4 ms·

Show HN: Software is eating real estate commissions

throwawaynov29 12y ago
Hi, I'm a long time lurker and an infrequent contributor on HN. When I bought my first house, I was shocked to learn that the seller has to pay a 6% commission to agents, its 1-2% in other countries. This sounded outrageously high to me. I believe there is a huge opportunity in connecting sellers to buyers directly and that we don't really need agents. The app I built is an experiment to see if the idea is valid (I and my cofounder are convinced that it is) and if we can build a business around it. I know the kind of resistance I'll encounter, but I firmly believe this can be done. Your comments are appreciated!
- tlb 12y ago
  You're not the first person to have this idea. Be sure to look at the various FSBO marketplaces that have failed to disrupt the industry in the past, and try to understand why they failed so you can at least avoid making the same mistakes.
  - deleted 12y ago
    [deleted]
  - throwawaynov29 12y ago
    Absolutely! We have seen many startups veering towards real estate agent model. Always helps to keep that in mind. No repeat businesses, less viral effects, urge to turn to brokers/agents and become a lead generation engine for them are all difficult issues to surmount. Thanks for the reminder.
msoad 12y ago
If you take care of legal stuff I am really interested in such service. I just don't want to sign the papers myself. I don't understand many of the legal matters with selling a house and afraid of being in trouble if I do it all myself.
- throwawaynov29 12y ago
  You hit the nail on the head. When I bought my house, I found the house, but I was scared of the paperwork and a realtor did that for me. And we plan to change that for both buyers and sellers, by using better, simpler software and real estate attorneys. We will soon be in a position to take care of end-to-end details of the transaction - inspections, tours, contingencies, mortgages, escrows. And, if someone does not want to use these services from us, they can go on their own too. Freedom of choice
faridabadi 12y ago
How's it any different from zillions of fsbo sites our there?
- throwawaynov29 12y ago
  That's a question we asked ourselves several times. Here are some differences # There is not one that gives the seller a list of pre-approved buyers # Most FSBO's are still focused on listing - which in turn leads sellers to the Zillows of the world- back to square one. # We are all about empowering sellers with a curated buyers list and tools/services to handle the transaction.
  - nerd77 12y ago
    That sounds convincing from the seller's perspective. I bought a house a year back through a buyer agent. I don't see any difference as a buyer using this service.
    - throwawaynov29 12y ago
      As a buyer you get an opportunity to connect with sellers before they have publicly list their house and sign on the dotted line to pay 6% commission. So not only you get access to off market listings but there is good chance you are going to get a good deal.
ds2014 12y ago
You might want to reach out to the folks at Reesio. They were doing something very similar a couple years back but now seem to have pivoted

Hi, I'm a long time lurker and an infrequent contributor on HN. When I bought my first house, I was shocked to learn that the seller has to pay a 6% commission to agents, its 1-2% in other countries. This sounded outrageously high to me. I believe there is a huge opportunity in connecting sellers to buyers directly and that we don't really need agents. The app I built is an experiment to see if the idea is valid (I and my cofounder are convinced that it is) and if we can build a business around it. I know the kind of resistance I'll encounter, but I firmly believe this can be done. Your comments are appreciated!

tlb 12y ago
You're not the first person to have this idea. Be sure to look at the various FSBO marketplaces that have failed to disrupt the industry in the past, and try to understand why they failed so you can at least avoid making the same mistakes.
- deleted 12y ago
  [deleted]
- throwawaynov29 12y ago
  Absolutely! We have seen many startups veering towards real estate agent model. Always helps to keep that in mind. No repeat businesses, less viral effects, urge to turn to brokers/agents and become a lead generation engine for them are all difficult issues to surmount. Thanks for the reminder.

msoad 12y ago

If you take care of legal stuff I am really interested in such service. I just don't want to sign the papers myself. I don't understand many of the legal matters with selling a house and afraid of being in trouble if I do it all myself.

throwawaynov29 12y ago
You hit the nail on the head. When I bought my house, I found the house, but I was scared of the paperwork and a realtor did that for me. And we plan to change that for both buyers and sellers, by using better, simpler software and real estate attorneys. We will soon be in a position to take care of end-to-end details of the transaction - inspections, tours, contingencies, mortgages, escrows. And, if someone does not want to use these services from us, they can go on their own too. Freedom of choice

faridabadi 12y ago

How's it any different from zillions of fsbo sites our there?

throwawaynov29 12y ago
That's a question we asked ourselves several times. Here are some differences # There is not one that gives the seller a list of pre-approved buyers # Most FSBO's are still focused on listing - which in turn leads sellers to the Zillows of the world- back to square one. # We are all about empowering sellers with a curated buyers list and tools/services to handle the transaction.
- nerd77 12y ago
  That sounds convincing from the seller's perspective. I bought a house a year back through a buyer agent. I don't see any difference as a buyer using this service.
  - throwawaynov29 12y ago
    As a buyer you get an opportunity to connect with sellers before they have publicly list their house and sign on the dotted line to pay 6% commission. So not only you get access to off market listings but there is good chance you are going to get a good deal.

ds2014 12y ago

You might want to reach out to the folks at Reesio. They were doing something very similar a couple years back but now seem to have pivoted