36 ms·
Redfin Is Leaving the National Association of Realtors
- aabajian 3y agoIf Redfin can create a competitor to the monopolistic MLS (owned by Realtor.com), more power to them.
- deleted 3y ago[deleted]
- ejstronge 3y agoI don't think 'MLS' is a single entity - instead different areas have their own MLS, and these are interconnected based on contracts. Thus, there isn't a monopoly to disrupt in the first place.
- cyral 3y agoCorrect, and some of the MLSs won't even sell you data (for all those trying to disrupt real-estate). They have exclusive agreements to only appear on Zillow or Realtor.com or something like that when I looked into it before.
- asynchronous 3y agoActually Zillow I think just scrapes sites, I don’t think they even have legal/API access. I hope someone puts a bullet in the Realtor industry.
- joshuaheard 3y agoThey pay a fee for MLS access.
- aabajian 3y ago"Most MLSs are owned by the REALTOR® association that formed them." See: https://www.reso.org/blog/mls-faq/ https://www.reso.org/blog/mls-faq/ Read the Redfin post. The rules the REALTOR association imposes to get access to MLS data is monopolistic.
- ejstronge 3y agoI did read the post. There is no monopoly because there is no single 'MLS'
- YokoZar 3y agoIt's perfectly possible for there to be many of them and for them to also be monopolies over their respective regional markets. Compare with cable companies carving up territory and agreeing not to intrude on eachother's turf.
- rcstank 3y agoThere’s another word for that: cartel
- codecutter 3y agoCartel is the correct word. As an individual consumer, I wanted access to MLS data and was willing to pay a monthly access fee. But they wouldn't provide such access and want you to use the cartel member, real estate agent.
- el_benhameen 3y agoI hadn’t heard about the sexual assault allegations until now. That must explain the barrage of over-the-top realtor ads I’ve been hearing on the radio.
- Xcelerate 3y agoProps to Redfin. If there’s one area I’d love to see Silicon Valley actually disrupt, it’s real estate. There’s too many middlemen in this process— personally I don’t even think houses should be investments. I’ve never bought the argument by hedge funds that “we add valuable liquidity to the market (*for only a few billion dollars in fees!)”, but perhaps that argument might hold water for real estate.
- steve_adams_86 3y agoI recently bought a house that has increased in value by around 10% since I bought it. I’d be happy about it, but all I can think about what a struggle it was to find, bid on, and buy a home at the prices the market demanded at the time. Now it’s worse, and I profit from it for doing effectively nothing (assuming I sell when it is still valued higher). That’s not good. Not like this, at least. Maybe this was more appealing to people in the past because it wasn’t so overtly bad for communities and society.
- willcipriano 3y ago[flagged]
- sli 3y agoShortsightedness like this tends to backfire spectacularly in the long-term.
- goalonetwo 3y agoIt is amazing how once someone becomes a homeowner, they become cheerleaders for unsustainable home prices (and vice versa). And I understand where it comes from. The mistake was to make housing an investment.
- jacurtis 3y agoPeople tend to be really shortsighted when it comes to home prices. People get excited with the thought of selling their home and "extracting profit". But how do you extract profit? You still need another home, right? Unless you plan on downsizing then you are going to buy similar or larger to what you just sold. If your house value went up 30%, then likely the rest of your area did too. So if you want to buy something new, then all your profits go back to something that is the same as you already have. In the end you just end up in a similar home, but now with a worse interest rate. So where's that value extraction that everyone gets so excited about. Thats why home sales aren't happening right now. People fantisize about their home value but when they go to sell they realize they will probably end up worse off than when they started. For example. Let's say you bought a home for $300k and now it is worth $400k. Let's say they owe $250k on it. Nice 30% value, huh? Great, sell it. Now you have a cool $150k burning a hole in your pocket. But then you remember, oh i don't have anywhere to sleep tonight. So you go and buy a home that is similar to what you just sold. Well all those houses now cost $400k, thats why you were able to sell yours for that price in the first place. So now you use the $150k of money that you "extracted" as a downpayment on another $400k home and guess what, you're back to a $250k loan, which is exactly where you started. You didn't gain anything. Just now you are paying 6.5% interest on it instead of 3.5% interest. Which means your monthly mortgage actually increased by ~$650 a month for the same house. Great deal, huh?
