4 ms·

I'm still waiting for someone to completely eliminate the realtor and charge a reasonable flat fee ($1000?) to buy/sell a house and handle all the related detai

I'm still waiting for someone to completely eliminate the realtor and charge a reasonable flat fee ($1000?) to buy/sell a house and handle all the related details. Why do we need realtors at this point? Everyone finds houses themselves online nowadays. Why does anyone need to pay a whopper commission to some middle-man?

fananta 9y ago
I agree with your point, but realtors are protected but layers of legislation. In many areas the realtor groups almost operate like the taxi cartels.
- deleted 9y ago
  [deleted]
rhodysurf 9y ago
I used to think the same way, but then I bought my first house and my realtor was insanely helpful. The entire process is filled with random quagmires that I would have never known how to manage otherwise. Someone with more experience may be more able to go it alone obviously, but my realtor was invaluable.
- japhyr 9y ago
  I agree. I live in a small isolated town, and I thought realtors were artificially increasing the home prices (not values, but prices) in the small pool of housing available here. But their local knowledge was invaluable in both buying and selling a home. That said, if a buyer and seller agree on a sale independently of any realtor here, we can go to a local realtor and they'll happily facilitate the sale for a flat fee of around $1000. I've done that once, and had a number of friends who also did so. Most of the realtors recognize that the bulk of their commission comes from the listing and marketing process, and the paperwork is just something they know how to do correctly. $1000 is a fair price for knowing that's all being done correctly and fairly.
  - ericb 9y ago
    You don't need a realtor, fyi, just a good real estate lawyer, which you generally need anyway when buying/selling a house. A lot of the apparent value of realtors disappears when you do the process yourself. source: have FSBO bought, and FSBO sold, and redfin bought, and worked for Coldwell Banker. Getting on the MLS is cheap/easy now with discount MLS listings--I wouldn't do fsbo without it, even though you usually pay buyer's agents.
    - ferentchak 9y ago
      Do they make you sign a contract or can you put 3% discount for person to person sale? That way they are paying their agent if they decide to use one.
      - ericb 9y ago
        In the MLS listing, you put the amount of commission you are offering for buyer's agent. Then the real estate lawyer draws up the final contract with that included and it comes out of what you get. For direct person to person, I imagine you can just skip that part. If you put that you are willing to pay 0% commission, I think what will happen is that everyone who is actually relying on their buyer's agent to source houses to look at will not be brought to your property, as there is nothing in it for them. You might lose out on a profitable bidding war, or the one customer who might buy the house coming through by doing that, but you might get an extra 2.5% if it works out.
    - opo 9y ago
      >You don't need a realtor, fyi, just a good real estate lawyer, Lawyer prices will obviously be different in different parts of the country, (so maybe a lot cheaper where you are) but I knew someone who arranged a transaction without a realtor and paid a lawyer a lot more than $1,000 to put together all the necessary documents. One thousand seems like a good deal. >...which you generally need anyway when buying/selling a house. You've found it necessary to always consult a lawyer when buying/selling even though realtors were involved? Why? What value did they add?
- goshx 9y ago
  Have you used TurboTax or an alternative to file your taxes? Would something like that, with step by step and explaining why's and how's not be enough for this purpose?
  - dlp211 9y ago
    I think for stable markets; ie: markets where neither the buyer or seller has a distinct advantage; probably. But I just bought in a market where the sellers have a clear advantage and buyers are competing aggressively against one another. Houses in my market have an average listing time of 8 days, almost all with multiple offers, many with dozens of offers. I thought my RE agent wasn't really worth what I knew I would be paying him until we actually went to make an offer. Their knowledge of our circumstance and the local market let us put together an offer that despite not being the highest offer, nor the most favorable closing (I used a VA loan which takes on average 50% longer to close), we still were able to come out on top. My agent helped us get an inspection on the property the day we saw it so that we could wave inspection contingency, knew that we needed to put up more than the standard earnest money to account for our weak closing position, and they were able to accurately predict what the house would appraise for so that we could ensure that we didn't overbid and waive the under appraisal contingency.
- dublinben 9y ago
  That doesn't explain why they should earn a percentage of the purchase price, and not a flat fee.
  - jrs235 9y ago
    They don't get paid unless there is a successful sale. Listing contracts are for a fixed period. There are marketing expenses and time invested to list and market a property. If they don't successfully sell your home they don't get paid and they are out any of their time invested and marketing expenses. High risk, high reward.
    - notadoc 9y ago
      > There are marketing expenses and time invested to list and market a property Putting a house on Zillow takes, what, 15 minutes? Perhaps the exception is very high end real estate, but from what I've seen most of the high end realtors are just really good at networking and schmoozing.
      - jrs235 9y ago
        Add up all the time an agent spends previewing the property before listing, taking calls (especially from crazies) and arranging for showings, showings (including driving to and from), negotiating (writing up offers and counter offers), after acceptance arrangements such as coordinating inspections, final readings, closing arrangements. They only get paid if the deal closes. The amount of effort is variable and unknown upfront (high risk, high reward). Would you be willing to pay an hourly rate or per service rendered UPFRONT fee? I'm sure there are some brokers that offer such things. Most people don't want to part ways with their money before they know they actually sold their home (another nice thing about not having to pay until closing... the seller only pays if and at closing!) How much do knowledgeable and experienced consultants make per hour?
        bhandziuk 9y ago
        Knowledgeable and experienced consultants typically don't make more than maybe 250 per hour (as a cost the client) that I've seen. That's pretty high at that.
- notadoc 9y ago
  > The entire process is filled with random quagmires OK, but why is that? And how many of those "random quagmires" are coming from realtors? The real estate industry reminds me of the tax preparation industry or car sales in the USA. My opinion is they are all (by design) intentionally annoying, cumbersome, overly complex, overly expensive, and excessively time consuming, seemingly for no reason other than to protect vested interests. These areas are ripe for dramatic disruption.
  - Balgair 9y ago
    They usually come from City Councils, county boards, school levies, HOAs, insurance requirements on page 192.PGP.168, etc. that are changing all the time. Depending on where you are in the US, it really can be that bad very quickly. Ever buy a house? The contract you sign is literally thousands of pages of legalese that may or may not contradict everything else in it. The Real Estate Agents (REAs) give you 'cover' and smooth out all bumps. Joan knows Frank on XYZ council, therefore you'll never ever catch any flack. Freddy is a REA you used and therefore everything is 'above board' as far as a judge cares, next case please. Ahmed knows good and bad home inspectors, it'll take you 3 months of 8 hour days to begin to figure them out. Etc. Yes, corruption/nepotism sucks, PM me when it has passed from the face of the Earth. If you are buying a home in anywhere near a 'desirable' market, use a REA. 5k for 'peace of mind' is more than worth it.
    - abawany 9y ago
