3 ms·

I was going to try to respond to a bunch of points people made here and on the Techcrunch site about the Redfin story, but unfortunately I didn't have the time

by Shooter 17y ago

I was going to try to respond to a bunch of points people made here and on the Techcrunch site about the Redfin story, but unfortunately I didn't have the time to do individual responses while it was still a relatively active thread. So, instead, I'm going to just make a bitch list here now, in an attempt to start a new discussion. 'Cuz, you know, bitch lists are so productive ;-) Here is what I've started with, in roughly ascending order of pissed-off-edness: 4. I'm pissed at Redfin. Redfin is not that innovative. I think Glenn is a good guy, and a fast learner, but there are better real estate brokerages out there. What do I mean by "better"? I mean companies that save the consumer even MORE money, offer BETTER customer service, don't cut corners or take advantage of OTHER professionals to save money, and have business models that better align their interests with the consumer. I think Redfin is a move in the right direction, but I'm sick of hearing about their "innovation." They're not doing anything other companies haven't already done - they're mainly just doing it more vocally. This all may come across as jealousy or sour grapes from a competitor. It is. I'm jealous because I have a better (and more profitable) venture-funded real estate company - but I can't shout it to the world like Redfin does, because I haven't figured out a way to scale our company while keeping our same quality of service. So I can't advertise or blog about it, and I have to turn customers away because we can't keep up with our current demand. Being the guy with a better widget who can't manufacture enough to meet demand may be a "nice problem to have", but it's extremely frustrating. At this point, I'm trying to avoid going down the "referral partners" path because that largely defeats some of our advantages. So, yeah, I'll have the sour grapes.

Shooter 17y ago
3. I'm pissed at some Flat Fee MLS companies. [This is basically a throwaway, but I bring it up because of the guy posting everywhere at TechCrunch.] Flat fee MLS is a way to save money if you're 100% sure you know what you're doing in selling your own home. For roughly $299-499, you can get your property listed on the local MLS. If you offer a commission to buyer agents, as they require, you will have accomplished almost everything a LAZY agent would have done for you. (If you're greedy, and refuse to pay a cooperating broker fee to buyer agents, you will not be able to list on most MLSs per their rules, and you will have lost roughly 80% of the buyer's market. Why should an MLS association or buyer agent provide their time and resources to help you sell your home for no compensation? Do YOU work for free?) One issue with flat fee MLS companies is that many, but not all, (knowingly) violate their state's 'minimum service guarantee' laws, because it is often difficult for them to do what they're actually supposed to do for that small amount of money. Not all states have these laws, but most do. If you go the Flat Fee MLS listing route, you should just know what you're getting for the money. Some companies are horrible and they blow smoke up your butt without alerting you to the downsides and dangers of this approach. They could improve, for example, by giving you a list of things that you are legally forbidden from saying when you're showing your home, and a list of things you MUST disclose. A second issue with this is that you probably DON'T know what you're doing in selling your own home, even though you think you do. Which goes to issue three...
- Shooter 17y ago
  2. I'm pissed at the arrogance and ignorance of some consumers. You simply don't know what you don't know. You know how some people who know essentially NOTHING about programming will offer to pay you $500 to create, say, a "better" Google, and then are shocked when you say there is more to it than that? In their minds, it's a simple thing. ("Jeez, all you need is to put everything into a database somehow, and then have people be able to search it in a little box, except faster and with better results...?" !!!) That's what it is like for good real estate agents when consumers assert that agents shouldn't get paid for what they do or that it could all be automated with a computer. ("I can find the homes myself on the internet, why am I paying you?") If you think a website can do everything a good agent can do, then you simply don't understand the process. Finding a house to go look at is just a tiny, tiny part of the process. The average consumer is completely ignorant about buying or selling a home, and they allow themselves to be taken advantage of by lazy and crooked agents, and by other consumers. People put less energy into researching the process of buying or selling a home than they would put into buying a new phone or stereo. Stupid agents and stupid consumers go hand in hand down the path together, ruining the industry for everyone else. Real estate is a specialized field, with thousands of things that can go wrong, and hundreds of state-specific and federal laws that govern it. Most agents, even GREAT agents, find it difficult to keep up with all the details and to cover every eventuality, what makes you think you can do it with no training? Most deals are straightforward, though, right? Few transactions have issues and "technicalities" are rare, right? (Well, I know people who have lost tens of thousands of dollars in earnest money because of "technicalities." I know people who have lost the home of their dreams because of "technicalities." I know people who thought they bought 'their' home years ago that actually didn't, because of "technicalities." And, I know a friend who recently saw about $2 million of his home value evaporate because his "private" lake access is no longer private, because of a "technicality." America is the most litigious nation on earth, and homes are the largest purchase people make. A recipe for disaster, yes?) Fortune 500 companies and real estate attorneys often use real estate agents. Do you know something they don't? Too many people think they do, but it can be an expensive and shocking discovery when you realize you don't. Specialization is a good thing. Ideally, you're paying an agent for their time and expertise. So you shouldn't begrudge them the right to make a living doing something you wouldn't do for the same money and/or something you couldn't do properly anyway. Most agents make much less money than people assume. IIRC, the average "guess-timated" earnings for a real estate agent are 2-3X what they ACTUALLY are. Many agents make less than $10K, and the average earnings are usually in the mid-30s to low-40s. (Brokers make more, but they also have more headaches. It's a tough industry.) And agents pay ALL their own taxes and usually all of their insurance costs out of that. When you become an agent, your car insurance may triple or quadruple. You have to get E&O insurance, maybe bonding, etc. There is no consistency in your earnings, so managing your money becomes more critical than in salaried careers. You will LOSE money on some deals. Slow months you may have no income at all. Some customers are unbelievably demanding and will lie through their teeth. Blah, blah, blah. Basically, it isn't like taking money from babies - as some would have you think. Some of the blame for all this arises from the fact that there are way TOO MANY agents chasing the same deals. Especially during the boom times. The industry needs culled. So, are many agents overpaid? YES!!!! Why? Because the incentive structure for the industry absolutely blows chunks, and because there are far too many ignorant and lazy people with real estate licenses. But you can negotiate the price you pay for real estate services. If an agent says there is a "standard" fee in the industry, then they're wrong. That gets into antitrust and price-fixing. They can personally turn you down at a certain price, but there is no "standard" price. You should always know what you're going to pay in advance.
deleted 17y ago
[deleted]

