5 ms·

> The criticism of iBuyers is not limited to internet users. Competitors and local real estate agents are starting to voice their concerns with the model and sa

by bko 5y ago

> The criticism of iBuyers is not limited to internet users. Competitors and local real estate agents are starting to voice their concerns with the model and say they know of a better way. If real estate agents don't like this, then I'm a fan. The real estate market is basically a cartel of entrenched interests. In my experience, most of the research done before buying a home has been done by the individual. 6% commission made sense when the broker would drive you around and help you shop neighborhoods and inform you. Today when you see a home you're more likely to know more than the broker because you may be looking at a handful of homes while he may represent dozens or more. Renting is even crazier. I know people that paid 1.5 - 2 months commission on a rental in NYC (2-4k per month) for a one year lease. The agent spent all of 15 minutes with the client and would even arrange multiple people to view the apartment at once. The fact that commissions have not come down even as home prices have gone up over the decades tells you a lot.

dehrmann 5y ago
I recently saw a stackexchange post on if a buyer's interests are aligned with the agent's, and the short answer is "no." The most obvious example is there isn't even an incentive to get buyers the best price.
- gruez 5y ago
  more on this: https://www.youtube.com/watch?v=aFYlgqv3T-w https://www.youtube.com/watch?v=aFYlgqv3T-w tl;dw: if you wait longer for a better offer and you get a $10k price increase, the realtor might only get $150. That absolutely pales in comparison to how much the real estate agent can get if he sold another house.
conception 5y ago
You can hate this and hate real estate agents. Supporting Zillow’s attempts to artificially inflate home prices also isn’t great. Or corporate America’s current fascination with purchasing single family homes. Both are bad. Don’t be a fan of terrible things just because someone you also don’t like is against it.
- bko 5y ago
  If Zillow wants to make me an offer for my home, sight unseen, I don't see how that's a bad thing. I can always refuse. As a buyer I guess they're competing with me but they're likely to move quicker on selling the home. I've been screwed over when buying a home where the selling broker is dishonest and gives preferential treatment to his clients since he earns double commission if he's both buying and selling agent. Not to mention the bizarre practice of blind bidding. I made 6 offers on homes, all at ask price only to be told others bid and I have a few days to up my offer. By how much? Anyone's guess...
  - adamredwoods 5y ago
    Ouch, yes I think it is odd to have a broker manage both seller and buyer. As for blind bidding, this is where our realtor did a great job, by inquiring with the selling realtor to find out where bids were and finding comparable houses recently sold. Also, on one house we bid low on, our realtor was able to convince the seller to come back with a counter offer.
jiveturkey 5y ago
> Today when you see a home you're more likely to know more than the broker I don't think that's true. - First time buyers. As a first time buyer, you are likely to know very little about the process, as well as what to look for. Red flags and such. You'll have seen the photos and read the MLS facts. This is just trivial info. - Local conditions. If you're not buying in a neighborhood where you already live, you need local expertise. - Inspection. For states where the seller shows you an inspection report, you want someone who has seen it all, to read between the lines for you. - Pre-filtering. Brokers get to go on broker tours, before the house hits the market (if it hits the market!). So the good local agents will already be familiar with the property when it hits MLS. This can be a valuable time-saver. That said, most agents are noobs and provide none of that value. They are worthless. The experienced and good ones are worth every penny. I've done about a dozen real estate transactions, incl. 1 commercial transaction. I know almost all of the things by now. I still use an agent. I think the real problem is that there is no certification process. I mean, there hardly could be. A real estate license is garbage, easily obtained. Agents get into the field very easily, and new buyers have no idea how to assess their agent. At least for licensed trades, their is the local board and Yelp. We need such a thing for agents as well, because they do provide value, if you have a good one. This is really coming to a head now, with the super tight market. In this market, the value of an agent seems low to most, because as seller you think you'll get premium price regardless, and as buyer you think you need to make a top offer, again, regardless. That said, it is definitely a cartel and needs to change.
djanogo 5y ago
Don't forget the title insurance scam which takes out ~0.75% as closing fees. Look up their pay out rates and that industry's lobbying. Same few companies make 0.75% insuring new customer from previous customer every time the same house gets sold.
- bko 5y ago
  Yes! Thanks for bringing this up. There's also a state minimum for title insurance. In my state its set by "New Jersey Department of Banking and Insurance". Thank God for state regulators protecting us little guys from paying too little for title insurance.