      In the 10 or so real estate deals that I have done over the past few years, I have to say that the realtor (even the exceptionally good ones) never pointed out any of the nuances of the perils related to the entities you mentioned above. In all cases, it was me, due to bad past experiences with HOAs for example, who was proactively demanding that I be given the HOA restrictions before making the contract; there were plenty of deals I walked away from when I thought the HOA was power hungry and ridiculous. EDIT: I am not dismissing the role of realtors - they had good tips that I use to this day. Here is one: start the homeowner's insurance purchase/quotes during the option period to ensure that any related surprises here will enable you to walk away during the option period than trying to deal with killing the deal with the much-higher earnest money amount at stake. I have to say that the most insightful article I have ever read about realtors came from the controversial Freakonomics. It clearly outlined the separation of concerns and interests and made it clear to me that if a real estate deal is to work well, the only person responsible is me and me alone.
- mox1 9y ago
  Agreed, for most people this is by far the single largest monetary transaction they will make (aside from another home purchase) in their entire life. Some form of "assistance" during the process is necessary. I'm a big DIYer and will go to great length to research and do things on my own. My Realtor (Redfin agent) payed for himself and then some during the home buying process. Your paying for their experience and knowledge. My agent making statements like "I had our lawyer review our signed purchase agreement and because of X,Y,Z we are still ok" helped me understand why I'm paying a big company a lot of money to help me out.
- ovulator 9y ago
  As someone who bought my first house without a realtor involved at all. I don't know what value they could have added. Thanks to Zillow, Redfin and the like it was a piece of cake to locate a house. I found one that was for sale by owner that I liked, we negotiated on a price and came to an agreement. There was a lot of paperwork, but I'm literate and can read. Most of the complex stuff was with the loan and the title company, both of which were more than happy to walk me through the steps of each. I really have no idea what tens of thousands of dollars extra would have bought me. I don't need someone to hold my hand and look at cars with me either.
  - duderific 9y ago
    > I found one that was for sale by owner that I liked, we negotiated on a price and came to an agreement. Sounds like you don't live in a very competitive market. Here in the Bay Area, you don't even talk to the owner of the house, as they will have a seller's agent. Generally if a house is desirable, there will be anywhere from 5 to 20 offers on a house. The only way to get your foot in the door is to have your buyer's agent go to bat for you. Ideally they will have a prior relationship with the seller's agent, and have insight as to what kind of offer to make to make you competitive with other offers. I can't imagine buying a house around here without having the expertise that an agent can offer. > I really have no idea what tens of thousands of dollars extra would have bought me. As a buyer, you are not paying anything extra. The commission comes out of the seller's fees. > I don't need someone to hold my hand and look at cars with me either. Buying a house is an order of magnitude more complex and expensive than buying a car. Not really a fair comparison.
    - ryuker16 9y ago
      Actually some would prefer no agent buyers due to contract arrangement. For example, the buyer and seller will split commission but in some cases one side can collect all of it.
  - rhodysurf 9y ago
    If i didnt have my realtor I would not have landed my house because of how competitive my market is. My realtor called me at 6 am on a Saturday morning before the listing was even up on zillow or redfin. I was there to see the house that afternoon and had a P&S agreement accepted before Monday morning before anyone else even had a chance to see the house. Also the realtor had contacts of contractors and inspectors that she trusted so that the inspection and repair stages all went way more smoothly than if I was calling random contractors for quotes. Again this doesnt apply depending on the market and price range that you are in.
ssewell 9y ago
Isn't the main value of a realtor the ability to provide access to the home for sale, monitor the visitor, and provide insight in regards to the construction & quality of the home? I don't think most people expect the realtor to recommend random homes based on the buyers preferences, as most people use services, such as RedFin, to narrow down the homes that match their best fit.
- berberous 9y ago
  And that's worth 3%? The issue with realtors is the exorbitant fees they still charge.
  - dmreedy 9y ago
    Have you ever worked with a realtor? The fee may seem exorbitant because you pay it in a lump sum. But if you were to try and calculate their hourly fee, you'll see even the mediocre ones who are only moderately attentive to their clients are often making only a few dollars an hour.
    - ryandrake 9y ago
      Exactly. I worked with a buyer's agent for 2+ years, and during that time saw over 100 houses and submitted about 30 written offers. None of the offers were accepted, so he made $0 from me. I felt kind of bad, but the money he makes from his successful transactions probably makes it worth it. Not my problem. I don't know if they deserve a % of the purchase price, but they definitely ought to at least charge by the hour.
  - bradly 9y ago
    In my experience a good realtor will either save you 3% when buying or get you an extra 3% when selling by knowing the area, knowing the right improvements to make, home staging, and negotiating.
  - gpawl 9y ago
    It's only exorbitant since the price of housing has skyrocketed in the past 20 years
wyc 9y ago
Buying a house is among the largest purchases of many peoples' lives. It could be worth the $5,000-$50,000 (~6% of value in U.S.) for the piece of mind. People are used to using realtors. I don't think enough economists and business people give culture enough credit for its impact on businesses and finances. It's common enough that if the buyer tries to make direct contact with the seller, all parties are startled and the deal falls through entirely. Next, there are established network effects in the real estate industry. Companies that have tried to offer a flat-fee house brokerage service at scale have been met by massive resistance from existing realtors, who then dissuade their many buyers and sellers from even considering those services. I think this has been a brick wall for a long time.
- soVeryTired 9y ago
  I'm pretty sure purplebricks in the UK are flat-fee.
- Simon_says 9y ago
  That fee could easily be 3-6 months salary. That's a hefty price to pay for culture and piece of mind.
  - acdha 9y ago
    Spread over a 30 year mortgage? I'm not saying it's nothing but many people really value peace of mind.
    - Simon_says 9y ago
      Is your argument that agents are so expensive that hiring them necessitates taking out a 30-year loan? That's not a great argument. I don't think the time horizon of the mortgage is relevant. 3-month's income is 3-month's income.
      - acdha 9y ago
        > I don't think the time horizon of the mortgage is relevant. I think that view is less prevalent than it might seem. Many people look at this as one large purchase which they intend to use for decades, which involves a number of other upfront expenses but almost always also assumes significant tax savings and appreciation over that same time period. I've heard plenty of people talk about that as just the price to pay for getting in on that long-term gain and clearly it hasn't caused that many people to not buy houses or bail to an alternative so far. One of the reasons for that seems to be that some people value having what they perceive as an expert representing them. I like RedFin – and had a great experience using them when I bought my current house – but it was interesting seeing how some people thought it was great when we mentioned that but others — generally but not exclusively older — were really scared that there was going to be some sort of unnoticed problem with the house[1] or a technicality which would cause the deal to fall through. 1. Yes, they knew this was replacing the realtor and not the inspector. No, that did not end the concern.
