10 ms·

The Hot Property That’s Next on Tech’s Agenda: Real Estate

54 points by ryanj20021 8y ago

deleted 8y ago
[deleted]
brightball 8y ago
It will be interesting to see if any of this goes anywhere. Real Estate is one of the tougher markets to really disrupt because of the amount of licensing, regulation and the fact that the local MLS is usually controlled by the local real estate group. You have to pay a fee to join each one. I've heard a lot of tech people clamoring for a central MLS service but the local groups are well aware that controlling the listings protects the entire field. There's so many hands in the pot from banks to inspectors to attorneys to insurance before you even get into the liability insurance that each one of them (and the realtors) have to carry for these transactions...since there are so many opportunities to get sued. It's not going to be an easy nut to crack, but it should be fun to watch all this money try.
- crispyambulance 8y ago
  > It's not going to be an easy nut to crack, but it should be fun to watch all this money try. Yeah, I can imagine the pitches... "we're going to be the UBER of real estate..." Or maybe they'll use "UBER" as a verb: "Let's 'UBER' the real estate market!"
- tootie 8y ago
  There will be a lot of pushback but it's also really valuable. Just based on my experience in NYC, brokers are taking 6% fees on million dollar homes while most are just pushy and dishonest. The buying process is complicated and heavily regulated, but if I can do my taxes online then buying a house should be easy.
  - emodendroket 8y ago
    > if I can do my taxes online then buying a house should be easy. Uh, should it? I doubt many people sell homes nearly as often as they file taxes.
- imglorp 8y ago
  I just sold a house by myself and the line of people with their hand out is infuriating. Even more frustrating, for providing their automated gesture or nod of a service, they want a PERCENTAGE. For example, to just do all the paperwork, a realtor might offer a "transaction only" service for "only" 1%. Regardless of property value, it's the same paperwork and usually done by a clerk. I instead went to an honest (!) attorney, flat rate for his time, it was around $1500 to do the same task. He reviewed contracts, attended closing, gave advice. Easy, done. I think there's so much monetary friction from these parasites that any automation and fair pricing will erase whole professions.
  - arkades 8y ago
    You don't need an "honest" attorney to get that number. It's normal for RE attorneys to get a flat-ish fee, and RE agents to pull a percentage. And RE attorneys usually make <2k/deal, with a lot of that being add-ons from things like owning their own title company. You paid market rate, as best as I can tell. And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house on the MLS).
    - emodendroket 8y ago
      > And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house on the MLS). Also handle things like showings, no?
      - arkades 8y ago
        True. And showings.
    - imglorp 8y ago
      I didn't involve a realtor, I used the attorney. I just mentioned the realtor's price as comparison. As a side note, they buyer _did_ have a realtor, who was notably annoyed that they were not dealing with a professional, but grudgingly agreed to take _their_ percentage. So I saved on mine at least. Several providers would not talk to me at all, for example the home warranty provider needed some BS realtor ID to sell their product to you. I whined loud enough and they finally agreed to take my money. I think their system is kickback based and they didn't know how to make a sale without sending someone the gratuity.
ianai 8y ago
Caveat: I can’t read the article. I’m just riffing based on my knowledge of RE and personal experiences with tech. As someone who’s researched real estate, I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns. If people can buy homes so easily that they can profit on making superficial changes, then prices will go up far above efficient. That pushes actual “householders” out of the market. Also, look at the dumpster fire that is Silicon Valley RE. If I’m thinking of ways tech may help RE: -Actually providing previously unavailable or unobservable information to buyers. Knowing a home will require expensive repairs soon would, in aggregate, help correct valuations. Alerting people of a home being in a flood plain, hurricane path, etc would help. -Helping potential buyers with otherwise good credit but lacking some of the traditional requirements could help. But again that would probably also make flipping so easy and profitable to really screw up the market. -Disrupting the contractor/developer industry could flush some seriously awful bad actors out. -Making rent and RE cheaper would boost the long term wealth of the country - by diminishing the portion of household income devoted to RE. Particularly, rent. Rent shouldn’t be anywhere near comparable to mortgages. You never get to see rent money again. (Here’s an idea: make a “shitty apartment” insurance. People pay an upfront insurance cost on moving into a new apartment. In return, if at any time during the residence they want to break the lease for a “qualified reason” the insurance helps them negotiate the process and ponies exit costs. Eventually a complex’s insurance premium would be enough to signal to potential renters about a place.)
- baybal2 8y ago
  >I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns If that can amount to help, maybe burning it to the ground will do it? Google Ziroom and what it did to rental market in China. Were something similar to appear and get hold USA, expect American RE companies in big cities to burn down within a year. But I doubt this prospect, I bet rich RE boys will spare no money lobbying to nuke it like they did with Airbnb.
  - ianai 8y ago
