7 ms·

I wonder if Amazon would ever dive into the home real estate market. With modern day search, realtors provide very little value above doing the paper work, and

I wonder if Amazon would ever dive into the home real estate market. With modern day search, realtors provide very little value above doing the paper work, and that seems very automatable. There's just no reason to pay 6% of every house sale to middle men, but that's the way it currently works. A large company like Amazon or Google could make a ton of money at a much lower rate. I think this makes a lot more sense than going into the restaurant delivery business.

adrianmonk 7y ago
They already have trucks and people used to moving things around. They could sell you a house and have your stuff moved in 2 days. I even have the branding figured out for the moving service: Amazon Prime Movers.
- hi5eyes 7y ago
  give you a discount on furniture/moving/house if you sign up for prime then onboard your entire life into amazons ecosystem, get great exclusive prime deals on the echo/whatever smart shit they want to dump on you
- civility 7y ago
  There's already lots of healthy competition in moving companies. Imagine if the movers wanted a percentage of your home price instead of few hundred for the day's work. The problem with realtors is that they've got a lock on the bureaucratic side, and the existing realty sites (Zillow, Trulia, etc...) are aligned with them. There are upstarts in some cities, but the existing realtors in those places collude to keep the process inefficient. It'll take a behemoth to crack it open, but there'll be a lot of reward for someone big enough to pull it off.
  - llamataboot 7y ago
    How does the collusion work? Just curious since it seems like such an inefficient market (our realtor was a good friend of ours, he /did/ have good local market knowledge and things to say, but no way did he have to do more than 4 or 5 hours of work total for us...)
    - civility 7y ago
      As an example, buyer's agents will not show, or disparage, homes where the agent's get less than their approx 3%. For instance, Trelora in Denver offers a discount to the seller, but they'll offer full rate to the buyer's agent because they know they'll get more traffic that way. You can kind of read that between the lines in their FAQ: https://corporate.trelora.com/faq https://corporate.trelora.com/faq Even if the buyer finds one of these homes on their own, all the buyer's agent needs to say is something scary like, "I've seen deals like this fall apart, and I wouldn't risk tying up your money if you're not dealing with a responsible realtor". Then they'll say something like, "besides, the seller pays the closing costs!" ... which is a huge lie if you consider that the buyer is the only person bringing any money to closing.
    - hbosch 7y ago
      I thought about this a lot during our home buying process. Our agent, too, wasn't asked to do much... because we found the house we wanted online, and had our financing, so the agent didn't have to show us any houses or help us along in any way. She just submitted our offer and that was that. I have heard that realtors, like for instance car dealers, simply have a vested interest in middleman-ing the inventory by way of commission and there are powerful lobbies that protect that interest. I've heard that there is cartel-like control over the MLS listing service, which requires you to be a member of the Realtors Association for access, and is a shared venture between all the major real estate companies -- which, if you aren't a part of, basically means you can't even know what house is for sale. I don't know if any of that's true. In this day in age, it's hard for me to fully trust a process like buying property that is just so opaque. Purely for conversation purposes, an anecdote of mine: we bought a house and we were willing to pay a certain amount over, no more, because we had a hard budget. So we told our agent, we want this house for list price. The agent says, we can do that, but "the seller is expecting multiple offers and they are reviewing them tomorrow". Okay, fine, whatever. So we put in our offer, with an escalation clause going up another $15k to our theoretical max. Lo and behold, we have two offers on the table that beat ours. "But they really liked your letter, so is there any way you could make your offer better? Borrow money from your family? Take an employer loan from your 401k?" So I say no, absolutely not, I won't be doing that. We'll just wait til next year when we have more money and do this again. Thanks. So a week later, we get a phone call. Oops! Guess what? The top offer bailed unexpectedly, and the 2nd best offer wants time to reconsider. "If you resubmit your offer tonight, I'm sure the seller will accept". Okay, fine, resubmit it. Thirty minutes later, the offer was accepted and we closed in about 20 days from then. It was a crazy ride! And we are definitely happy with the house we got for the price we paid. But at the same time, I'm left to wonder... how do I know those other offers existed? How do I know they weren't just trying to get more money out of us? I suppose I could ask for proof, but even those types of documents have been faked before. I trusted our people and the process seemed above board, but it's one of those things that is so convoluted and human that I felt weird about it then, and I still do to some extent. Perhaps I'm just cynical. It really doesn't keep me up at night, though. Like I said, I'm happy with the place. But the reality was clear: in that industry, it seems so clear that collusion COULD easily exist... and if that's the reality, I'm sure it does exist in at least some instances.