- happytiger 3y agoWow. Gloves are off. If they pull this off they will crack open innovation and some long overdue lower cost options into the real estate markets.
- caseysoftware 3y ago> In about half the U.S., including in cities like Charlotte, Dallas, Houston, Las Vegas, Long Island, Minneapolis, Nashville, Phoenix and Salt Lake City, we can’t quit NAR individually or en masse, because NAR membership is required for agents to access listing databases, lockboxes, and industry-standard contracts. This sounds like they're making a case for cartel behavior. With the general unaffordability of housing, realtors are a good target right now. Not that they have anything to do with interest rates or have more than minimal impact on asking price, most people aren't going to think that far. That said, if Redfin can open up access better (and still securely!), this could work out in the long term too.
- imglorp 3y agoI once sold my house without a realtor. I hired an excellent RE attorney to handle only the paperwork for a flat rate -- way less than a realtor who wanted a whole percent to do the same job. Some parts of the system grudgingly took my money without an agent, like title search and home insurance and the buyer's agent who still got their 3 percent. Best case, if you can get it, would be the buyer and seller meet up without the agents and each has an attorney to help with legal.
- gumby 3y agoThat's great! Unfortunately, often real estate agents will refuse to show FSOB houses (at least unless the buyer asks explicitly) so that they take longer to sell, thereby showing the "value" of the seller's agents. Perhaps Redfin should drop a line to Lina Kahn at the FTC.
- hash872 3y agoWhy would agents show a FSBO home for free? They're independent contractors on 100% commission, paying for their own health insurance and retirement- why would they work for free? Do you work for your employer for free? Buyers are free to find & view FSBO homes on their own, they can easily be found on Zillow and any other listing site. MLS even accepts FSBO listings for a flat $300 or so fee, no agent required
- ajhurliman 3y ago“Redfin will go further than resigning from the NAR board, requiring our brokers and agents to leave NAR everywhere we can” Wow, they’re really pulling out the big guns. I applaud their efforts to decouple MLS access from NAR, that seems to be the biggest hurdle in advancing the industry.
- goalonetwo 3y agoYES! It is about time that realtors get disrupted. They take 6% out of most housing transactions and add very little value. They managed to put themselves in the critical path by lobbying and regulatory capture. You don't get access to the listings and MLS open houses unless you go with a realtor. They also made the process artificially complex. Most other countries seem to rely on direct customer to customer for most transactions, with a notary making sure the contracts are binding. Why can we not do that in the US?
- lbotos 3y agoEh, I think a lot of realtors are not worth it, but a good one is. As a buyer I got an excellent rate from their recommended lender, I got a solid lawyer rec, and I got experienced guidance throughout the whole process. Was it expensive? Yes, but was it worth it? In my case, very much so.
- ramraj07 3y agoAll good but 6% is outrageous. 1% each is going rate in many other countries and I don’t see what value even a stellar realtor offers that’s worth more given current housing prices.
- newZWhoDis 3y ago>As a buyer I got an excellent rate from their recommended lender No you didn’t, they suckered you on a good rate and screwed you with stealth fees on closing costs. With a few hours of hunting I saved $50k, beating their rate and cash to close. “Preferred lenders” are almost always a scam, but as always DYOR
- ziddoap 3y agoI'm surprised at how confident you are saying that based on a 5 sentence post from someone you don't know anything about.
- phanimahesh 3y ago
- outside1234 3y agoNow HERE is the anti-trust trial we need. How is it that some slimy org controls the only access to price information nationally?
- BXlnt2EachOther 3y agoI'm sure there are other reasons, or I might be misinterpreting this statistic, but NAR is listed as the #1 lobbying spender in the US in 2022. They and #2 (US Chamber of Commerce) each spent over 3x the third-place organization, and they spent more than 4x the top tech company (Facebook). https://www.statista.com/statistics/257344/top-lobbying-spenders-in-the-us/ https://www.statista.com/statistics/257344/top-lobbying-spen...
- elteto 3y agoNow, the next logical move for Redfin is to sue for access to MLS. This may be in fact building up ammunition for the case. They probably expect the NAR to susped MLS access. No way NAR will give away access to its crown jewel and Redfin is more-or-less dead in the water without it.
- etchalon 3y agoThere were few things more frustrating to me when we were buying our house, which we were currently living in, from our landlords, for a price we all agreed to over the phone, that we HAD to employ two realtors who, despite doing little more than paperwork which I could have done myself, took 6% of the sale price. It's a grift.