    I don’t think they’d have to worry. That business model clashes with the individualism I’ve experienced in the west. Their whole apartment option sounds viable though. They’d have some success here but they’d have to pick their markets well. Certainly, let us not forget a rich RE boy lives in the White House right now.
deleted 8y ago
[deleted]
qubax 8y ago
Hard to tell whether this is a news article or an ad for the featured company. Also, tech has been in real estate for a very long time. Zillow, Trulia, Redfin, etc were supposedly "disrupting and revolutionizing" real estate before smartphones got popular. I remember reading about this more than a decade ago. My god time flies. From 2007. Redfin On 60 Minutes Tonight – Real Estate Market Disruption. https://techcrunch.com/2007/05/13/redfin-on-60-minutes-tonight/ https://techcrunch.com/2007/05/13/redfin-on-60-minutes-tonig... Zillow has created a real estate revolution. http://archive.fortune.com/magazines/fortune/fortune_archive/2007/02/19/8400262/index.htm http://archive.fortune.com/magazines/fortune/fortune_archive...
- lr4444lr 8y ago
  Don't sell short what those companies did for buyers: they freed them from the gatekeeper of a broker. No disrespect to brokers - they're great for sellers and I happily used one - but the analytics and search and sheer awareness of what was on the market they offered to the home buyer was revolutionary IMHO.
  - ghaff 8y ago
    Buyers have a lot more information. When I bought my house 25 years or so ago, I can't tell you how many hours I wasted driving to some listing and discovering it wasn't for me for some reason before stepping foot out my car. On the other hand, I'm not sure to what degree real estate sales have truly been disrupted at the end of the day.
  - alistairSH 8y ago
    Agreed. While Redfin, Realtor.com, etc didn't cut a realtor out of my RE transactions (1 purchase a decade ago, then 1 sale + 1 purchase last year), they did do a good job showing me what was on the market. And not just at a single point in time (when I was actively shopping), but over years, so I could see neighborhoods that were smaller or had less turnover. While actively searching, the often gave me a heads up as to what was coming on the market in the upcoming week - I wasn't at the mercy of the RE agent calling me with new listings. Unfortunately, agents in my area still take a pretty standard % of any transaction, so those tech sites haven't made a dent in the cost of the transaction.
walrus01 8y ago
Most of the huge datacenter builders (digital realty trust, etc) are REITs.
sharemywin 8y ago
So, they are using housing data without taking the bubble into account. They will make money for a while until the market turns then they will lose money when their holdings are 20-40% underwater then it will take 5-10 years before their investment is above water. And the rental market will tank at the same time so, good luck with cashflow. Now let's add maintenance, upkeep etc.
- emodendroket 8y ago
  Who's "they"? This article seems to mostly be about OpenDoor offering to buy homes not in need of major repair and turn around and sell them in 90 days, all while collecting smaller-percentage fees that traditional sellers would. I'm not sure this model is as crazy as you're making it sound. > “The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore ISI, a market research company. But the skepticism often fades as they realize Opendoor makes money by providing a service to home sellers, rather than on price appreciation, Mr. Kim said. Even if the company breaks even on a sale, the transaction fees are a meaningful business.
  - JoeAltmaier 8y ago
    Gotta deal with the lemon issue though. You make one mistake buying, and you have a quarter-million-dollar problem. Takes a lot of transaction fees to recover from that?
    - emodendroket 8y ago
      Sure, but how is this different from the problem faced by, like, CarMax? If your volume is large enough it doesn't matter.
      - JoeAltmaier 8y ago
        All about the rate of mistakes - even a negligible error rate means millions lost a year.
propyinc 8y ago
Real estate has always been a stable asset. The problem with it is that people are used to buying or selling a house a certain way, and they often do it only once or twice in their lifetime. The offer stage is very untransparent and manipulative. The closing process looks so hard that everyone thinks that we should pay 6% to agents and thousands of dollars to title companies. Tech can make the process to be transparent. Propy is doing it with smart contracts. The question is raised whether there are more efficient or straightforward methods of doing transactions of real estate. Why shouldn’t buying properties globally be as simple, as buying a laptop from an online store in a different country? Some of the benefits of being able to purchase real estate globally easily: -You’d able to invest low amounts for a stable return -The real estate market would gain liquidity -You’d have access to multiple markets Blockchain technology is one way this can be done, and we’ve already had successful global real estate transactions on our platform using it.
dano 8y ago
The fees to the buyer on the sale of a $1.1m house are about $60,000 including broker fees of 5%, transfer, title, and many other fees. Fix that, attract buyers, and charge the seller $20k and you've got a heck of a good business. My recent experience in selling a property is that no buyers could find the property and contact me until I hired an agent. Listing it FSBO resulted in calls from agents, not buyers. Every agent had a horse in their stable that they wouldn't share with me unless I paid them a commission. Figure out how to make it emotionally and legally safe for buyers to acquire property without an agent and I think that would help. All to often we think we need representation, which is expensive, when we actually don't.
paulddraper 8y ago
One start up I'm rather excited about is Homie. (I do not work there, but I do live in their home state of Utah.) It's software-enabled realty for home sellers. Costs like $1.5k instead of 3%.

