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The entire Real-Estate industry is ripe for disruption. Exactly why are we paying 6% to "agents"? https://www.redfin.com/ https://www.redfin.com/ is alread

by cbr 10y ago

The entire Real-Estate industry is ripe for disruption. Exactly why are we paying 6% to "agents"? https://www.redfin.com/ https://www.redfin.com/ is already doing this. They charge half the normal fee if you're selling and they give about half of their fee to you after purchase if you're buying. (We bought our house with them.)

bdangubic 10y ago
Sure, but what you are paying 1/2 for? Imagine owning a home which sells for $1,000,000. Currently you pay roughly 6% - $60,000. You pick Redfin - they charge take the money and give you back 1/2 but you are still paying them $30,000!! But if your house is sold for $100,000 you'd pay $6,000 or $3,000 to Redfin. The whole thing is just the biggest currently running scam that I can think of and someone will come along and totally disrupt this entire industry of scammers :-)
- jnicholasp 10y ago
  Exactly. Does it take ten times as much work for a real estate agent to sell a $1m house versus a $100k house? Obviously not. So what are we paying ten times as much for in the one case, and if there's no connection between effort and fee, what are we paying for, and why, even in the low end case? Totally a scam, totally ripe for disruption.
  - rplst8 10y ago
    The level of service is pretty low too. Its basically handling setting up a few appointments to see houses, helping grease the skids for inspections, and setting up a closing with a settlement company/lawyer. Stuff that really doesn't take all that much expertise/knowledge. I'm sure there are little things that go on behind the magic curtain, but definitely something that could be automated in a b2b fashion. The worst part of it all - all that money is spent basically to protect the seller so they can wash their hands of the whole deal once the house is sold. There is very little to no buyer protection in the real estate world.
- dmeeker 10y ago
  Sadly your commission on that million dollar house is actually $45k -- Redfin cuts their seller's agent commission in half (3% becomes 1.5%) but the other half goes to the buyer's agent, so you pay 4.5% rather than 6%.
willholloway 10y ago
Redfin isn't disrupting the industry. They set out to, and ended up pretty much recreating the existing model and competing on price. "We’re full-service, local agents who get to know you over coffee and on home tours, and we use online tools to make you smarter and faster. More than 10,000 customers buy or sell a home with us each year." That's pretty much what any brokerage is. The only difference is they pay their people salaries. Any agent that can actually substantially sell and earn would strike out on their own and get their brokers license.
jondobbs 10y ago
We are actually in the process of building out a platform that gives home sellers the power to sell their home with the support, guidance, and advice of an agent without the fees. Feedback is welcome. In less that 30 seconds, you can begin the process of listing your home with no contract or fees and includes MLS syndication. The app auto-dispatches photography, drop-ships signs and lock-boxes, and starts the documentation management process. At anytime you can reach out to your agent via phone, chat, or email. When offers come in, they are displayed in "easy to understand" language and you can review then with you agent/listing account manager anytime. When closing time comes, we dispatch a notary to the home and you exchange everything at the home. Super easy. Super convenient. How we make money: We retain a small fee at closing. When you go to buy your next home, we rebate that fee back to you when you use one of our vetted affiliate agents. It is a win win. We keep the small fee and the agent "rebate" is essentially the acquisition fee for the guaranteed buyer. Agents don't waste their time working leads that will most likely not close (which is part of the reason why big commissions exist) and home sellers save thousands of dollars. We operate in Colorado right now using brute force but V1 of our app will be released in January of 2017. We will be servicing Washington, Colorado, and Minnesota as of Februaury. www.bluematchrealty.com
- jondobbs 10y ago
  Ps. We are currently working on a target fee of $995. We are testing various fee structures in different markets.
grok2 10y ago
Recently, came across reali.com which claims to do the same....

by cbr 10y ago

bdangubic 10y ago

Sure, but what you are paying 1/2 for? Imagine owning a home which sells for $1,000,000. Currently you pay roughly 6% - $60,000. You pick Redfin - they charge take the money and give you back 1/2 but you are still paying them $30,000!! But if your house is sold for $100,000 you'd pay $6,000 or $3,000 to Redfin. The whole thing is just the biggest currently running scam that I can think of and someone will come along and totally disrupt this entire industry of scammers :-)

jnicholasp 10y ago
Exactly. Does it take ten times as much work for a real estate agent to sell a $1m house versus a $100k house? Obviously not. So what are we paying ten times as much for in the one case, and if there's no connection between effort and fee, what are we paying for, and why, even in the low end case? Totally a scam, totally ripe for disruption.
- rplst8 10y ago
  The level of service is pretty low too. Its basically handling setting up a few appointments to see houses, helping grease the skids for inspections, and setting up a closing with a settlement company/lawyer. Stuff that really doesn't take all that much expertise/knowledge. I'm sure there are little things that go on behind the magic curtain, but definitely something that could be automated in a b2b fashion. The worst part of it all - all that money is spent basically to protect the seller so they can wash their hands of the whole deal once the house is sold. There is very little to no buyer protection in the real estate world.
dmeeker 10y ago
Sadly your commission on that million dollar house is actually $45k -- Redfin cuts their seller's agent commission in half (3% becomes 1.5%) but the other half goes to the buyer's agent, so you pay 4.5% rather than 6%.

willholloway 10y ago

Redfin isn't disrupting the industry. They set out to, and ended up pretty much recreating the existing model and competing on price. "We’re full-service, local agents who get to know you over coffee and on home tours, and we use online tools to make you smarter and faster. More than 10,000 customers buy or sell a home with us each year." That's pretty much what any brokerage is. The only difference is they pay their people salaries. Any agent that can actually substantially sell and earn would strike out on their own and get their brokers license.

jondobbs 10y ago

We are actually in the process of building out a platform that gives home sellers the power to sell their home with the support, guidance, and advice of an agent without the fees. Feedback is welcome. In less that 30 seconds, you can begin the process of listing your home with no contract or fees and includes MLS syndication. The app auto-dispatches photography, drop-ships signs and lock-boxes, and starts the documentation management process. At anytime you can reach out to your agent via phone, chat, or email. When offers come in, they are displayed in "easy to understand" language and you can review then with you agent/listing account manager anytime. When closing time comes, we dispatch a notary to the home and you exchange everything at the home. Super easy. Super convenient. How we make money: We retain a small fee at closing. When you go to buy your next home, we rebate that fee back to you when you use one of our vetted affiliate agents. It is a win win. We keep the small fee and the agent "rebate" is essentially the acquisition fee for the guaranteed buyer. Agents don't waste their time working leads that will most likely not close (which is part of the reason why big commissions exist) and home sellers save thousands of dollars. We operate in Colorado right now using brute force but V1 of our app will be released in January of 2017. We will be servicing Washington, Colorado, and Minnesota as of Februaury. www.bluematchrealty.com

jondobbs 10y ago
Ps. We are currently working on a target fee of $995. We are testing various fee structures in different markets.

grok2 10y ago

Recently, came across reali.com which claims to do the same....