jbob2000 9y ago
Have you ever sold a home? Potential buyers will drive you nuts with all the stupid questions they'll ask. A good realtor has the communication skills to move you along to a sale much faster.
- svachalek 9y ago
  And it only costs about $50,000 for that...
toomuchtodo 9y ago
"I'm still waiting for someone to completely eliminate the need for a software engineer and charge a reasonable flat fee to bolt together some libraries and handle all the related details. Why do we even need software engineers at this point? Everyone can find the libraries and open source tools they need online nowadays. Why does anyone need to pay a whopper paycheck to some middle-man?" You're paying for someone's expertise, like in most industries.
- ferentchak 9y ago
  I can see some of the expertise coming into play on the selling side. Can you give me a few examples of what kinds of value one gets while buying? From what I can tell the main service that my realtor offered when I buying my place was access to the MLS. We found the houses we wanted to look at and he gave us access. Dollars per hour he was doing very well working with me, although I might be an exception.
  - toomuchtodo 9y ago
    In my most recent homebuying experience, my realtor was able to point out several facts about the house based on the surrounding market that saved me about $40k. It also helps that I don't pay for the realtor on the buy side. What's your argument against a good realtor who saves you any amount when it's coming out of the seller's fee? Edit: By the time you've come to visit a home you're buying, the seller has already agreed to the commission percentage with their agent. The money is already spent.
    - hkmurakami 9y ago
      You're surely paying for the realtor in a pass through fashion on the sale price of the home.
    - ferentchak 9y ago
      The money from the seller isn't free. For example there is a chance that I could get them to sell the house to me for less than what I am buying it for. If for example the seller met me half way on those fees that's a decent amount off of cash. When I was buying my home the loan person I worked with is family so she helped me more than my realtor. Looked into neighborhoods for me etc. It could be that they were looking out for me more than normal. I am in a market where houses sell instantly, more or less you look at a house and make an offer within out 24 hours or else it's gone. Which is crazy but the realtor didn't even get much of a chance to look into things here for us.
dvcc 9y ago
Isn't this basically Redfin? It might not be a flat fee, but it is a reduced fee. Also intermediaries are still needed for guidance and walkthroughs, its not like viewing homes online is all there is to it.
ransom1538 9y ago
Mainly they are protected by the MLS listing service. You can buy a house with a flat fee now with a decent RE lawyer.
jrs235 9y ago
In many states, real estate brokers are responsible for ensuring that laws are followed and held accountable by a state government office. This means brokers take on risk and liability. Many states require a brokers license in order to sell real property for another for a fee. Yes, brokers are trying to protect their generous income structure. Brokers (and salespeople) are only paid on successfully selling the property. The truth is not many people want to pay someone per hour or per showing to see houses. You can certainly sell or buy a home without a broker. You are bearing the risks in that case. If you buy and sell a home on your own and the deal falls apart, if the contract was not valid or not enforceable you could owe or lose thousands of dollars. Yes, you can have a lawyer draft the contract but a lawyer can't (in many states) show the property (ADD: and a lawyer is going to charge for each and every offer you written up. You pay regardless of if the sell happens or not). With time I see brokers fees approaching a flat fee for facilitation services only (so long as they don't represent the seller or buyer in the transaction). Why do we still have sports agents? Can't players and teams negotiate on their own?
bdamm 9y ago
Having gone through four home-buying episodes, where my wife (an ex-realtor) spent massive amounts of time trolling Trulia, RedFin, calling police departments, gathering reports from the local City Hall, I can tell you there is still a service to be provided by agents. And anyone who has bought a house knows that the collection of contracts that represents "buying a house" is not a small collection, and errors can be logistical disasters down the road. A good agent is worth 10x their commission. A bad agent, of which there are many, is a waste of money. And the big rub is that people who could be buying homes probably aren't simply because they don't know the dozens of tricks that can be employed to make an unaffordable situation affordable, or able to identify a good deal. If you're comfortable buying a home without any background check, then I guess you don't need a realtor, but I wouldn't do it. Oh, and the laws that protect realtors, toss 'em. What we really need is Yelp for realtors.
- fraserharris 9y ago
  What is the purpose of calling police departments?
  - hkmurakami 9y ago
    Crime in the area, for one.
  - jrs235 9y ago
    To determine if any possible meth activity is associated with the home.
- notadoc 9y ago
  > A good agent is worth 10x their commission. You actually think a 'good' realtor deserves a 60% commission? I can tell you're married to a realtor.
  - bdamm 9y ago
    My bad, we're actually pretty good at shrinking the realtor commission, we never pay 6%.
spelunker 9y ago
I was recently a first time homebuyer and my real estate agent was really helpful in basically holding my hand through the process. He walked me through a contract to buy and sell, since I'd never seen one before. He helped me figure out a competitive offer for the house I wanted. He was able to spend time on things like searching for houses or setting up tours while I was working, it was great. Just looking at houses online only scratches the surface of the homebuying process, IMO, and frankly with my full-time job it would have taken me much longer to find a house... assuming I would have even known how to get to closing, which I didn't.
goshx 9y ago
I agree. I've been waiting for this disruption for a while. In the past 5 years all the realtors I had to interact with had to do was to open the property I found and later prepare the documents and tell me where to sign and who to pay, and obviously collect a good chunk of money every year for rentals and the % for sales. Every time I needed their help for something I wouldn't get. I can't see how that could not been replaced by a system of some sort.
jasode 9y ago
>I'm still waiting for someone to completely eliminate the realtor [...] Why do we need realtors at this point? Everyone finds houses themselves online nowadays. The need for realtors comes mostly from the sellers not the buyers. (Yes, some buyers also contract a "buyer's agent" but the point remains that realtors are still desirable to help market and show a home.) Unlike the "dis-intermediation" that happened to travel agents (online flight/hotel booking), and librarians (google searches), or video rental clerks (Netflix), the elimination of realtors to represent the most expensive component in an owner's net worth is not going to happen because of a slick point & click housing website. Consider that the vast majority of people don't even post their garage items on ebay for sale. Compared to that, selling a house is a much more complicated transaction. There's a categorization in sales called "low touch" and "high touch" transactions. A "low touch" transaction would be buying a loaf of bread from the grocery store. For the forseeable future (at least decades), selling homes will be a "high touch" transaction and sellers will want the reassurance and "warm & fuzzies" from another human middleman to help them fetch the best price. (E.g., the owner would presumably hire the appropriate realtor with the reputation and track record to quickly sell homes similar to his/her property.) However, that doesn't mean more efficiencies can't be wrung from the system. Many think the typical realtor's commission of ~6% is way too high so it seems inevitable that entrepreneurs will revolutionize the market. Regardless of the new landscape (e.g. maybe no more MLS), the human intermediaries will still be there.