- eddythompson80 3y ago> that we HAD to employ two realtors who [..] Why did you have to do that? is it your state/city law? because I know that's not a general requirement. You can always sell/buy directly.
- etchalon 3y agoWe had to because the sellers insisted on using an agent themselves, because their realtor convinced them they had to, and then that agent then insisted that we use a realtor too. And that's before I bring up how everyone, from the titling company, to the attorney, to the inspector, also insisted we "needed" a realtor, with multiple potential vendors refusing to talk to me without one. It felt, at the time, like a racket, with everyone in on the grift.
- eddythompson80 3y agoI see. Honestly it feels more like your seller’s choice to go with a realtor. Then it’s the typical realtor preference to deal with another realtor. It’s like how a judge would hate to deal with a self representing defendant. It’s just a lot more hassle for them and they don’t wanna hold anyone’s hand throughout the process. Unless there are cities or counties with weird laws I’m not familiar with, you can always direct sell/buy. Due to where my place is, I get almost a monthly or bimonthly letter from a couple of well known developers in the area that usually highlight “no banks, no realtors” an they are looking to pay cash and handle all paper work themselves. It seems that the grift in your case was every body’s else’s convenience but yours, and that convenience costed 6%
- QuadrupleA 3y agoSlight grandstanding aside, this is great. NAR and the buying / selling agent system in the US is egregiously overpriced and monopolistic. Borderline corrupt. It's 2023, technology could have brought these costs drastically down for homebuyers and sellers a decade ago.
- xnx 3y agoExactly the fact that commissions are still 6% despite nearly every part of the process (searching, walk throughs, negotiation, closing) becoming online and automated in the past 30 years shows that there are other [cartel] forces at play.
- midnitewarrior 3y agoThe NAR is in desperate need of a disruption. I hope Redfin accomplishes this. The MLS is a monopoly and tying it to NAR membership is wandering into antitrust territory.
- gedy 3y agoWonder if it even matters, as when we bought our house ~12 years ago, we used Redfin as our buying agent, and, even though we had a real realtor working for us through them, the selling agents were super defensive and refused to deal with her. They would only deal with us directly and we'd have to forward info to her, etc. First home so had no idea how this was supposed to work, but seemed other real estate agents didn't treat Redfin as a "real" realtor in any case.
- jeffbee 3y agoThat’s cartel behavior.
- nocoiner 3y agoI actually don’t hate realtors. In my jurisdiction, seller pays, so it kind of only feels like 3% to me. I have no idea if that’s economically valid, but when I’ve sold a house, I felt like I got my money’s worth on market knowledge and advice. Maybe I just had the fortune to be working with good people. Possibly I’m a cynic but I suspect Redfin’s endgame here is not to reduce transaction costs but to capture those for themselves instead. Perhaps part of my cynicism is looking at transaction expenses in jurisdictions without realtors - usually there’s some middleman who tends to capture a single-digit percentage of transaction value (either a notary or the government or both or others). Funny how that pattern seems to repeat itself.
- xnx 3y agoRegardless of how it is described or presented, the buyer pays for everything related to a real estate transaction: fees, commissions, inspections, etc. Even when the seller pays, that expenses is ultimately built into the sale price of the property.
- wbl 3y agoNot exactly. It depends on the relative elasticities. You're correct that the cash flow isn't everything.
- nojvek 3y agoYou’re right in that the buyer pays the seller so the seller pays the agents so ultimately the buyer is paying for everything and hoping he will find another buyer down the lane willing to pay more than 6% of the price he paid to at-least not lose what he put in. Houses have a huge transaction cost, unlike say trading cost. Yeah the value goes up and down due to supply and demand but the transaction fees are zero at many internet exchanges now.
- yafbum 3y agoThe question isn't really whether you got some useful service in exchange for your 3%. Monopolies and cartels don't always rob you blind. The question is whether you had a choice and meaningful competition on price.
- bentt 3y agoThis is fantastic news. Realtors have had their hands in the cookie jar for too long. Now that information is so much more accessible because of the internet, realtors simply are not needed. Anyone can buy or sell a house. That said, I don't think consolidating the fees in a tech company is necessarily a win for the greater society.