54 points by ryanj20021 8y ago

deleted 8y ago

[deleted]

It will be interesting to see if any of this goes anywhere. Real Estate is one of the tougher markets to really disrupt because of the amount of licensing, regulation and the fact that the local MLS is usually controlled by the local real estate group. You have to pay a fee to join each one. I've heard a lot of tech people clamoring for a central MLS service but the local groups are well aware that controlling the listings protects the entire field. There's so many hands in the pot from banks to inspectors to attorneys to insurance before you even get into the liability insurance that each one of them (and the realtors) have to carry for these transactions...since there are so many opportunities to get sued. It's not going to be an easy nut to crack, but it should be fun to watch all this money try.

crispyambulance 8y ago
> It's not going to be an easy nut to crack, but it should be fun to watch all this money try. Yeah, I can imagine the pitches... "we're going to be the UBER of real estate..." Or maybe they'll use "UBER" as a verb: "Let's 'UBER' the real estate market!"
tootie 8y ago
There will be a lot of pushback but it's also really valuable. Just based on my experience in NYC, brokers are taking 6% fees on million dollar homes while most are just pushy and dishonest. The buying process is complicated and heavily regulated, but if I can do my taxes online then buying a house should be easy.
- emodendroket 8y ago
  > if I can do my taxes online then buying a house should be easy. Uh, should it? I doubt many people sell homes nearly as often as they file taxes.
imglorp 8y ago
I just sold a house by myself and the line of people with their hand out is infuriating. Even more frustrating, for providing their automated gesture or nod of a service, they want a PERCENTAGE. For example, to just do all the paperwork, a realtor might offer a "transaction only" service for "only" 1%. Regardless of property value, it's the same paperwork and usually done by a clerk. I instead went to an honest (!) attorney, flat rate for his time, it was around $1500 to do the same task. He reviewed contracts, attended closing, gave advice. Easy, done. I think there's so much monetary friction from these parasites that any automation and fair pricing will erase whole professions.
- arkades 8y ago
  You don't need an "honest" attorney to get that number. It's normal for RE attorneys to get a flat-ish fee, and RE agents to pull a percentage. And RE attorneys usually make <2k/deal, with a lot of that being add-ons from things like owning their own title company. You paid market rate, as best as I can tell. And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house on the MLS).
  - emodendroket 8y ago
    > And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house on the MLS). Also handle things like showings, no?
    - arkades 8y ago
      True. And showings.
  - imglorp 8y ago
    I didn't involve a realtor, I used the attorney. I just mentioned the realtor's price as comparison. As a side note, they buyer _did_ have a realtor, who was notably annoyed that they were not dealing with a professional, but grudgingly agreed to take _their_ percentage. So I saved on mine at least. Several providers would not talk to me at all, for example the home warranty provider needed some BS realtor ID to sell their product to you. I whined loud enough and they finally agreed to take my money. I think their system is kickback based and they didn't know how to make a sale without sending someone the gratuity.