rgbrgb 9y ago
With Open Listings we started flat fee on the buy side but had a couple problems. First, it was very hard to communicate the value prop to customers. We went to market with something like "we refund the buyer's commission minus our flat fee". This brought up all kinds of questions and often buyers thought we were more expensive than realtors. Saying that we're 50% the price of a traditional realtor ended up being a more compelling message even though there's less savings in many cases. Second, when we're acquiring customers we compete with all of the people charging a much fatter commission. If a realtor is making a 50k commission, they can afford to spend 10k on acquiring a single customer. Assuming an efficient market (which the acquisition side kind of is), a flat fee kind of caps your addressable market because you can only compete with ads at a certain price point (buyers at <400k price points in CA for instance). In some ways this is counteracted by the fact that you can save $1M buyers way more money with the flat fee, but only if you can communicate that message effectively. That said, it looks like redfin found that there's more price elasticity on the sell side. The seller has likely been through the process before, seen how little work agents do, and feels the full agent fee more viscerally at the time of listing. For the buyer, the agent fee is this murky thing that your agent will tell you is paid for by the seller... first time buyers usually don't find out how much it is until they sign the final closing docs. The other difficulty is that the typical 2.5% being offered to the buyer's agent is essentially an advertising cost... in the existing market agents will often steer clients away from low commission listings (not ethical but it happens).
- cabinguy 9y ago
  "seen how little work agents do..." This is going to sound condescending, but you honestly do not know much about the business you're in.
  - rgbrgb 9y ago
    I'm not an agent myself, but I did help start a brokerage and spend most of my time automating busywork for our agents. Our top agents do 5-15 transactions per month in very competitive markets, have competitive acceptance and close rates, and great NPS scores. Agents are absolutely necessary to negotiate with sellers and talk stressed out buyers through the process, but most spend the majority of their time doing lead generation. I talked to an agent from a respectable brokerage in LA the other day who said she spends 95% of her time prospecting for new clients. I'm not by any means saying agents are lazy, I maybe phrased that poorly. Just that if you're looking at the hourly rate the agent is making for the ~10 hours they're spending from offer to close, it's kind of wacky compared to most other types of high skill work (e.g. 10 hours on a 500k home with the typical 2.5% commission is $1,250/hour).
clairity 9y ago
do you really think the value prop of a realtor is that simple? that people willingly pay tens of thousands of dollars for a few "related details"? if it were that easy, why not just throw that business together over the weekend yourself? maybe put the thinking cap on for a few seconds before making a flippant comment about a $100B+ industry? (just one tiny hint: you have to dismantle the MLS network in the process.) yes, it's inefficient, but it's not a valueless middleman. yes, there is additional value that could be unlocked through greater efficiency. but there is a huge contingent of professionals vested in the continuation of the current regime. there are systemic and regulatory hurdles. which politician wants to dismantle an industry that still provides determined but not necessarily highly educated individuals the chance to break into the upper middle class?
anindha 9y ago
When I was young before the Internet, it was impossible to book overseas travel without a travel agent. As more and more information became available and presented in a user friendly manner booking travel online became the norm. It will take much longer for the information required to buy or sell to become easily accessible over the Internet but I have no doubt this day will come.
zjaffee 9y ago
I can't really speak on the aspect of buying a home, but when we sold my grandmothers home having a solid real estate agent certainly was mutually beneficial. They knew what needed to be done in regards to quick fix repairs that were far cheaper than the value added to the home when sold, and in turn earned a higher commission fee for themselves. I'm not sure how good redfin is to work with on the sell side of things, but I have a hard time imagining that a flat fee gets you the personal attention needed to be able to sell a home for 10% above what you were hoping to get.
bduerst 9y ago
Back in the early 2000's, there was a realtor group that advertised a $900 flat fee for selling homes. Not sure what happened to them though - could have been a dot com bust.
- kazinator 9y ago
  If I were to guess: they probably went their separate ways to join the RE/Maxes, Coldwell Bankers and Century 21s of the world, where they could more than double their take for the same work.
deleted 9y ago
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javajammer 9y ago
http://walawrealty.com/ http://walawrealty.com/ Flat fee, and for "all the related details" - they represent you as lawyers. I had an exceedingly positive experience buying with them in 2012. I wish their model would become dominant.
rb808 9y ago
RE agents in most of the rest of the world charge 1-2%. 6% is insane, and the buyers agent I really dont think adds value.
paulddraper 9y ago
I recently bought from someone selling through Homie. https://www.homie.com https://www.homie.com About $1000. Initial couple hundred to take pictures, put up a nice sign, and list your house. The balance is paid when you close. Scheduling viewings and offer submission is done through their site. They also offer legal advice. The only really nice feature they lack is HelloSign/similar integration for the paperwork.
- PenguinCoder 9y ago
  I was looking for a company like this to sell my house, instead of through traditional realtor. I see their about page says "On average, we save Utahns over $8,000 per transaction." Is the service only available in Utah?
  - paulddraper 9y ago
    Probably...I thought that might be case but didn't see it on their website when I looked. I live in Utah. I'm sure Homie or similar will be very common within 5 years in most places. --- There are also "flat-fee listing services" that have been around for a long time. They usually only satisfy any legal requirements and get you onto the offical listing sites, but you may want to search for that.
jpmattia 9y ago
> Why does anyone need to pay a whopper commission to some middle-man? Not just a whopper commission, but a commission that causes the buyer's broker to be absolutely incentivized against your interest as a buyer. What a throwback to earlier economic times.
meesles 9y ago
Having just left a job in this exact field, maybe I can give you an insight I haven't seen on here yet: There's a huge monopoly present in real estate data right now. At a very high level: The NAR (National Association of Realtors) licenses real estate agents, they pretty much allow you to do business and you cannot sell houses in the US without their approval. MLSes (Multiple Listing Service) are organizations created for a region/state/city, depending on the size/market. These are exclusively permitted by the NAR. All realtors MUST put their house data on an MLS. These realtors are also forced to pay large amounts to access these feeds. All traditional real estate data only lives in these organizations, with high barriers to extracting and manipulating the data since they want to keep their monopoly. Basically, the real estate world is very entrenched in these monopolistic practices, and we're only now seeing significant efforts to accumulate and dissipate the data in a way that makes it more accessible. Personally, I wouldn't expect any major overhaul as the NAR is a HUGE lobbying group and have gotten a good amount of legislation around real estate on their side. Hope that helps!
krschultz 9y ago
Redfin does more to move in that direction than other listing websites such as Trulia. Redfin is the actual broker on your side of the sale, and they take a smaller cut than most other brokers. The reason it's not cheaper is that few brokers compete on price.