by bko 5y ago

dehrmann 5y ago

I recently saw a stackexchange post on if a buyer's interests are aligned with the agent's, and the short answer is "no." The most obvious example is there isn't even an incentive to get buyers the best price.

gruez 5y ago
more on this: https://www.youtube.com/watch?v=aFYlgqv3T-w https://www.youtube.com/watch?v=aFYlgqv3T-w tl;dw: if you wait longer for a better offer and you get a $10k price increase, the realtor might only get $150. That absolutely pales in comparison to how much the real estate agent can get if he sold another house.

conception 5y ago

You can hate this and hate real estate agents. Supporting Zillow’s attempts to artificially inflate home prices also isn’t great. Or corporate America’s current fascination with purchasing single family homes. Both are bad. Don’t be a fan of terrible things just because someone you also don’t like is against it.

bko 5y ago
If Zillow wants to make me an offer for my home, sight unseen, I don't see how that's a bad thing. I can always refuse. As a buyer I guess they're competing with me but they're likely to move quicker on selling the home. I've been screwed over when buying a home where the selling broker is dishonest and gives preferential treatment to his clients since he earns double commission if he's both buying and selling agent. Not to mention the bizarre practice of blind bidding. I made 6 offers on homes, all at ask price only to be told others bid and I have a few days to up my offer. By how much? Anyone's guess...
- adamredwoods 5y ago
  Ouch, yes I think it is odd to have a broker manage both seller and buyer. As for blind bidding, this is where our realtor did a great job, by inquiring with the selling realtor to find out where bids were and finding comparable houses recently sold. Also, on one house we bid low on, our realtor was able to convince the seller to come back with a counter offer.

jiveturkey 5y ago

> Today when you see a home you're more likely to know more than the broker I don't think that's true. - First time buyers. As a first time buyer, you are likely to know very little about the process, as well as what to look for. Red flags and such. You'll have seen the photos and read the MLS facts. This is just trivial info. - Local conditions. If you're not buying in a neighborhood where you already live, you need local expertise. - Inspection. For states where the seller shows you an inspection report, you want someone who has seen it all, to read between the lines for you. - Pre-filtering. Brokers get to go on broker tours, before the house hits the market (if it hits the market!). So the good local agents will already be familiar with the property when it hits MLS. This can be a valuable time-saver. That said, most agents are noobs and provide none of that value. They are worthless. The experienced and good ones are worth every penny. I've done about a dozen real estate transactions, incl. 1 commercial transaction. I know almost all of the things by now. I still use an agent. I think the real problem is that there is no certification process. I mean, there hardly could be. A real estate license is garbage, easily obtained. Agents get into the field very easily, and new buyers have no idea how to assess their agent. At least for licensed trades, their is the local board and Yelp. We need such a thing for agents as well, because they do provide value, if you have a good one. This is really coming to a head now, with the super tight market. In this market, the value of an agent seems low to most, because as seller you think you'll get premium price regardless, and as buyer you think you need to make a top offer, again, regardless. That said, it is definitely a cartel and needs to change.

djanogo 5y ago

Don't forget the title insurance scam which takes out ~0.75% as closing fees. Look up their pay out rates and that industry's lobbying. Same few companies make 0.75% insuring new customer from previous customer every time the same house gets sold.

bko 5y ago
Yes! Thanks for bringing this up. There's also a state minimum for title insurance. In my state its set by "New Jersey Department of Banking and Insurance". Thank God for state regulators protecting us little guys from paying too little for title insurance.