding for first time buyers. I've also heard that traditional agents can be pushy. I suspect these are two sides of the same coin. I do know that Redfin agents will provide extra handholding if you ask for it.

5. If you show up to a traditional brokerage and want to buy a 200k house then do you think they will send their top agent? On the other end, someone with a 1~2+ million budget will get the best agent and they will bend over backwards to keep you happy. This is true for Redfin or any traditional brokerage.

6. Because of Redfin, other brokerages have lowered their commission fees too. Yeah for disruption!

Disclosure: I own Redfin stocks. At least I think I do. Their legal department hasn't responded to my email for confirmation yet.

Re: What Zillow doesn't want you to know about its listing gap

#119

Post by toomuchtodo » Tue, Oct 06, 2015, 9:58 PM UTC

brudgers wrote: post #115

toomuchtodo wrote: post #91

Earlier quoted context omitted.

Would I use them to sell? Maybe. Would I use them to buy? Most definitely. As mentioned further down in this thread, buyer's agents have every incentive for the buyer to pay as high a price as possible (due to RE commission structure). I want someone earning a fee on my transaction because they got me the best price (as either buyer or seller). Price of a service can be a form of signaling, but paying more for someth…

Real-estate commissions don't incentivize squeezing out a maximum sale price. They incentivize closing the sale over everything else. For example: Assume 7% commission. Assume 50/50 buyer/seller agent split. Assume 40/60 broker agent split. Assume sale price of $190,000 Buyer agent commission = $3990 Assume market value of $200,000 Difference from market value is $10,000 Total commission $700 on $10000 sale price Net…

I agree with you. I edited my comment to make that clear.

Re: What Zillow doesn't want you to know about its listing gap

#120

Post by jsc123 » Tue, Oct 06, 2015, 10:02 PM UTC

stephengillie wrote: post #116

imroot wrote: post #70

Getting and keeping real estate listings up to date is a big pain in the ass. There's no standardized residential listing data, and while you might get RETS feeds or data dumps from the MLS nightly, it's still on you to ensure that all of the information is parsed correctly and displayed in accordance to the MLS'es standards (or risk being cut off). Often, MLSes have terms in their contract that say that regardless o…

It's a nightmare. I used to work for one of the industry dinosaurs; they have an MLS team that was as large as their development team. They pull data from over 600 MLSes, with different requirements for each. Managing 600 business contacts is a big pain, then there are different data conventions that change without notice. They have had a long-standing arrangement to feed data to Trulia too. The word is most MLSes us…

which dinosaur?