fananta 9y ago

I agree with your point, but realtors are protected but layers of legislation. In many areas the realtor groups almost operate like the taxi cartels.

deleted 9y ago
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rhodysurf 9y ago

I used to think the same way, but then I bought my first house and my realtor was insanely helpful. The entire process is filled with random quagmires that I would have never known how to manage otherwise. Someone with more experience may be more able to go it alone obviously, but my realtor was invaluable.

japhyr 9y ago
I agree. I live in a small isolated town, and I thought realtors were artificially increasing the home prices (not values, but prices) in the small pool of housing available here. But their local knowledge was invaluable in both buying and selling a home. That said, if a buyer and seller agree on a sale independently of any realtor here, we can go to a local realtor and they'll happily facilitate the sale for a flat fee of around $1000. I've done that once, and had a number of friends who also did so. Most of the realtors recognize that the bulk of their commission comes from the listing and marketing process, and the paperwork is just something they know how to do correctly. $1000 is a fair price for knowing that's all being done correctly and fairly.
- ericb 9y ago
  You don't need a realtor, fyi, just a good real estate lawyer, which you generally need anyway when buying/selling a house. A lot of the apparent value of realtors disappears when you do the process yourself. source: have FSBO bought, and FSBO sold, and redfin bought, and worked for Coldwell Banker. Getting on the MLS is cheap/easy now with discount MLS listings--I wouldn't do fsbo without it, even though you usually pay buyer's agents.
  - ferentchak 9y ago
    Do they make you sign a contract or can you put 3% discount for person to person sale? That way they are paying their agent if they decide to use one.
    - ericb 9y ago
      In the MLS listing, you put the amount of commission you are offering for buyer's agent. Then the real estate lawyer draws up the final contract with that included and it comes out of what you get. For direct person to person, I imagine you can just skip that part. If you put that you are willing to pay 0% commission, I think what will happen is that everyone who is actually relying on their buyer's agent to source houses to look at will not be brought to your property, as there is nothing in it for them. You might lose out on a profitable bidding war, or the one customer who might buy the house coming through by doing that, but you might get an extra 2.5% if it works out.
  - opo 9y ago
    >You don't need a realtor, fyi, just a good real estate lawyer, Lawyer prices will obviously be different in different parts of the country, (so maybe a lot cheaper where you are) but I knew someone who arranged a transaction without a realtor and paid a lawyer a lot more than $1,000 to put together all the necessary documents. One thousand seems like a good deal. >...which you generally need anyway when buying/selling a house. You've found it necessary to always consult a lawyer when buying/selling even though realtors were involved? Why? What value did they add?
goshx 9y ago
Have you used TurboTax or an alternative to file your taxes? Would something like that, with step by step and explaining why's and how's not be enough for this purpose?
- dlp211 9y ago
  I think for stable markets; ie: markets where neither the buyer or seller has a distinct advantage; probably. But I just bought in a market where the sellers have a clear advantage and buyers are competing aggressively against one another. Houses in my market have an average listing time of 8 days, almost all with multiple offers, many with dozens of offers. I thought my RE agent wasn't really worth what I knew I would be paying him until we actually went to make an offer. Their knowledge of our circumstance and the local market let us put together an offer that despite not being the highest offer, nor the most favorable closing (I used a VA loan which takes on average 50% longer to close), we still were able to come out on top. My agent helped us get an inspection on the property the day we saw it so that we could wave inspection contingency, knew that we needed to put up more than the standard earnest money to account for our weak closing position, and they were able to accurately predict what the house would appraise for so that we could ensure that we didn't overbid and waive the under appraisal contingency.
dublinben 9y ago
That doesn't explain why they should earn a percentage of the purchase price, and not a flat fee.
- jrs235 9y ago
  They don't get paid unless there is a successful sale. Listing contracts are for a fixed period. There are marketing expenses and time invested to list and market a property. If they don't successfully sell your home they don't get paid and they are out any of their time invested and marketing expenses. High risk, high reward.
  - notadoc 9y ago
    > There are marketing expenses and time invested to list and market a property Putting a house on Zillow takes, what, 15 minutes? Perhaps the exception is very high end real estate, but from what I've seen most of the high end realtors are just really good at networking and schmoozing.
    - jrs235 9y ago
      Add up all the time an agent spends previewing the property before listing, taking calls (especially from crazies) and arranging for showings, showings (including driving to and from), negotiating (writing up offers and counter offers), after acceptance arrangements such as coordinating inspections, final readings, closing arrangements. They only get paid if the deal closes. The amount of effort is variable and unknown upfront (high risk, high reward). Would you be willing to pay an hourly rate or per service rendered UPFRONT fee? I'm sure there are some brokers that offer such things. Most people don't want to part ways with their money before they know they actually sold their home (another nice thing about not having to pay until closing... the seller only pays if and at closing!) How much do knowledgeable and experienced consultants make per hour?
      - bhandziuk 9y ago
        Knowledgeable and experienced consultants typically don't make more than maybe 250 per hour (as a cost the client) that I've seen. That's pretty high at that.
notadoc 9y ago
> The entire process is filled with random quagmires OK, but why is that? And how many of those "random quagmires" are coming from realtors? The real estate industry reminds me of the tax preparation industry or car sales in the USA. My opinion is they are all (by design) intentionally annoying, cumbersome, overly complex, overly expensive, and excessively time consuming, seemingly for no reason other than to protect vested interests. These areas are ripe for dramatic disruption.
- Balgair 9y ago
  They usually come from City Councils, county boards, school levies, HOAs, insurance requirements on page 192.PGP.168, etc. that are changing all the time. Depending on where you are in the US, it really can be that bad very quickly. Ever buy a house? The contract you sign is literally thousands of pages of legalese that may or may not contradict everything else in it. The Real Estate Agents (REAs) give you 'cover' and smooth out all bumps. Joan knows Frank on XYZ council, therefore you'll never ever catch any flack. Freddy is a REA you used and therefore everything is 'above board' as far as a judge cares, next case please. Ahmed knows good and bad home inspectors, it'll take you 3 months of 8 hour days to begin to figure them out. Etc. Yes, corruption/nepotism sucks, PM me when it has passed from the face of the Earth. If you are buying a home in anywhere near a 'desirable' market, use a REA. 5k for 'peace of mind' is more than worth it.
  - abawany 9y ago
    In the 10 or so real estate deals that I have done over the past few years, I have to say that the realtor (even the exceptionally good ones) never pointed out any of the nuances of the perils related to the entities you mentioned above. In all cases, it was me, due to bad past experiences with HOAs for example, who was proactively demanding that I be given the HOA restrictions before making the contract; there were plenty of deals I walked away from when I thought the HOA was power hungry and ridiculous. EDIT: I am not dismissing the role of realtors - they had good tips that I use to this day. Here is one: start the homeowner's insurance purchase/quotes during the option period to ensure that any related surprises here will enable you to walk away during the option period than trying to deal with killing the deal with the much-higher earnest money amount at stake. I have to say that the most insightful article I have ever read about realtors came from the controversial Freakonomics. It clearly outlined the separation of concerns and interests and made it clear to me that if a real estate deal is to work well, the only person responsible is me and me alone.
mox1 9y ago
Agreed, for most people this is by far the single largest monetary transaction they will make (aside from another home purchase) in their entire life. Some form of "assistance" during the process is necessary. I'm a big DIYer and will go to great length to research and do things on my own. My Realtor (Redfin agent) payed for himself and then some during the home buying process. Your paying for their experience and knowledge. My agent making statements like "I had our lawyer review our signed purchase agreement and because of X,Y,Z we are still ok" helped me understand why I'm paying a big company a lot of money to help me out.
ovulator 9y ago
As someone who bought my first house without a realtor involved at all. I don't know what value they could have added. Thanks to Zillow, Redfin and the like it was a piece of cake to locate a house. I found one that was for sale by owner that I liked, we negotiated on a price and came to an agreement. There was a lot of paperwork, but I'm literate and can read. Most of the complex stuff was with the loan and the title company, both of which were more than happy to walk me through the steps of each. I really have no idea what tens of thousands of dollars extra would have bought me. I don't need someone to hold my hand and look at cars with me either.
- duderific 9y ago
  > I found one that was for sale by owner that I liked, we negotiated on a price and came to an agreement. Sounds like you don't live in a very competitive market. Here in the Bay Area, you don't even talk to the owner of the house, as they will have a seller's agent. Generally if a house is desirable, there will be anywhere from 5 to 20 offers on a house. The only way to get your foot in the door is to have your buyer's agent go to bat for you. Ideally they will have a prior relationship with the seller's agent, and have insight as to what kind of offer to make to make you competitive with other offers. I can't imagine buying a house around here without having the expertise that an agent can offer. > I really have no idea what tens of thousands of dollars extra would have bought me. As a buyer, you are not paying anything extra. The commission comes out of the seller's fees. > I don't need someone to hold my hand and look at cars with me either. Buying a house is an order of magnitude more complex and expensive than buying a car. Not really a fair comparison.
  - ryuker16 9y ago
    Actually some would prefer no agent buyers due to contract arrangement. For example, the buyer and seller will split commission but in some cases one side can collect all of it.
- rhodysurf 9y ago
  If i didnt have my realtor I would not have landed my house because of how competitive my market is. My realtor called me at 6 am on a Saturday morning before the listing was even up on zillow or redfin. I was there to see the house that afternoon and had a P&S agreement accepted before Monday morning before anyone else even had a chance to see the house. Also the realtor had contacts of contractors and inspectors that she trusted so that the inspection and repair stages all went way more smoothly than if I was calling random contractors for quotes. Again this doesnt apply depending on the market and price range that you are in.