by Shooter 17y ago

Shooter 17y ago

3. I'm pissed at some Flat Fee MLS companies. [This is basically a throwaway, but I bring it up because of the guy posting everywhere at TechCrunch.] Flat fee MLS is a way to save money if you're 100% sure you know what you're doing in selling your own home. For roughly $299-499, you can get your property listed on the local MLS. If you offer a commission to buyer agents, as they require, you will have accomplished almost everything a LAZY agent would have done for you. (If you're greedy, and refuse to pay a cooperating broker fee to buyer agents, you will not be able to list on most MLSs per their rules, and you will have lost roughly 80% of the buyer's market. Why should an MLS association or buyer agent provide their time and resources to help you sell your home for no compensation? Do YOU work for free?) One issue with flat fee MLS companies is that many, but not all, (knowingly) violate their state's 'minimum service guarantee' laws, because it is often difficult for them to do what they're actually supposed to do for that small amount of money. Not all states have these laws, but most do. If you go the Flat Fee MLS listing route, you should just know what you're getting for the money. Some companies are horrible and they blow smoke up your butt without alerting you to the downsides and dangers of this approach. They could improve, for example, by giving you a list of things that you are legally forbidden from saying when you're showing your home, and a list of things you MUST disclose. A second issue with this is that you probably DON'T know what you're doing in selling your own home, even though you think you do. Which goes to issue three...

Shooter 17y ago
2. I'm pissed at the arrogance and ignorance of some consumers. You simply don't know what you don't know. You know how some people who know essentially NOTHING about programming will offer to pay you $500 to create, say, a "better" Google, and then are shocked when you say there is more to it than that? In their minds, it's a simple thing. ("Jeez, all you need is to put everything into a database somehow, and then have people be able to search it in a little box, except faster and with better results...?" !!!) That's what it is like for good real estate agents when consumers assert that agents shouldn't get paid for what they do or that it could all be automated with a computer. ("I can find the homes myself on the internet, why am I paying you?") If you think a website can do everything a good agent can do, then you simply don't understand the process. Finding a house to go look at is just a tiny, tiny part of the process. The average consumer is completely ignorant about buying or selling a home, and they allow themselves to be taken advantage of by lazy and crooked agents, and by other consumers. People put less energy into researching the process of buying or selling a home than they would put into buying a new phone or stereo. Stupid agents and stupid consumers go hand in hand down the path together, ruining the industry for everyone else. Real estate is a specialized field, with thousands of things that can go wrong, and hundreds of state-specific and federal laws that govern it. Most agents, even GREAT agents, find it difficult to keep up with all the details and to cover every eventuality, what makes you think you can do it with no training? Most deals are straightforward, though, right? Few transactions have issues and "technicalities" are rare, right? (Well, I know people who have lost tens of thousands of dollars in earnest money because of "technicalities." I know people who have lost the home of their dreams because of "technicalities." I know people who thought they bought 'their' home years ago that actually didn't, because of "technicalities." And, I know a friend who recently saw about $2 million of his home value evaporate because his "private" lake access is no longer private, because of a "technicality." America is the most litigious nation on earth, and homes are the largest purchase people make. A recipe for disaster, yes?) Fortune 500 companies and real estate attorneys often use real estate agents. Do you know something they don't? Too many people think they do, but it can be an expensive and shocking discovery when you realize you don't. Specialization is a good thing. Ideally, you're paying an agent for their time and expertise. So you shouldn't begrudge them the right to make a living doing something you wouldn't do for the same money and/or something you couldn't do properly anyway. Most agents make much less money than people assume. IIRC, the average "guess-timated" earnings for a real estate agent are 2-3X what they ACTUALLY are. Many agents make less than $10K, and the average earnings are usually in the mid-30s to low-40s. (Brokers make more, but they also have more headaches. It's a tough industry.) And agents pay ALL their own taxes and usually all of their insurance costs out of that. When you become an agent, your car insurance may triple or quadruple. You have to get E&O insurance, maybe bonding, etc. There is no consistency in your earnings, so managing your money becomes more critical than in salaried careers. You will LOSE money on some deals. Slow months you may have no income at all. Some customers are unbelievably demanding and will lie through their teeth. Blah, blah, blah. Basically, it isn't like taking money from babies - as some would have you think. Some of the blame for all this arises from the fact that there are way TOO MANY agents chasing the same deals. Especially during the boom times. The industry needs culled. So, are many agents overpaid? YES!!!! Why? Because the incentive structure for the industry absolutely blows chunks, and because there are far too many ignorant and lazy people with real estate licenses. But you can negotiate the price you pay for real estate services. If an agent says there is a "standard" fee in the industry, then they're wrong. That gets into antitrust and price-fixing. They can personally turn you down at a certain price, but there is no "standard" price. You should always know what you're going to pay in advance.

deleted 17y ago

[deleted]