4 ms·

I live in Canada, and the real estate business is such a mafia. They are leeches, and I'm not sure how much value these real estate agents are providing. It ba

I live in Canada, and the real estate business is such a mafia. They are leeches, and I'm not sure how much value these real estate agents are providing. It baffles me how this industry has not yet been disrupted by an outsider, like Uber did with taxis. I still remember when taxi licenses costed a fortune, and you had the exact same leeches exploiting it. They were seen as an investment in some cities, like NYC. I know there are useless regulations that keep these agents being needed, but so there were with taxis as well, and Uber did not give a crap.

ethbr0 5y ago
In the case of real estate, the entrenched transaction businesses control both supply and demand, and hence are more able to block new entrants. In the case of Uber, supply (people who own vehicles) was effectively unlimited and independent.
- boplicity 5y ago
  Uber is an interesting comparison, because their primary competitive strategy was to ignore existing government regulations. Regulations, of course, are a huge issue in the real estate industry. Maybe someone can step in and invest a many billions of dollars in real estate -- while ignoring the red-tape regulations that often prevent building? This seems unlikely, but could certainly be a path towards disruption. The difference, with Uber, of course, is their cost of capital was relatively low. They didn't have to buy vehicles, for example. (Imagine having to tear down a few multi-billion dollar real estate developments. Yikes.)
  - Spooky23 5y ago
    Uber was just an obvious con that demonstrated the danger of unrestrained capital and an era of ineffective government. Real Estate isn't a regulatory trap; it's an information trap. You can buy and sell property direct. All of the legal stuff is (nominally) done by attorneys. But the association of realtors controls the listing service and makes discovery easy. Like all salespeople, realtors add "value". When you've been in 2,000 houses, you pick up insights that are useful and learn about neighborhoods. The information is used for both good and bad purposes. Most of the disruptors do stupid shit with stupid investor money or integrate with the existing players and add some value.
    - ethbr0 5y ago
      > or integrate with the existing players and add some value Since 1973. https://en.m.wikipedia.org/wiki/RE/MAX https://en.m.wikipedia.org/wiki/RE/MAX
    - boplicity 5y ago
      > Real Estate isn't a regulatory trap; it's an information trap. No -- you're confusing real estate sales with real estate. Real estate is one of the most highly regulated industries out there. You literally can't make any significant changes to most properties without a significant permitting process that goes through many layers of regulations. Not to mention the many real estate developments that are never even a possibility because of regulation. I'm not against regulation -- it can be a very good thing -- but it is clearly at the core of the real estate problem. Society has decided, via regulations, to starve the supply of housing.
- InitialBP 5y ago
  I would add that Uber has traditionally operated at a loss, and on top of that they don't provide the same level of benefits and payment to their "contractors".(whether or not they should is a different question) While they did disrupt the taxi market, they are also setting false expectations about what sort of model is viable in the space since _Eventually_ they will need to bring in revenue or could potentially be forced to pay their drivers more which would lead to a big hike in prices and would probably have an impact on how it functions now.
Spooky23 5y ago
Easy. Buildings have problems. It's in your interest to have some clueless salesman talk to buyers and represent whatever they represent than to do it yourself.
tejohnso 5y ago
You can list and sell on mls yourself through a low cost "mere posting" agent agreement. A few hundred bucks. Why sellers want to pay tens of thousands in commission in a bidding war environment is a mystery to me.

ethbr0 5y ago

In the case of real estate, the entrenched transaction businesses control both supply and demand, and hence are more able to block new entrants. In the case of Uber, supply (people who own vehicles) was effectively unlimited and independent.

boplicity 5y ago
Uber is an interesting comparison, because their primary competitive strategy was to ignore existing government regulations. Regulations, of course, are a huge issue in the real estate industry. Maybe someone can step in and invest a many billions of dollars in real estate -- while ignoring the red-tape regulations that often prevent building? This seems unlikely, but could certainly be a path towards disruption. The difference, with Uber, of course, is their cost of capital was relatively low. They didn't have to buy vehicles, for example. (Imagine having to tear down a few multi-billion dollar real estate developments. Yikes.)
- Spooky23 5y ago
  Uber was just an obvious con that demonstrated the danger of unrestrained capital and an era of ineffective government. Real Estate isn't a regulatory trap; it's an information trap. You can buy and sell property direct. All of the legal stuff is (nominally) done by attorneys. But the association of realtors controls the listing service and makes discovery easy. Like all salespeople, realtors add "value". When you've been in 2,000 houses, you pick up insights that are useful and learn about neighborhoods. The information is used for both good and bad purposes. Most of the disruptors do stupid shit with stupid investor money or integrate with the existing players and add some value.
  - ethbr0 5y ago
    > or integrate with the existing players and add some value Since 1973. https://en.m.wikipedia.org/wiki/RE/MAX https://en.m.wikipedia.org/wiki/RE/MAX
  - boplicity 5y ago
    > Real Estate isn't a regulatory trap; it's an information trap. No -- you're confusing real estate sales with real estate. Real estate is one of the most highly regulated industries out there. You literally can't make any significant changes to most properties without a significant permitting process that goes through many layers of regulations. Not to mention the many real estate developments that are never even a possibility because of regulation. I'm not against regulation -- it can be a very good thing -- but it is clearly at the core of the real estate problem. Society has decided, via regulations, to starve the supply of housing.
InitialBP 5y ago
I would add that Uber has traditionally operated at a loss, and on top of that they don't provide the same level of benefits and payment to their "contractors".(whether or not they should is a different question) While they did disrupt the taxi market, they are also setting false expectations about what sort of model is viable in the space since _Eventually_ they will need to bring in revenue or could potentially be forced to pay their drivers more which would lead to a big hike in prices and would probably have an impact on how it functions now.

Spooky23 5y ago

Easy. Buildings have problems. It's in your interest to have some clueless salesman talk to buyers and represent whatever they represent than to do it yourself.

tejohnso 5y ago

You can list and sell on mls yourself through a low cost "mere posting" agent agreement. A few hundred bucks. Why sellers want to pay tens of thousands in commission in a bidding war environment is a mystery to me.