ssewell 9y ago

Isn't the main value of a realtor the ability to provide access to the home for sale, monitor the visitor, and provide insight in regards to the construction & quality of the home? I don't think most people expect the realtor to recommend random homes based on the buyers preferences, as most people use services, such as RedFin, to narrow down the homes that match their best fit.

berberous 9y ago
And that's worth 3%? The issue with realtors is the exorbitant fees they still charge.
- dmreedy 9y ago
  Have you ever worked with a realtor? The fee may seem exorbitant because you pay it in a lump sum. But if you were to try and calculate their hourly fee, you'll see even the mediocre ones who are only moderately attentive to their clients are often making only a few dollars an hour.
  - ryandrake 9y ago
    Exactly. I worked with a buyer's agent for 2+ years, and during that time saw over 100 houses and submitted about 30 written offers. None of the offers were accepted, so he made $0 from me. I felt kind of bad, but the money he makes from his successful transactions probably makes it worth it. Not my problem. I don't know if they deserve a % of the purchase price, but they definitely ought to at least charge by the hour.
- bradly 9y ago
  In my experience a good realtor will either save you 3% when buying or get you an extra 3% when selling by knowing the area, knowing the right improvements to make, home staging, and negotiating.
- gpawl 9y ago
  It's only exorbitant since the price of housing has skyrocketed in the past 20 years

wyc 9y ago

Buying a house is among the largest purchases of many peoples' lives. It could be worth the $5,000-$50,000 (~6% of value in U.S.) for the piece of mind. People are used to using realtors. I don't think enough economists and business people give culture enough credit for its impact on businesses and finances. It's common enough that if the buyer tries to make direct contact with the seller, all parties are startled and the deal falls through entirely. Next, there are established network effects in the real estate industry. Companies that have tried to offer a flat-fee house brokerage service at scale have been met by massive resistance from existing realtors, who then dissuade their many buyers and sellers from even considering those services. I think this has been a brick wall for a long time.

soVeryTired 9y ago
I'm pretty sure purplebricks in the UK are flat-fee.
Simon_says 9y ago
That fee could easily be 3-6 months salary. That's a hefty price to pay for culture and piece of mind.
- acdha 9y ago
  Spread over a 30 year mortgage? I'm not saying it's nothing but many people really value peace of mind.
  - Simon_says 9y ago
    Is your argument that agents are so expensive that hiring them necessitates taking out a 30-year loan? That's not a great argument. I don't think the time horizon of the mortgage is relevant. 3-month's income is 3-month's income.
    - acdha 9y ago
      > I don't think the time horizon of the mortgage is relevant. I think that view is less prevalent than it might seem. Many people look at this as one large purchase which they intend to use for decades, which involves a number of other upfront expenses but almost always also assumes significant tax savings and appreciation over that same time period. I've heard plenty of people talk about that as just the price to pay for getting in on that long-term gain and clearly it hasn't caused that many people to not buy houses or bail to an alternative so far. One of the reasons for that seems to be that some people value having what they perceive as an expert representing them. I like RedFin – and had a great experience using them when I bought my current house – but it was interesting seeing how some people thought it was great when we mentioned that but others — generally but not exclusively older — were really scared that there was going to be some sort of unnoticed problem with the house[1] or a technicality which would cause the deal to fall through. 1. Yes, they knew this was replacing the realtor and not the inspector. No, that did not end the concern.