- blindriver 3y agoSome realtors are worth it. We sold and bought our house in 2021. We bought for $1 million and sold for almost $3 million over 8 years. When it came time to selling the house, my realtor was able to extract an extra $100k from the buyers as well as make it an all-cash offer with no contingencies. When we bought our new house later that year, the house we were looking at was on the market for about a month. We were going to give an offer at list price, but she could tell the selling agent was a bit desperate, so she was able to get it $100k below list price, something that is unheard of in the SF Bay Area. Overall she netted us $200k over both transactions, and she was singlehandedly the reason for this. That's what you get when you have a really good agent.
- endisneigh 3y agoThat’s why you get when you have low interest rates
- stets 3y ago"Extract" is the key word here
- Simulacra 3y agoThe realtor we got was fantastic. She took care of everything, and we had through her a great loan company, and everything was just taken care of. Would not dream of buying or selling without an agent. It's just too much hassle, and I don't have the expertise
- xpe 3y ago3% of a $1M house is $60,000. That's bonkers almost any way you slice it: effort, expertise, or value-add. And that's just one side of the usual commission! The process _could_ be streamlined and made less of a hassle, but since so many take a cut, there are perverse incentives. I skew progressive/liberal on many policy issues, but on this one, I'm fiercely in favor of the libertarian argumentation. Realtors have an eff-ing insane monopoly / cartel. Sorry, it makes me crazy. If you go back in time and/or to some markets, 3% of a $100,000 house = $6,000. That makes a bit more sense in terms of hourly compensation.
- water9 3y ago[flagged]
- user3939382 3y agoUsed them once. They use a team leader who has agents meet you. The agent that met me was clueless and knew nothing about the house. The team leader gave me horrible advice and almost 0 communication. Just 1 experience maybe other people have luck but I’d never call them again.
- respectthepeace 3y agoI used them to buy and the "team leader" was amazing. We were ultimately very happy with the experience so it seems results may vary.
- SkyPuncher 3y agoDoesn't sound much different than some of the agents I've worked with.
- astura 3y agoThat's just very typical real estate agent behavior.
- deleted 3y ago[deleted]
- local_crmdgeon 3y agoIve had ~6 brokers for apartments sit in cars outside of the apartment I was looking at, while I walked around inside. Still demanded 10% of the yearly rent though :) I get these aren’t the same brokers, but brokers delenda est
- chasd00 3y agoThe sexual assault allegation is an interesting touch. They’re probably trying to get a viral social media outrage against NAR going but idk if enough X warriors know or care about NAR to make it a thing though. If Redfin can get it to stick then it will certainly cause NAR some pain so we’ll see.
- mmaunder 3y agoI wonder who will blink first.
- brightball 3y agoWhile it would be fun to see this work, NAR knows that the entire value prop for them to exist is the MLS systems. If realtors ever open access to that, their entire profession will collapse overnight. I briefly had my license and the entire industry is like a giant pyramid scheme with fees on top of fees on top of fees. I’m half tempted to reopen my license just to get involved with Redfin because I have no real estate relationships to lose.
- ultrasaurus 3y agoBought our first house with Redfin a few months ago and they did a few things really well: sharing data (you can download their results to CSV and chart hundreds of homes in an area), and they pay people a fee for service -- so there was always someone happy to show me just one more house. Technologically it's a market that's ripe for disruption, but socially as well: there just isn't enough boom left in the market to fund 1.5MM people working in it full time.
- respectthepeace 3y agoIs their plan really to ask NAR to open the listings up? That will never happen...
- xnx 3y agoI would much rather the feds go after the National Association of Realtors, cable companies, and any number of other organizations before Google. People love Google (vocal part of HN excluded). People do not like Realtor fees and cable companies.
- jackcosgrove 3y agoI see Redfin as one or two points on a continuum of service-cost tradeoffs in the real estate market. On one end is a traditional realtor arrangement, with the 5% commission divided between the two agents. On the other end is for sale by owner, with potentially no commissions. Adjacent to that is a flat fee listing service, which costs about 2.5% in buyer's agent commission. If you sell through Redfin, your total commission is reduced to 4% from the industry standard 5%, with 1.5% going to your agent. If you buy through Redfin within twelve months of selling through them, you get an additional 0.5% off the commission for a grand total of 3.5%. Not bad. It can save you $10k or more at jumbo mortgage house prices. Redfin has already done well by doing good and offering a differentiated product in the middle of two other offerings. I have sold two properties, one using a flat fee listing service and one using Redfin. The former was a fair amount of work, while the latter was way less, comparable to a traditional realtor in the level of service offered. I would recommend Redfin to anyone.
