Zillow CEO: startups trying to disrupt real estate commissions will fail (2012) • Hacker News Board

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#281

Post by dsfyu404ed » Thu, Jan 17, 2019, 1:43 PM UTC

ams6110 wrote: post #246

freedomben wrote: post #220

Earlier quoted context omitted.

Yes but such a crap shoot. And you'll easily spend $500 paying for one. Best advice I ever got was to just hire a general contractor to do it for roughly the same price. They find way more stuff and generally know the codes better. I've had inspectors miss huge structural problems that destroyed me later.

You may hit a roadblock as the sales contract may require that any inspection be performed by a "licensed home inspector" not a general contractor. Its just another siphon in the residential real estate pipeline.

Many GCs are licensed home inspectors because they give free estimates all day so they may as well get paid for a few of them. A lot of people buy homes then immediately get work done and if you're not an obvious scumbag the fact that you've already conducted one transaction with the new owner will not hurt you.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#282

Post by tomp » Thu, Jan 17, 2019, 1:48 PM UTC

rb808 wrote: post #242

muhneesh wrote: post #22

I see at least three counterpoints: 1. Real estate agents aren't often "experts" at real estate valuation, inspection or execution; They have dependencies on appraisers, inspectors, and lawyers. The work an average agent does is more or less cookie-cutter from my anecdotal experience, though I think there is a proportion of rockstar agents that do much more. 2. Not every buyer wants homebuying to be a client-services…

> it will be on a technology platform that takes 1% 1% sounds crazy expensive to me.

Indeed. Why would they get paid more if the house happens to be more expensive?! That's like a doctor charging 1% of the patients income... "rich people should pay more".

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#283

Post by hattar » Thu, Jan 17, 2019, 1:56 PM UTC

trevor-e wrote: post #129

Spooky23 wrote: post #50

Earlier quoted context omitted.

Most of the appraisers, inspectors and attorneys are filling a compliance role. The reality is the real estate person usually drives the process. Good ones know which appraisers to call and which inspectors to avoid. There's no real professional ethics involved, so most of them have arrangements with preferred folks whom they get referral fees from. (It's one of the reasons why home inspectors are almost completely u…

>(It's one of the reasons why home inspectors are almost completely useless.) I think this is more accurately "home inspectors recommended by the realtor". Home inspections are extremely useful, so long as they are working in your best interest.

After my most recent (second) home purchase I vowed never to pay for an inspector again. They assume no liability for the things they miss making them effectively useless if you have even the most basic knowledge of home issues. In both cases major issues were missed, most recently the complete absence of any air return ducts, and an illegally installed furnace. I had to find these issues myself later when constant HVAC problems finally drove me to take some time and climb into the attic/basement to investigate. Upon confronting the inspector, I was shown the portion of the contract indicating they had no liability and told even experts miss things. Luckily I knew the right people to put some pressure on and got my ~$500 back, but ultimately lost thousands to have appropriate repairs done for the work they missed.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#284

Post by gamechangr » Thu, Jan 17, 2019, 1:57 PM UTC

garagemc2 wrote: post #167

ryaniscool wrote: post #33

Over the last two years I've bought a couple of properties and I see the value of realtors as professional negotiators and experts on real estate laws and contracts. That being said, the National Association of Realtors (NAR) and their local branches are the definition of a cartel. My parents owned a real estate agency when I was growing up in the 80s and 90s. Back then, the cost of selling and marketing real estate…

Wow, in the UK it is about 1 - 2%.

What would a commission pay in USD? Or 1-2% of what price?

I'm guessing it might be very similar in actual dollars, as there are a number of cities in the US where you can buy a house for $150,000. 3% would be $4,500 USD for a real estate commission. Then the broker would keep a good part. The agent might get $3,000 of it.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#285

Post by richardknop » Thu, Jan 17, 2019, 2:00 PM UTC

AYBABTME wrote: post #186

Stryder wrote: post #165

Earlier quoted context omitted.

Sounds like software engineering today.

Where most engineering interns are probably paid more than the median national household income? Where starting salaries are in the 6 digits?

I mean come on, sure 120-150k starting salary out of university is only a thing in SF, Seattle etc but even in other parts software engineers are paid well. 80-90k in some city in midwest where housing is super cheap is a great middle class salary.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#286

Post by stirbot » Thu, Jan 17, 2019, 2:14 PM UTC

sgc wrote: post #197

lxe wrote: post #169

Earlier quoted context omitted.

Expecting 3%/$30,000 k for being "someone that smoothes things out" on a sale of, let's say a $1M home in CA, is theft.