ianai 8y ago

Caveat: I can’t read the article. I’m just riffing based on my knowledge of RE and personal experiences with tech. As someone who’s researched real estate, I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns. If people can buy homes so easily that they can profit on making superficial changes, then prices will go up far above efficient. That pushes actual “householders” out of the market. Also, look at the dumpster fire that is Silicon Valley RE. If I’m thinking of ways tech may help RE: -Actually providing previously unavailable or unobservable information to buyers. Knowing a home will require expensive repairs soon would, in aggregate, help correct valuations. Alerting people of a home being in a flood plain, hurricane path, etc would help. -Helping potential buyers with otherwise good credit but lacking some of the traditional requirements could help. But again that would probably also make flipping so easy and profitable to really screw up the market. -Disrupting the contractor/developer industry could flush some seriously awful bad actors out. -Making rent and RE cheaper would boost the long term wealth of the country - by diminishing the portion of household income devoted to RE. Particularly, rent. Rent shouldn’t be anywhere near comparable to mortgages. You never get to see rent money again. (Here’s an idea: make a “shitty apartment” insurance. People pay an upfront insurance cost on moving into a new apartment. In return, if at any time during the residence they want to break the lease for a “qualified reason” the insurance helps them negotiate the process and ponies exit costs. Eventually a complex’s insurance premium would be enough to signal to potential renters about a place.)

baybal2 8y ago
>I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns If that can amount to help, maybe burning it to the ground will do it? Google Ziroom and what it did to rental market in China. Were something similar to appear and get hold USA, expect American RE companies in big cities to burn down within a year. But I doubt this prospect, I bet rich RE boys will spare no money lobbying to nuke it like they did with Airbnb.
- ianai 8y ago
  I don’t think they’d have to worry. That business model clashes with the individualism I’ve experienced in the west. Their whole apartment option sounds viable though. They’d have some success here but they’d have to pick their markets well. Certainly, let us not forget a rich RE boy lives in the White House right now.

deleted 8y ago

[deleted]

qubax 8y ago

Hard to tell whether this is a news article or an ad for the featured company. Also, tech has been in real estate for a very long time. Zillow, Trulia, Redfin, etc were supposedly "disrupting and revolutionizing" real estate before smartphones got popular. I remember reading about this more than a decade ago. My god time flies. From 2007. Redfin On 60 Minutes Tonight – Real Estate Market Disruption. https://techcrunch.com/2007/05/13/redfin-on-60-minutes-tonight/ https://techcrunch.com/2007/05/13/redfin-on-60-minutes-tonig... Zillow has created a real estate revolution. http://archive.fortune.com/magazines/fortune/fortune_archive/2007/02/19/8400262/index.htm http://archive.fortune.com/magazines/fortune/fortune_archive...