cherioo 7y ago
Redfin is already in that market and it doesn't seem to be doing very well. I'm actually fairly surprised how slow redfin is able to grow and expand their market. Their website felt second to none in terms of usability.
- civility 7y ago
  Redfin looks like they're trying to be a "discount agent". Here is a quote from their front page: > We're full-service, local agents who get to know you over coffee and on home tours, and we use online tools to make you smarter and faster. This isn't what I had in mind at all, and I'm not surprised they have trouble getting traction with that approach. If they save you 1.5% on your half, but the other agent still gets their 3%, you'd only save 25% of the thousands you spent in middle man costs. Meanwhile, all the 3% agents out there are applying pressure to see it fail. In the ideal case where they get both sides, Redfin is only saving you 50%. There is no reason home sale paperwork should cost thousands of dollars to process. Someone like Amazon could eliminate agents altogether. Here is another analogy - imagine TurboTax charged you a percentage of your yearly income instead of a hundred dollars for the "Deluxe" version. That would be insane.
  - sokoloff 7y ago
    > There is no reason home sale paperwork should cost thousands of dollars to process. Someone like Amazon could eliminate agents altogether. It’s a mistake to think that the real estate commission is primarily for paperwork or executing transactions that would have happened anyway. I brought my house to our agent and pushed the sale through. That’s probably a rarity when I think about all the time friends of mine have spent with agents “house hunting”. That time costs money and to a great extent, the fat commissions are paying for a lot of “no commissions”. People seeking to disrupt the “fill out the final transactional paperwork” part of real estate need to figure out how to disrupt the whole value chain, not just the part that looks outrageously overpriced.
    - dagw 7y ago
      In Sweden agents that help with house hunting basically don't exist outside the very very top end of the market. Everybody finds their own houses via ads, book their own viewings with the sellers agent and handles the bidding process themselves. When it comes to paper work the buyer and seller "shares" the same agent who has a fiduciary duty to both parties (even though they're paid by the sellers). With the internet being what it is people should be able to "hunt" their own houses and set up their own viewings.
prostoalex 7y ago
It's expensive to have boots on the ground in every zip code. RedFin hires their own agents full time. OpenListings and Zillow refer online buyers to their affiliated agents who cut them a deal on commission in exchange for leads. You can always list a place with photos and all on Zillow or CraigsList and mention that seller will not pay an agent's commission. End of the day there's a "For Sale by Owner" sign for those driving or walking by. But considering that in the US it's the seller who pays both agents, there are no immediate savings for potential buyers, and some, being new to the home-buying process in general or new to that zip code, would prefer some hand-holding and chit-chatting provided by their agent at no cost to them. Among some not so obvious valuable tidbits that the buyer's agent can provide: * general feel about the neighborhood, whether it's on the rise or in decline * previous scandals and issues, like contaminated water, city attempting to pass an additional levy or tax, house being on the airport path, etc. * potential future improvements, like a light rail station planned nearby * referrals to various local professionals, like inspectors, surveyors, painters, or movers * any other new developments in town or neighborhoods that the buyer might not have considered, especially when shopping remotely
- ralph84 7y ago
  Theoretically agents could do these things, but most don't. They want deals to close. Giving you reasons not to buy doesn't close deals. If it turns out you don't like the house they'll be happy to sell it for you later.
  - prostoalex 7y ago
    It probably varies by the agent, but I have had good experience with a real estate agent being on the buying side. His reasoning was that the seller's agent was on the clock to close the deal on that one property he got assigned, whereas the buyer's agent would make roughly same amount of money on any property I would end up purchasing, so he had no reason to pressure me into closing.
    - civility 7y ago
      A good conman leaves you feeling that you weren't cheated.