- kshacker 3y agoI think the 5% happens but is rarer than 5.5%. Maybe we need to negotiate better but amongst all my friend circle 5.5 seems the norm.
- jackcosgrove 3y agoYou are right, I checked and 5.5% appears to be the national average now. It used to be 6%. 5% happens where prices are higher. Redfin offers a 1.5% listing fee, and lowers that to 1% if you buy and sell. However you'll still be expected to pay the typical local buyer's agent commission.
- ancorevard 3y agoI truly hope this can start the rebuilding of the real estate industry. It is incredibly user hostile.
- yieldcrv 3y agois Redfin big enough for this gamble? do they have processes in place to not just become another NAR?
- rainyguy 3y agoNAR is just the gatekeeper to the MLS. MLS access is the real benefit to being a part of these associations. No one wants to actually pay these fees. And if Redfin could be the one to disrupt and democratize access to these databases, it would be awesome for buyers and sellers. Of course, this probably comes at a cost to realtors who get their margins squeezed even more.
- yalogin 3y agoI like that Redfin is finally being direct and aggressive. This was the promise they entered the market when they did and it took them 10yrs to get here
- woeirua 3y agoThere’s some subtext that I think most commentators are missing. NAR and some of the major brokerages have been under intense anti-trust legal pressure this year. By all measures it seems that these lawsuits are working. REMAX just settled one of these lawsuits to the tune of ~50 million and has promised to change their business practices, potentially including dropping the requirement that REMAX brokerages must be members of the NAR [1]. Let me be clear. Redfin is only breaking ties now because the NAR is fatally wounded. Redfin now thinks they can scoop up a lot of market share in the chaos that is going to happen in the next year. They’re not doing this for altruistic reasons. [1] https://www.housingwire.com/articles/re-max-settles-buyer-broker-commission-lawsuits-for-55-million/ https://www.housingwire.com/articles/re-max-settles-buyer-br...
- ccvannorman 3y agoI see a lot of comments here promoting tech to displace or disrupt realtors. "6% is too much", etc. As a buyer and seller of multiple homes, I've not had success with RedFin and I've had varied success with realtors. That said, a good realtor is absolutely worth 6%. A bad realtor (of which there are plenty) is actually worse than DIY / RedFin. I say this because I want everyone with the position that "Realtors are never 6% value" to consider that they may have simply not worked with a good realtor yet.
- zaps 3y ago“…for two reasons: 1) NAR policies requiring a fee for the buyer’s agent on every listing 2) a pattern of alleged sexual harassment.” That escalated quickly.
- nojvek 3y agoLike Tesla going against dealerships, this is very much needed. In general the best markets are have low transaction fees, efficient, trustworthy, maintain minimum quality bar, and many balanced players on both ends. In this scenario NAR has created an inefficient market. Same with most states having a very hefty permitting processes that takes more than half a year for new construction. Not saying we abolish permits, but Americas solution to housing crisis is making the permitting process faster and transparent. We can’t call ourselves capitalists when the markets are rigged. Gotta let the builders build, the sellers sell and the buyers buy.
- Tempest1981 3y agoDoes leaving NAR reduce Redfin's ability to access/use MLS data? And if so, where, and how significantly?
- thebiglebrewski 3y agoI don't see many comments here about the alleged sexual harassment of NAR leadership. I, for one, am glad Redfin is calling them out for it and resisting investigation into it! Totally unacceptable behavior from NAR.
- poulsbohemian 3y agoFWIW, as a Realtor: The NAR and related state / local associations should go pound sand for a lot of reasons. I am forced to pay them a lot of money each year, for almost no benefit to my business or my clients. The code of ethics is probably their single greatest contribution to the public, but without state and local agencies willing to punish bad agent behavior, it's toothless. Many of the recent lawsuits over commissions and agency where the NAR has been a party have not been to the benefit of the general public, and the NAR has been absolutely weak in its defense of both the public AND realtors. All that said - Redfin can also go pound sand. They exploit information asymmetry where the public doesn't understand real estate services and think Redfin et al are somehow standing up to big bad exploitative realtors. Look man - the new boss is the same as the old boss and Redfin et al are not doing you any good. Find a good agent you trust in your local market, or go your own way if you think you can do better.