Given the amount of weird and unrealistic expectations of both buyers and sellers nonstop in a transaction " the one smoothing things out" can be translated to "the essential element to actually closing the deal". There is a reason why most FSBOs wind up with an agent. They fuck it up.

I would argue that the reason is because they're tired of being pestered by would-be listing agents. I have a property listed as FSBO for the last 4 weeks and so far I have received 67 calls from listing agents, all documented in a spreadsheet so I can block them via Google Voice.

Or it may be that buyer's agents actively steer their clients away from FSBO properties which one person revealed to me during a showing even though the listing states I'll pay 2.5% to the buyer. I requested and now have that in writing from this buyer in case I feel like filing a complaint. You should have seen the agent's face when I said my email was in the listing and she could ask me any questions directly if she liked. An agent mortified by the thought of direct communication between buyer and the person who knows the property best.

Actual potential buyers send emails. Agents seem to only communicate via phone, probably because they believe they can charm you.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#287

Post by stirbot » Thu, Jan 17, 2019, 2:17 PM UTC

hcurtiss wrote: post #112

Real estate agents have three things they offer that until recently you could not get on your own. The first is listing on the MLS. The second is the MLS lockbox so other realtors can easily show the listed house. The third is access to the negotiated forms. All of these you can now get from a startup called Savvy Lane for a flat fee. We listed our house in Portland, paid Savvy Lane $495, and it sold 11 days later. I…

If you use a flat fee broker on my local MLS, you must respond to all requests for information or showing within 24 hours or the MLS will pull your listing. I was warned that agents are very aware of this and that you better be ready to answer calls at all hours, return every call you receive and to document the entirety of that process. Google Voice has been very useful in that regard.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#288

Post by StillBored » Thu, Jan 17, 2019, 2:51 PM UTC

MertsA wrote: post #276

zaroth wrote: post #122

Earlier quoted context omitted.

Perhaps a pocket listing isn’t paying the Buyers Agent half of the fee, so saving 3% right there. Depending on the market that may be worth it versus going to the broad market and having to pay both sides of the commission.

Pocket listings still pay both halves but are often discounted down to e.g. 5% instead of 6%. The agent tries to spin the situation as a discount to the buyer and seller as they "save" 1% on commission. One of the main justifications for why the agent "deserves" a 3% cut of the deal is that they are working to represent you and safeguard your interests. That can't happen when they're representing both sides. It's as…

I get the impression the austin market is more formalized and is run more like a mini private MLS... (might be wrong), but part of the goal seems to be to keep out the discount realtors/redfin/etc.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

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Post by davio » Thu, Jan 17, 2019, 3:00 PM UTC

StillBored wrote: post #163

davio wrote: post #69

Earlier quoted context omitted.

The listing agent should have expertise in the valuation for the ask price. I don't think appraisers are generally involved. Appraisers are primarily working for the mortgage company. My last 4 appraisals have been within a couple thousand of the purchase price.

"My last 4 appraisals have been within a couple thousand of the purchase price." Is that a reasonable metric, or is time on market? I ask because there are a number of studies, that indicate that real-estate agent's houses themselves frequently sit for sale for much longer than the ones they are selling. The idea being that the agents are pushing the market and willing to absorb the longer time-frame in exchange for…

My take is that the appraiser is simply protecting the bank from making a giant mistake. They'll prevent a 100K house for getting a 200k loan. Our previous house sold for 330K when most of the previous sales had been 250-300 for the neighborhood. We even had a comp of the exact same floorplan/elevation at 275. Our agent thought we would probably find buyers at the higher listing price, but didn't know if the house would appraise without any comps in the ballpark.

The low price attracting a bidding war doesn't really work in our market. My brother had something like a dozen showings and half that many offers on listing day, but only got a couple thousand over list. My house had 4 offers, but everyone stuck to their initial numbers when we asked for best and final offers.

Since the market has been hot, there is a stigma of "something must be wrong with that house" if it's been on the market 90+ days. Our strategy has been to price at the top of the comps and reduce quickly if we're not getting good leads.

Re: Zillow CEO: startups trying to disrupt real estate commissions will fail (2012)

#290

Post by sgc » Thu, Jan 17, 2019, 3:11 PM UTC

_fizz_buzz_ wrote: post #271

sgc wrote: post #199

Earlier quoted context omitted.

The catch is you don't know whether you under priced your house for that or well more than that unless you paid an appraiser or broker to help you set the price. Most FSBOs sell for under market.

You also don't know if you under priced your house if you go through an agent.

Normally your agents pulls comps from the MLS and can articulate their pricing strategy to you. They also watch the market and can articulate to you why or why not their should be a price change during a listing. Again, on average, FSBOs sell for less, enough to make up the difference on agent commission.