adrianmonk 7y ago

They already have trucks and people used to moving things around. They could sell you a house and have your stuff moved in 2 days. I even have the branding figured out for the moving service: Amazon Prime Movers.

hi5eyes 7y ago
give you a discount on furniture/moving/house if you sign up for prime then onboard your entire life into amazons ecosystem, get great exclusive prime deals on the echo/whatever smart shit they want to dump on you
civility 7y ago
There's already lots of healthy competition in moving companies. Imagine if the movers wanted a percentage of your home price instead of few hundred for the day's work. The problem with realtors is that they've got a lock on the bureaucratic side, and the existing realty sites (Zillow, Trulia, etc...) are aligned with them. There are upstarts in some cities, but the existing realtors in those places collude to keep the process inefficient. It'll take a behemoth to crack it open, but there'll be a lot of reward for someone big enough to pull it off.
- llamataboot 7y ago
  How does the collusion work? Just curious since it seems like such an inefficient market (our realtor was a good friend of ours, he /did/ have good local market knowledge and things to say, but no way did he have to do more than 4 or 5 hours of work total for us...)
  - civility 7y ago
    As an example, buyer's agents will not show, or disparage, homes where the agent's get less than their approx 3%. For instance, Trelora in Denver offers a discount to the seller, but they'll offer full rate to the buyer's agent because they know they'll get more traffic that way. You can kind of read that between the lines in their FAQ: https://corporate.trelora.com/faq https://corporate.trelora.com/faq Even if the buyer finds one of these homes on their own, all the buyer's agent needs to say is something scary like, "I've seen deals like this fall apart, and I wouldn't risk tying up your money if you're not dealing with a responsible realtor". Then they'll say something like, "besides, the seller pays the closing costs!" ... which is a huge lie if you consider that the buyer is the only person bringing any money to closing.
  - hbosch 7y ago
    I thought about this a lot during our home buying process. Our agent, too, wasn't asked to do much... because we found the house we wanted online, and had our financing, so the agent didn't have to show us any houses or help us along in any way. She just submitted our offer and that was that. I have heard that realtors, like for instance car dealers, simply have a vested interest in middleman-ing the inventory by way of commission and there are powerful lobbies that protect that interest. I've heard that there is cartel-like control over the MLS listing service, which requires you to be a member of the Realtors Association for access, and is a shared venture between all the major real estate companies -- which, if you aren't a part of, basically means you can't even know what house is for sale. I don't know if any of that's true. In this day in age, it's hard for me to fully trust a process like buying property that is just so opaque. Purely for conversation purposes, an anecdote of mine: we bought a house and we were willing to pay a certain amount over, no more, because we had a hard budget. So we told our agent, we want this house for list price. The agent says, we can do that, but "the seller is expecting multiple offers and they are reviewing them tomorrow". Okay, fine, whatever. So we put in our offer, with an escalation clause going up another $15k to our theoretical max. Lo and behold, we have two offers on the table that beat ours. "But they really liked your letter, so is there any way you could make your offer better? Borrow money from your family? Take an employer loan from your 401k?" So I say no, absolutely not, I won't be doing that. We'll just wait til next year when we have more money and do this again. Thanks. So a week later, we get a phone call. Oops! Guess what? The top offer bailed unexpectedly, and the 2nd best offer wants time to reconsider. "If you resubmit your offer tonight, I'm sure the seller will accept". Okay, fine, resubmit it. Thirty minutes later, the offer was accepted and we closed in about 20 days from then. It was a crazy ride! And we are definitely happy with the house we got for the price we paid. But at the same time, I'm left to wonder... how do I know those other offers existed? How do I know they weren't just trying to get more money out of us? I suppose I could ask for proof, but even those types of documents have been faked before. I trusted our people and the process seemed above board, but it's one of those things that is so convoluted and human that I felt weird about it then, and I still do to some extent. Perhaps I'm just cynical. It really doesn't keep me up at night, though. Like I said, I'm happy with the place. But the reality was clear: in that industry, it seems so clear that collusion COULD easily exist... and if that's the reality, I'm sure it does exist in at least some instances.

