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In coastal California the commission situation becomes ludicrously lucrative to the top agents. This week a home in my community sold for $25,0000,000. One of
by Multiplayer 3y ago
In coastal California the commission situation becomes ludicrously lucrative to the top agents. This week a home in my community sold for $25,0000,000. One of my friends had the buy side, another had the sell side. The buy side agent will be involved in ~200,000,000 in transactions this year, a down year. In this community there are plenty of transactions north of $20,000,000. He just did another and had both sides of the deal for $50,000,000.
At this level the commissions are usually 2.5%/2.5%. 5% of 25,000,000 is $1,250,000.
The irony? High end home sales require much less work/effort than low end. Far fewer showings. No open houses, ever.
I used to work at a major real estate company and I know very well how intent they are on holding the listing service monopoly together. Redfin, Zillow, etc were all bets on the opening of the listing services that misunderstood the regulatory capture of the National, State and Local Realtor associations. They ended up selling ads to Realtors rather than opening up a new way for owners to sell their homes directly.
- PaulDavisThe1st 3y agoAFAIK, there is zero regulatory capture associated with realtor associations. They have no special priviledge under the law, and are not required for real estate transactions. The one thing they do have is control over access to the MLS, plus social inertia.
- kjkjadksj 3y agoPeople should not be surprised we have realtors when we have companies like turbotax raking in millions for 3 pages of boilerplate tax return form fills. You could tell people all day how they can do it themselves yet they will still gladly pay for someone or a service to hand hold them because thats what they really want. Not the ability to do something but to feel fussed over and to minimally think.
- ugh123 3y ago>They ended up selling ads to Realtors rather than opening up a new way for owners to sell their homes directly. Doesn't it always go that way with goals like that? How many times have we seen "automated recruiting" platforms pop up, only for them to pivot a year later into selling access and ads directly to recruiters. The market for "middle-men" seems to always be thriving when there's little to do and much to gain.
- iterminate 3y ago> The irony? High end home sales require much less work/effort than low end. Far fewer showings. No open houses, ever. That's true of most work. Software engineering is much less work/effort than a minimum wage job. The higher you go, the easier it is.
- anonfromsomewhe 3y agoSome SE teams solve billion $ worth of problems and create that market cap to only get few % of it. I mean real problems not random saas startup.