jbob2000 9y ago

Have you ever sold a home? Potential buyers will drive you nuts with all the stupid questions they'll ask. A good realtor has the communication skills to move you along to a sale much faster.

svachalek 9y ago
And it only costs about $50,000 for that...

toomuchtodo 9y ago

"I'm still waiting for someone to completely eliminate the need for a software engineer and charge a reasonable flat fee to bolt together some libraries and handle all the related details. Why do we even need software engineers at this point? Everyone can find the libraries and open source tools they need online nowadays. Why does anyone need to pay a whopper paycheck to some middle-man?" You're paying for someone's expertise, like in most industries.

ferentchak 9y ago
I can see some of the expertise coming into play on the selling side. Can you give me a few examples of what kinds of value one gets while buying? From what I can tell the main service that my realtor offered when I buying my place was access to the MLS. We found the houses we wanted to look at and he gave us access. Dollars per hour he was doing very well working with me, although I might be an exception.
- toomuchtodo 9y ago
  In my most recent homebuying experience, my realtor was able to point out several facts about the house based on the surrounding market that saved me about $40k. It also helps that I don't pay for the realtor on the buy side. What's your argument against a good realtor who saves you any amount when it's coming out of the seller's fee? Edit: By the time you've come to visit a home you're buying, the seller has already agreed to the commission percentage with their agent. The money is already spent.
  - hkmurakami 9y ago
    You're surely paying for the realtor in a pass through fashion on the sale price of the home.
  - ferentchak 9y ago
    The money from the seller isn't free. For example there is a chance that I could get them to sell the house to me for less than what I am buying it for. If for example the seller met me half way on those fees that's a decent amount off of cash. When I was buying my home the loan person I worked with is family so she helped me more than my realtor. Looked into neighborhoods for me etc. It could be that they were looking out for me more than normal. I am in a market where houses sell instantly, more or less you look at a house and make an offer within out 24 hours or else it's gone. Which is crazy but the realtor didn't even get much of a chance to look into things here for us.

dvcc 9y ago

Isn't this basically Redfin? It might not be a flat fee, but it is a reduced fee. Also intermediaries are still needed for guidance and walkthroughs, its not like viewing homes online is all there is to it.

ransom1538 9y ago

Mainly they are protected by the MLS listing service. You can buy a house with a flat fee now with a decent RE lawyer.

jrs235 9y ago

In many states, real estate brokers are responsible for ensuring that laws are followed and held accountable by a state government office. This means brokers take on risk and liability. Many states require a brokers license in order to sell real property for another for a fee. Yes, brokers are trying to protect their generous income structure. Brokers (and salespeople) are only paid on successfully selling the property. The truth is not many people want to pay someone per hour or per showing to see houses. You can certainly sell or buy a home without a broker. You are bearing the risks in that case. If you buy and sell a home on your own and the deal falls apart, if the contract was not valid or not enforceable you could owe or lose thousands of dollars. Yes, you can have a lawyer draft the contract but a lawyer can't (in many states) show the property (ADD: and a lawyer is going to charge for each and every offer you written up. You pay regardless of if the sell happens or not). With time I see brokers fees approaching a flat fee for facilitation services only (so long as they don't represent the seller or buyer in the transaction). Why do we still have sports agents? Can't players and teams negotiate on their own?

bdamm 9y ago

Having gone through four home-buying episodes, where my wife (an ex-realtor) spent massive amounts of time trolling Trulia, RedFin, calling police departments, gathering reports from the local City Hall, I can tell you there is still a service to be provided by agents. And anyone who has bought a house knows that the collection of contracts that represents "buying a house" is not a small collection, and errors can be logistical disasters down the road. A good agent is worth 10x their commission. A bad agent, of which there are many, is a waste of money. And the big rub is that people who could be buying homes probably aren't simply because they don't know the dozens of tricks that can be employed to make an unaffordable situation affordable, or able to identify a good deal. If you're comfortable buying a home without any background check, then I guess you don't need a realtor, but I wouldn't do it. Oh, and the laws that protect realtors, toss 'em. What we really need is Yelp for realtors.

fraserharris 9y ago
What is the purpose of calling police departments?
- hkmurakami 9y ago
  Crime in the area, for one.
- jrs235 9y ago
  To determine if any possible meth activity is associated with the home.
notadoc 9y ago
> A good agent is worth 10x their commission. You actually think a 'good' realtor deserves a 60% commission? I can tell you're married to a realtor.
- bdamm 9y ago
  My bad, we're actually pretty good at shrinking the realtor commission, we never pay 6%.

spelunker 9y ago

I was recently a first time homebuyer and my real estate agent was really helpful in basically holding my hand through the process. He walked me through a contract to buy and sell, since I'd never seen one before. He helped me figure out a competitive offer for the house I wanted. He was able to spend time on things like searching for houses or setting up tours while I was working, it was great. Just looking at houses online only scratches the surface of the homebuying process, IMO, and frankly with my full-time job it would have taken me much longer to find a house... assuming I would have even known how to get to closing, which I didn't.

goshx 9y ago

I agree. I've been waiting for this disruption for a while. In the past 5 years all the realtors I had to interact with had to do was to open the property I found and later prepare the documents and tell me where to sign and who to pay, and obviously collect a good chunk of money every year for rentals and the % for sales. Every time I needed their help for something I wouldn't get. I can't see how that could not been replaced by a system of some sort.

jasode 9y ago

>I'm still waiting for someone to completely eliminate the realtor [...] Why do we need realtors at this point? Everyone finds houses themselves online nowadays. The need for realtors comes mostly from the sellers not the buyers. (Yes, some buyers also contract a "buyer's agent" but the point remains that realtors are still desirable to help market and show a home.) Unlike the "dis-intermediation" that happened to travel agents (online flight/hotel booking), and librarians (google searches), or video rental clerks (Netflix), the elimination of realtors to represent the most expensive component in an owner's net worth is not going to happen because of a slick point & click housing website. Consider that the vast majority of people don't even post their garage items on ebay for sale. Compared to that, selling a house is a much more complicated transaction. There's a categorization in sales called "low touch" and "high touch" transactions. A "low touch" transaction would be buying a loaf of bread from the grocery store. For the forseeable future (at least decades), selling homes will be a "high touch" transaction and sellers will want the reassurance and "warm & fuzzies" from another human middleman to help them fetch the best price. (E.g., the owner would presumably hire the appropriate realtor with the reputation and track record to quickly sell homes similar to his/her property.) However, that doesn't mean more efficiencies can't be wrung from the system. Many think the typical realtor's commission of ~6% is way too high so it seems inevitable that entrepreneurs will revolutionize the market. Regardless of the new landscape (e.g. maybe no more MLS), the human intermediaries will still be there.