lr4444lr 8y ago
Don't sell short what those companies did for buyers: they freed them from the gatekeeper of a broker. No disrespect to brokers - they're great for sellers and I happily used one - but the analytics and search and sheer awareness of what was on the market they offered to the home buyer was revolutionary IMHO.
- ghaff 8y ago
  Buyers have a lot more information. When I bought my house 25 years or so ago, I can't tell you how many hours I wasted driving to some listing and discovering it wasn't for me for some reason before stepping foot out my car. On the other hand, I'm not sure to what degree real estate sales have truly been disrupted at the end of the day.
- alistairSH 8y ago
  Agreed. While Redfin, Realtor.com, etc didn't cut a realtor out of my RE transactions (1 purchase a decade ago, then 1 sale + 1 purchase last year), they did do a good job showing me what was on the market. And not just at a single point in time (when I was actively shopping), but over years, so I could see neighborhoods that were smaller or had less turnover. While actively searching, the often gave me a heads up as to what was coming on the market in the upcoming week - I wasn't at the mercy of the RE agent calling me with new listings. Unfortunately, agents in my area still take a pretty standard % of any transaction, so those tech sites haven't made a dent in the cost of the transaction.

walrus01 8y ago

Most of the huge datacenter builders (digital realty trust, etc) are REITs.

sharemywin 8y ago

So, they are using housing data without taking the bubble into account. They will make money for a while until the market turns then they will lose money when their holdings are 20-40% underwater then it will take 5-10 years before their investment is above water. And the rental market will tank at the same time so, good luck with cashflow. Now let's add maintenance, upkeep etc.

emodendroket 8y ago
Who's "they"? This article seems to mostly be about OpenDoor offering to buy homes not in need of major repair and turn around and sell them in 90 days, all while collecting smaller-percentage fees that traditional sellers would. I'm not sure this model is as crazy as you're making it sound. > “The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore ISI, a market research company. But the skepticism often fades as they realize Opendoor makes money by providing a service to home sellers, rather than on price appreciation, Mr. Kim said. Even if the company breaks even on a sale, the transaction fees are a meaningful business.
- JoeAltmaier 8y ago
  Gotta deal with the lemon issue though. You make one mistake buying, and you have a quarter-million-dollar problem. Takes a lot of transaction fees to recover from that?
  - emodendroket 8y ago
    Sure, but how is this different from the problem faced by, like, CarMax? If your volume is large enough it doesn't matter.
    - JoeAltmaier 8y ago
      All about the rate of mistakes - even a negligible error rate means millions lost a year.

propyinc 8y ago

Real estate has always been a stable asset. The problem with it is that people are used to buying or selling a house a certain way, and they often do it only once or twice in their lifetime. The offer stage is very untransparent and manipulative. The closing process looks so hard that everyone thinks that we should pay 6% to agents and thousands of dollars to title companies. Tech can make the process to be transparent. Propy is doing it with smart contracts. The question is raised whether there are more efficient or straightforward methods of doing transactions of real estate. Why shouldn’t buying properties globally be as simple, as buying a laptop from an online store in a different country? Some of the benefits of being able to purchase real estate globally easily: -You’d able to invest low amounts for a stable return -The real estate market would gain liquidity -You’d have access to multiple markets Blockchain technology is one way this can be done, and we’ve already had successful global real estate transactions on our platform using it.

dano 8y ago

The fees to the buyer on the sale of a $1.1m house are about $60,000 including broker fees of 5%, transfer, title, and many other fees. Fix that, attract buyers, and charge the seller $20k and you've got a heck of a good business. My recent experience in selling a property is that no buyers could find the property and contact me until I hired an agent. Listing it FSBO resulted in calls from agents, not buyers. Every agent had a horse in their stable that they wouldn't share with me unless I paid them a commission. Figure out how to make it emotionally and legally safe for buyers to acquire property without an agent and I think that would help. All to often we think we need representation, which is expensive, when we actually don't.

paulddraper 8y ago

One start up I'm rather excited about is Homie. (I do not work there, but I do live in their home state of Utah.) It's software-enabled realty for home sellers. Costs like $1.5k instead of 3%.