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Zillow CEO: Redfin ‘a threat to organized real estate’

15 points by hvo 9y ago

dpkonofa 9y ago
In the same way the Uber is a threat to organized taxi services? Real estate agents have always been middlemen in the real estate transaction. Giving buyers/sellers the option to complete transactions with or without additional middlemen seems like a benefit for organized real estate from the buyer/seller perspective, doesn't it? Of course that's going to be a threat to everyone in the middle that makes money off the process. I've always thought that making the MLS exclusive was bullshit to begin with. As long as people have the choice to still work with agents (who obviously have experience and first-hand knowledge that you only get from that job), let it be a threat.
metaphorm 9y ago
I used to work in the real estate tech industry. The vast majority of companies in that space view brokerages as their primary revenue source and develop software designed to give brokers more structural advantages to extract middle-man profits from renters and buyers. Zillow is the largest and most successful RE tech co to pursue that business model but they aren't alone. Redfin is attempting a different business model that is in many ways hostile to brokerages. This is political stuff, basically. Changes to the relationship between landlords/sellers, brokers, and renters/buyers will have very large scale economic consequences and also likely result in long term changes to the way neighborhoods are constituted and populated.
- nambit 9y ago
  It won't affect the market too much if brokers are taken out of the equation. Most people only use brokers nowadays (at least in the bigger cities) for paperwork.
  - taobility 9y ago
    yeah, for me, I prepared all the staff by myself when trying to buy a property. I just need an agent to make the offer, but I don't think that work worth 3% of the price
    - mtanski 9y ago
      My lawyer (required by law in NY) did a lot more work for a small fixed fee then my real estate agent. If I'm buying another place in the future, I'm skipping a buyers agent and using the same lawyer. On the sales side I'd still consider using one due to them arranging pictures, running open houses, following up with buyers. Depending on difficulty of sale / commission structure it's worth it.
      - feistypharit 9y ago
        Be aware that the way most seller's agent contracts are written, if the buyer has no agent, then the seller agents gets both (e.g. 6%). The reason is, they technically transfer the full commission for both agents to the sellers firm, then they kick back half to the buyer agent. It's hard to avoid paying agents when buying a house.
        mtanski 9y ago
        I'm aware of the fact, but almost most sellers agents rather get 4% or 4.5% rather then 3% (which is what happens when there is a buyers agent).
ausjke 9y ago
basically, with real estate info easily accessible these days, agents do not worth 6% anymore, they might be worthing 1% for paperwork and some very basic consultation, but that's it, in my opinion, that can also be eliminated, we should be able to buy house like buying a car, or like buying items from the supermarket, because, 6% is too much these days.

15 points by hvo 9y ago

In the same way the Uber is a threat to organized taxi services? Real estate agents have always been middlemen in the real estate transaction. Giving buyers/sellers the option to complete transactions with or without additional middlemen seems like a benefit for organized real estate from the buyer/seller perspective, doesn't it? Of course that's going to be a threat to everyone in the middle that makes money off the process. I've always thought that making the MLS exclusive was bullshit to begin with. As long as people have the choice to still work with agents (who obviously have experience and first-hand knowledge that you only get from that job), let it be a threat.

metaphorm 9y ago

I used to work in the real estate tech industry. The vast majority of companies in that space view brokerages as their primary revenue source and develop software designed to give brokers more structural advantages to extract middle-man profits from renters and buyers. Zillow is the largest and most successful RE tech co to pursue that business model but they aren't alone. Redfin is attempting a different business model that is in many ways hostile to brokerages. This is political stuff, basically. Changes to the relationship between landlords/sellers, brokers, and renters/buyers will have very large scale economic consequences and also likely result in long term changes to the way neighborhoods are constituted and populated.

nambit 9y ago
It won't affect the market too much if brokers are taken out of the equation. Most people only use brokers nowadays (at least in the bigger cities) for paperwork.
- taobility 9y ago
  yeah, for me, I prepared all the staff by myself when trying to buy a property. I just need an agent to make the offer, but I don't think that work worth 3% of the price
  - mtanski 9y ago
    My lawyer (required by law in NY) did a lot more work for a small fixed fee then my real estate agent. If I'm buying another place in the future, I'm skipping a buyers agent and using the same lawyer. On the sales side I'd still consider using one due to them arranging pictures, running open houses, following up with buyers. Depending on difficulty of sale / commission structure it's worth it.
    - feistypharit 9y ago
      Be aware that the way most seller's agent contracts are written, if the buyer has no agent, then the seller agents gets both (e.g. 6%). The reason is, they technically transfer the full commission for both agents to the sellers firm, then they kick back half to the buyer agent. It's hard to avoid paying agents when buying a house.
      - mtanski 9y ago
        I'm aware of the fact, but almost most sellers agents rather get 4% or 4.5% rather then 3% (which is what happens when there is a buyers agent).

ausjke 9y ago

basically, with real estate info easily accessible these days, agents do not worth 6% anymore, they might be worthing 1% for paperwork and some very basic consultation, but that's it, in my opinion, that can also be eliminated, we should be able to buy house like buying a car, or like buying items from the supermarket, because, 6% is too much these days.