rgbrgb 9y ago

With Open Listings we started flat fee on the buy side but had a couple problems. First, it was very hard to communicate the value prop to customers. We went to market with something like "we refund the buyer's commission minus our flat fee". This brought up all kinds of questions and often buyers thought we were more expensive than realtors. Saying that we're 50% the price of a traditional realtor ended up being a more compelling message even though there's less savings in many cases. Second, when we're acquiring customers we compete with all of the people charging a much fatter commission. If a realtor is making a 50k commission, they can afford to spend 10k on acquiring a single customer. Assuming an efficient market (which the acquisition side kind of is), a flat fee kind of caps your addressable market because you can only compete with ads at a certain price point (buyers at <400k price points in CA for instance). In some ways this is counteracted by the fact that you can save $1M buyers way more money with the flat fee, but only if you can communicate that message effectively. That said, it looks like redfin found that there's more price elasticity on the sell side. The seller has likely been through the process before, seen how little work agents do, and feels the full agent fee more viscerally at the time of listing. For the buyer, the agent fee is this murky thing that your agent will tell you is paid for by the seller... first time buyers usually don't find out how much it is until they sign the final closing docs. The other difficulty is that the typical 2.5% being offered to the buyer's agent is essentially an advertising cost... in the existing market agents will often steer clients away from low commission listings (not ethical but it happens).

cabinguy 9y ago
"seen how little work agents do..." This is going to sound condescending, but you honestly do not know much about the business you're in.
- rgbrgb 9y ago
  I'm not an agent myself, but I did help start a brokerage and spend most of my time automating busywork for our agents. Our top agents do 5-15 transactions per month in very competitive markets, have competitive acceptance and close rates, and great NPS scores. Agents are absolutely necessary to negotiate with sellers and talk stressed out buyers through the process, but most spend the majority of their time doing lead generation. I talked to an agent from a respectable brokerage in LA the other day who said she spends 95% of her time prospecting for new clients. I'm not by any means saying agents are lazy, I maybe phrased that poorly. Just that if you're looking at the hourly rate the agent is making for the ~10 hours they're spending from offer to close, it's kind of wacky compared to most other types of high skill work (e.g. 10 hours on a 500k home with the typical 2.5% commission is $1,250/hour).

clairity 9y ago

do you really think the value prop of a realtor is that simple? that people willingly pay tens of thousands of dollars for a few "related details"? if it were that easy, why not just throw that business together over the weekend yourself? maybe put the thinking cap on for a few seconds before making a flippant comment about a $100B+ industry? (just one tiny hint: you have to dismantle the MLS network in the process.) yes, it's inefficient, but it's not a valueless middleman. yes, there is additional value that could be unlocked through greater efficiency. but there is a huge contingent of professionals vested in the continuation of the current regime. there are systemic and regulatory hurdles. which politician wants to dismantle an industry that still provides determined but not necessarily highly educated individuals the chance to break into the upper middle class?

anindha 9y ago

When I was young before the Internet, it was impossible to book overseas travel without a travel agent. As more and more information became available and presented in a user friendly manner booking travel online became the norm. It will take much longer for the information required to buy or sell to become easily accessible over the Internet but I have no doubt this day will come.

zjaffee 9y ago

I can't really speak on the aspect of buying a home, but when we sold my grandmothers home having a solid real estate agent certainly was mutually beneficial. They knew what needed to be done in regards to quick fix repairs that were far cheaper than the value added to the home when sold, and in turn earned a higher commission fee for themselves. I'm not sure how good redfin is to work with on the sell side of things, but I have a hard time imagining that a flat fee gets you the personal attention needed to be able to sell a home for 10% above what you were hoping to get.

bduerst 9y ago

Back in the early 2000's, there was a realtor group that advertised a $900 flat fee for selling homes. Not sure what happened to them though - could have been a dot com bust.

kazinator 9y ago
If I were to guess: they probably went their separate ways to join the RE/Maxes, Coldwell Bankers and Century 21s of the world, where they could more than double their take for the same work.

deleted 9y ago

[deleted]

javajammer 9y ago

http://walawrealty.com/ http://walawrealty.com/ Flat fee, and for "all the related details" - they represent you as lawyers. I had an exceedingly positive experience buying with them in 2012. I wish their model would become dominant.

rb808 9y ago

RE agents in most of the rest of the world charge 1-2%. 6% is insane, and the buyers agent I really dont think adds value.

paulddraper 9y ago

I recently bought from someone selling through Homie. https://www.homie.com https://www.homie.com About $1000. Initial couple hundred to take pictures, put up a nice sign, and list your house. The balance is paid when you close. Scheduling viewings and offer submission is done through their site. They also offer legal advice. The only really nice feature they lack is HelloSign/similar integration for the paperwork.

PenguinCoder 9y ago
I was looking for a company like this to sell my house, instead of through traditional realtor. I see their about page says "On average, we save Utahns over $8,000 per transaction." Is the service only available in Utah?
- paulddraper 9y ago
  Probably...I thought that might be case but didn't see it on their website when I looked. I live in Utah. I'm sure Homie or similar will be very common within 5 years in most places. --- There are also "flat-fee listing services" that have been around for a long time. They usually only satisfy any legal requirements and get you onto the offical listing sites, but you may want to search for that.

jpmattia 9y ago

> Why does anyone need to pay a whopper commission to some middle-man? Not just a whopper commission, but a commission that causes the buyer's broker to be absolutely incentivized against your interest as a buyer. What a throwback to earlier economic times.

meesles 9y ago

Having just left a job in this exact field, maybe I can give you an insight I haven't seen on here yet: There's a huge monopoly present in real estate data right now. At a very high level: The NAR (National Association of Realtors) licenses real estate agents, they pretty much allow you to do business and you cannot sell houses in the US without their approval. MLSes (Multiple Listing Service) are organizations created for a region/state/city, depending on the size/market. These are exclusively permitted by the NAR. All realtors MUST put their house data on an MLS. These realtors are also forced to pay large amounts to access these feeds. All traditional real estate data only lives in these organizations, with high barriers to extracting and manipulating the data since they want to keep their monopoly. Basically, the real estate world is very entrenched in these monopolistic practices, and we're only now seeing significant efforts to accumulate and dissipate the data in a way that makes it more accessible. Personally, I wouldn't expect any major overhaul as the NAR is a HUGE lobbying group and have gotten a good amount of legislation around real estate on their side. Hope that helps!

krschultz 9y ago

Redfin does more to move in that direction than other listing websites such as Trulia. Redfin is the actual broker on your side of the sale, and they take a smaller cut than most other brokers. The reason it's not cheaper is that few brokers compete on price.