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Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

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Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#231

Post by DLA »

rco8786 wrote: post #107
whiplash451 wrote: post #92

Earlier quoted context omitted.

If there was a serious opportunity to arbitrage under the 6% fee, you bet that someone would have done it already — and well before the AI era.

To be fair, NAR goes to great lengths to maintain their monopoly and lock out anyone who tries to buy or sell a house without using them....specifically because they know they're priced insanely high for the services they provide and are in real danger of being undercut.

You can buy, for example, literally millions of dollars of corporate bonds for “The smaller of $250 or 1% of Trade Value” at IB.

https://www.interactivebrokers.com/en/pricing/commissions-bo...

The real estate market is still largely price fixed and quite inefficient.

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#232

Post by poulsbohemian »

greenfish6 wrote: post #88
gycom wrote: post #82

Earlier quoted context omitted.

The 6% fee (more normally 5% around these parts, western US) is paid by the sellers, but with the buyer's money. Usually. However, it's important to note that there was never a requirement for anyone to pay anything; it was simply what was commonly put into contracts. The settlement didn't change anything about that in particular. I just sold a house a couple weeks ago. I agreed to pay my seller's agent 2.5% out of t…

The primary driving factor on all these rates is the net take home for the seller. The reason why the total fee of 6% in a 3/3 split is because if this is done, then the seller will net about 10% higher than if they used no realtor. Similarly, for the buy agent half, they will get multiple extra % of home price above that 2.5%. The structure of the MLS / commission system incentivizes sellers to take out these large…

>then the seller will net about 10% higher than if they used no realtor

See this is the bit where a good Realtor makes their money... on nearly every deal I do, I am saving or making more money for my buyers and sellers over what they could either do on their own or what they would get from another Realtor. Why? Because I have a strong analytical approach to the market and I actually do my job. The typical agent waits for offers to come in and makes no effort to negotiate a better outcome for their seller. Likewise, many agents are lazy and have no idea how to advise their buyers on what to offer or how to create an overall compelling offer, IE: what are the possible levers we can use to create a competitive offer apart from cash on the barrel? It makes me cry when I see agents who don't even know what acting in their client's best interest means - but I don't blame them, I blame the public that makes no effort to interview or get to know their agent. Way easier to pick the person from your church or who you went to high school with than to actually interview and ask questions. I often wonder - does the public also act ignorantly when picking a lawyer, an accountant, a doctor, or other professionals?

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#233

Post by poulsbohemian »

greenfish6 wrote: post #115
gycom wrote: post #76

Hey, can you send your AI agent over to this house I'm looking at and measure out the bedrooms for me? Also, there's tile in the kitchen; was it laid correctly (tile under baseboard) or was it laid badly (burying the bottom of the baseboard)?

Human buyer agents wouldn't do these things that you're asking

You are grossly underestimating the things I will do for a client. I've shown houses on holidays, measured and filmed everything under the sun, crawled through muddy bug-filled cellars; the difference between a good agent and an average agent is even higher than the difference in 10x programmers.

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#234

Post by poulsbohemian »

DowagerDave wrote: post #60
greenfish6 wrote: post #8

Earlier quoted context omitted.

The target market is the personality of buyer who wants to do self service. Someone who finds houses on Zillow and just gets a realtor at the end. Realtors are paid on commission which means that they want to transact high and immediately. Poor alignment with intent for buyers. We have an offer drafting service on our website where all you need to provide is your email, phone, property, and price and we can go from t…

>> Realtors are paid on commission which means that they want to transact high and immediately This is either naive or disingenuous. Do the math; realtors want to close fast but don't really care about the price the way the buyers and sellers do. The commission difference on a significant gap is not worth losing the deal.

>The commission difference on a significant gap is not worth losing the deal.

You get it better than the parent commenter... just this morning on a deal the other agent and I each agreed to chip in a bit to keep the deal together, even though the actual commission we will each receive is borderline not worth the effort. Real estate is a relationship business. We take care of clients they will come back and they will refer their friends. Yes deal flow is important, but just transacting high and fast is a good way to burn out both yourself and your clients.

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#235

Post by greenfish6 »

in_cahoots wrote: post #187
greenfish6 wrote: post #100

Earlier quoted context omitted.

