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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

#81

Post by jrflowers »

alfalfasprout wrote: post #65
thinkmorebetter wrote: post #62

I think it’s a bit misguided in the pitch by too boldly trying to replace all buyer agents. A lot of what realtors offer, especially to first time buyers (~1/3), is emotional support and confidence/security for making the biggest financial decision in their lives. I don't believe an AI isn’t going to be able to do that. But if you’re a second+ time buyer, then I think it makes more sense.

Is emotional support worth $60k on a $2mm house? No, it isn't. Lots of realtors are trying to justify their worth but the reality is a large number of transactions still involve the buyers/sellers doing their own research + due diligence.

> Is emotional support worth $60k on a $2mm house? No, it isn't.

There is no practical ceiling on what people will spend to feel comforted and encouraged, or to have their choices applauded.

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

#82

Post by gycom »

itake wrote: post #67
keeptrying wrote: post #46

Earlier quoted context omitted.

The ludicrous 6% fee is whats going to drive adoption by end users and in turn by brokers. Move that fee to 1% for buyer agent and you have a massive market.

The 6% fee was paid by the sellers, not the buyers. Buyers didn't pay anything to the agents. But even then, the buyer's agents would "refund" the buyer ~2% of the fee as a cashback incentive to use a specific agent. but recently, the rule changed so the sellers are only required to pay the 3% fee to the seller's agent and buyers need to negotiate their own deal with the buyer's agent. Currently, there are many broke…

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 the sale price. I also, in the contract, offered to pay 2.5% to the buyer's agent. In the event that my seller's agent was also the buyer's agent, that 2.5% would be refunded to me. What actually ended up happening was that in the offer that we ended up accepting, the buyer asked us to pay 3% instead of 2.5% to their agent. We agreed.

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

#83

Post by greenfish6 »

bbor wrote: post #51
DrillShopper wrote: post #48

Earlier quoted context omitted.

Imagine how easy it would be to influence the AI to redline. Slumlords, racists, and other CHUDs are salivating over this

A) this is a buyer’s agent, not a seller’s agent. B) I don’t think you tell the agent your race, and traditional bias protections (namely doing the whole process without meeting in person) would still be in place AFAIU.

A) Correct.

B) Yes, I think the AI agent actually can more easily ignore your race / age / gender because it is not programmed to go look up those things and people don't text their agent what they are - hard for the LLM to know these things and start to bias

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

#84

Post by eldavido »

I tried to automate a big chunk of property management (mostly commercial) over the past few years. The main thing I realized is that it's mostly a people business, and AI (or computers generally) are never going to stand over a vendor's shoulder and keep them honest (e.g. make sure they sweep up or don't scuff the walls), or have a difficult conversation about late rent with a tenant, or show up after hours when a pipe breaks, if only to show face with a tenant.

There are definitely workflow and process elements that can be automated. But if wealth management is any indication, there are a lot of people willing to pay a premium for having a person involved. Not sure why real estate would be different.

The wildcard in all this is the NAR court decision. If buyers have to pay for their own representation, that might make them shop around a little more.

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

#85

Post by thinkmorebetter »

alfalfasprout wrote: post #65
thinkmorebetter wrote: post #62

I think it’s a bit misguided in the pitch by too boldly trying to replace all buyer agents. A lot of what realtors offer, especially to first time buyers (~1/3), is emotional support and confidence/security for making the biggest financial decision in their lives. I don't believe an AI isn’t going to be able to do that. But if you’re a second+ time buyer, then I think it makes more sense.

Is emotional support worth $60k on a $2mm house? No, it isn't. Lots of realtors are trying to justify their worth but the reality is a large number of transactions still involve the buyers/sellers doing their own research + due diligence.

I am not defending the realtor fees here. The free market should decide what is worth to anyone. My take is simply that an AI realtor doesn't do all that a (good) human one does.

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

#86

Post by thinkmorebetter »

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.

Also, a huge percentage of deal volume comes from referrals. Successful realtors don't become so without thinking long-term.

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

#87

Post by sahmeepee »

Closi wrote: post #68
keeptrying wrote: post #46

Earlier quoted context omitted.

The ludicrous 6% fee is whats going to drive adoption by end users and in turn by brokers. Move that fee to 1% for buyer agent and you have a massive market.

Is this the rate in the USA? In the uk it’s a standard 1% for the seller.

It actually varies a bit in the UK (always for the seller as you say) with a possibly surprising relationship with property value: properties at the top end typically pay a higher % than those in the middle or at the bottom.

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

#88

Post by greenfish6 »

gycom wrote: post #82
itake wrote: post #67

Earlier quoted context omitted.

The 6% fee was paid by the sellers, not the buyers. Buyers didn't pay anything to the agents. But even then, the buyer's agents would "refund" the buyer ~2% of the fee as a cashback incentive to use a specific agent. but recently, the rule changed so the sellers are only required to pay the 3% fee to the seller's agent and buyers need to negotiate their own deal with the buyer's agent. Currently, there are many broke…

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 fees because they will be rewarded for doing so. Only when the system is upgraded to allow sellers and buyers to find each other and pay market rates will the fees go down (we want to provide our own MLS in the longer term future)

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

#89

Post by lillu »

DowagerDave wrote: post #58

Sellers, sure but I don't understand why a buyer would NOT want to use an agent? You mention better prices, but I don't believe I'm in a unique environment where the seller covers all costs and agents work on commission. >> The founders of Modern Realty realized that since buyer agents are paid for by commission, they will encourage you to buy immediately and high. Modern Realty allows you to transparently control yo…

They've basically looking to automate the agent process but want to still take the 3% commission for shittier AI service. I as a buyer have to do the work of looking at the market stats in my area to determine a good offer, while they take all the commission. Absolutely ridiculous.

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

#90

Post by xienze »

itake wrote: post #67
keeptrying wrote: post #46

Earlier quoted context omitted.

The ludicrous 6% fee is whats going to drive adoption by end users and in turn by brokers. Move that fee to 1% for buyer agent and you have a massive market.

The 6% fee was paid by the sellers, not the buyers. Buyers didn't pay anything to the agents. But even then, the buyer's agents would "refund" the buyer ~2% of the fee as a cashback incentive to use a specific agent. but recently, the rule changed so the sellers are only required to pay the 3% fee to the seller's agent and buyers need to negotiate their own deal with the buyer's agent. Currently, there are many broke…

> The 6% fee was paid by the sellers, not the buyers. Buyers didn't pay anything to the agents.

It’s the buyer’s money, which becomes the seller’s money, which gets paid to the agents. Realtors need to stop lying about who pays the fees.

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