cherioo 7y ago

Redfin is already in that market and it doesn't seem to be doing very well. I'm actually fairly surprised how slow redfin is able to grow and expand their market. Their website felt second to none in terms of usability.

civility 7y ago
Redfin looks like they're trying to be a "discount agent". Here is a quote from their front page: > We're full-service, local agents who get to know you over coffee and on home tours, and we use online tools to make you smarter and faster. This isn't what I had in mind at all, and I'm not surprised they have trouble getting traction with that approach. If they save you 1.5% on your half, but the other agent still gets their 3%, you'd only save 25% of the thousands you spent in middle man costs. Meanwhile, all the 3% agents out there are applying pressure to see it fail. In the ideal case where they get both sides, Redfin is only saving you 50%. There is no reason home sale paperwork should cost thousands of dollars to process. Someone like Amazon could eliminate agents altogether. Here is another analogy - imagine TurboTax charged you a percentage of your yearly income instead of a hundred dollars for the "Deluxe" version. That would be insane.
- sokoloff 7y ago
  > There is no reason home sale paperwork should cost thousands of dollars to process. Someone like Amazon could eliminate agents altogether. It’s a mistake to think that the real estate commission is primarily for paperwork or executing transactions that would have happened anyway. I brought my house to our agent and pushed the sale through. That’s probably a rarity when I think about all the time friends of mine have spent with agents “house hunting”. That time costs money and to a great extent, the fat commissions are paying for a lot of “no commissions”. People seeking to disrupt the “fill out the final transactional paperwork” part of real estate need to figure out how to disrupt the whole value chain, not just the part that looks outrageously overpriced.
  - dagw 7y ago
    In Sweden agents that help with house hunting basically don't exist outside the very very top end of the market. Everybody finds their own houses via ads, book their own viewings with the sellers agent and handles the bidding process themselves. When it comes to paper work the buyer and seller "shares" the same agent who has a fiduciary duty to both parties (even though they're paid by the sellers). With the internet being what it is people should be able to "hunt" their own houses and set up their own viewings.

prostoalex 7y ago

It's expensive to have boots on the ground in every zip code. RedFin hires their own agents full time. OpenListings and Zillow refer online buyers to their affiliated agents who cut them a deal on commission in exchange for leads. You can always list a place with photos and all on Zillow or CraigsList and mention that seller will not pay an agent's commission. End of the day there's a "For Sale by Owner" sign for those driving or walking by. But considering that in the US it's the seller who pays both agents, there are no immediate savings for potential buyers, and some, being new to the home-buying process in general or new to that zip code, would prefer some hand-holding and chit-chatting provided by their agent at no cost to them. Among some not so obvious valuable tidbits that the buyer's agent can provide: * general feel about the neighborhood, whether it's on the rise or in decline * previous scandals and issues, like contaminated water, city attempting to pass an additional levy or tax, house being on the airport path, etc. * potential future improvements, like a light rail station planned nearby * referrals to various local professionals, like inspectors, surveyors, painters, or movers * any other new developments in town or neighborhoods that the buyer might not have considered, especially when shopping remotely

ralph84 7y ago
Theoretically agents could do these things, but most don't. They want deals to close. Giving you reasons not to buy doesn't close deals. If it turns out you don't like the house they'll be happy to sell it for you later.
- prostoalex 7y ago
  It probably varies by the agent, but I have had good experience with a real estate agent being on the buying side. His reasoning was that the seller's agent was on the clock to close the deal on that one property he got assigned, whereas the buyer's agent would make roughly same amount of money on any property I would end up purchasing, so he had no reason to pressure me into closing.
  - civility 7y ago
    A good conman leaves you feeling that you weren't cheated.