The vast majority of agents communication is over text and email. It is quite rare that it is required that a realtor must make an in person appearance somewhere, usually that's just for first meetings. But yes, when stuff like this happens, we'll have a person do the required representation. Put it like this: if 90% of realtor time is spent on communication that is done over text an email, then each realtor will be…

How many residential houses have you personally bought or served as a realtor for? In my experience everything other than rote paperwork and sending over information is done via chat or in person. No realtor is going to walk a first-time buyer through an inspection report via text message or email.

When I bought my house as a first time buyer in sf, my agent walked me through my disclosures over email..

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#236

Post by greenfish6 »

replwoacause wrote: post #217
greenfish6 wrote: post #137

Earlier quoted context omitted.

True, I'll update the website to reflect our updated pricing model

FWIW services like Redfin list their fees right upfront.

Fwiw redfin is also tiny with 0.78% market share and slim or negative profits

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#237

Post by evantbyrne »

poulsbohemian wrote: post #228
evantbyrne wrote: post #193

Earlier quoted context omitted.

Prior to the changes which only went into place in August, agents were colluding to keep fees artificially high. Buyers' agents would actually hide listings that promised less than what they wanted and all of that information was hidden from buyers until the buy/sell agreement. It is way too early to say exactly what the impact will be, but as an anecdote my agent accepted 2% on the home I just closed on. My predicti…

>agents were colluding to keep fees artificially high Sitzer-Burnett involved a very narrow definition of collusion... essentially one Kansas City MLS had a mandatory input field for a seller-paid buyer commission. Realizing the risk of copycat lawsuits, the NAR got involved and decided to settle. Both Sitzer and Burnett should have gone after their own agents rather than turning this into a national issue. >My predi…

The mandatory "Buyer Broker Commission Rule" was in the NAR Handbook, which was binding for MLSs. Moehrl vs NAR went after twenty offending MLSs and the four largest national real estate broker franchisors in America. They got caught red handed price fixing they had no choice but to settle.

Realtor services are valuable, but they aren't worth 6% of a person's largest investment. On the median home that's $24k, which is considerably more than other professional services related to buying a home.

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#238

Post by greenfish6 »

replwoacause wrote: post #223
conductr wrote: post #203

Reading through the comments and I think this is the worst reception I’ve seen on HN, I seriously hope you guys consider some of this feedback. Good luck out there

My take is that greenfish comes of as sort of cocky and defensive, which is off putting. Not meant as a personal attack because I have no clue who these guys are, but the responses just don’t make me want to try out the service even though conceptually I like the idea of flipping this dusty ass industry on its ear.

Yea definitely playing a bit of persona since comments drive up the rating on HN. 3500 uniques inbound from this post, couple home tours scheduled from inbound users, I'd say I'm happy about it. I would say 75% of people I meet face to face when I say I'm making an ai realtor, it's a negative reaction. Although it does much better in the bay

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#239

Post by mcmcmc »

0xB31B1B wrote: post #225
d0gsg0w00f wrote: post #214

Earlier quoted context omitted.

How else would a car manufacturer put staff and inventory in every town across the country? They would either build dealerships themselves or franchise it out. Their cost structures don't cover this brick and mortar presence currently so costs would rise across the board. Car dealerships are mostly middlemen between customer, manufacturer, and state government for registration and tax collection. I just can't see how…

Tesla does all of this and they do it without dealerships. The problem with dealerships is they’re independent franchised businesses that extract but do not create value, not that they are buildings full of cars.

I think you missed the part about "towns across the country". For almost 20k towns and cities in the US there are 245 Tesla storefronts.

Re: Launch HN: Modern Realty (YC S24) – AI Real Estate Agent for Home Buyers

#240

Post by [deleted] »

0xB31B1B wrote: post #225
d0gsg0w00f wrote: post #214

Earlier quoted context omitted.

How else would a car manufacturer put staff and inventory in every town across the country? They would either build dealerships themselves or franchise it out. Their cost structures don't cover this brick and mortar presence currently so costs would rise across the board. Car dealerships are mostly middlemen between customer, manufacturer, and state government for registration and tax collection. I just can't see how…

Tesla does all of this and they do it without dealerships. The problem with dealerships is they’re independent franchised businesses that extract but do not create value, not that they are buildings full of cars.

[deleted]
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