How many years until realtors are replaced by Redfin/Uber/Zillow/etc?

[Anonymous]

Steve wrote:The DANGER report seems to indicate 3-5 years, but 14:36's guess of within 7.5 years seems more realistic. (https://www.dangerreport.com/)

When you combine the generations of a single method for an infrequent transaction with the large body of licensed salespersons out there, you can see why it's such an uphill battle.

I think we are the key to solving the current inefficiencies by turning the industry on its head since we let homeowners search for buyers, especially pre-market.

RedFin is just a cheaper brokerage.

Zillow can change the entire game tomorrow if they wanted to. Half or more of the buyers and sellers already use them.

You realize you are brokering without a license, right? There are all sorts of implications of risk with what you're doing. Someone will sue you eventually.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Redfin? Probably never. It's been how long, they have under 1% of the market, are not profitable, and will go the way of pets.com shortly.

Doesn't mean that this market won't change drastically - maybe google has something in store. Or amazon. But housing is not a commodity market.

I'll answer a different way - real estate sales will change 10 years after car sales change, and I have no confidence that will be while I or my kids are alive.

Uh, the last two cars I bought, I negotiated with 10-15 dealers via email and it was a bidding war to get the lowest price so they'd win my business. Plus, with the internet, I could research exactly what a rational price would be.

WAY different from when I purchased cars in the past. Have you not bought a car lately? Because it really sounds like you don't know what you're talking about.

The process you describe is still terribly inefficient, you realize that, right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Redfin hasn't had nearly the success disrupting the real estate industry as Uber has had on the taxi industry. I mean, 10 years in it can't even get more than 3% market share in its home market of Seattle.

Besides, Redfin appears to be little more than a pyramid scheme to go public and enrich early investors. I don't see a sustainable business model. Mainly because they keep changing the model like every two weeks.

So the short answer is I don't think we'll see disintermediation of the real estate industry anytime soon.

Thanks, realtor. Change is inevitable.

Not a Realtor. Just someone in business who studies this sort of thing. But it's such a clever retort, calling people who disagree with you Realtors.

Look, digital has had disruptive effects on many industries...

1) Car buying. Auto dealers as we know it are nearly gone.
2) Taxi services. Uber.
3) Banking and capital markets have been transformed.
4) Insurance, etc.

But, no, not real estate. Redfin will launch its IPO and then slowly drift down in value as it misses earnings target after earnings target.

Not buying the car thing at all. The same dealerships exist that existed decades ago. Moving the haggling to email instead of in person isn't much of an improvement.

[Anonymous]

Anonymous wrote:I think Zillow could change the market quickly by offering an auction service, sort of like ebay for houses. They have the eyeballs, and an auction format will ensure the most accurate price for each house. The only piece they're missing is some mechanism to show the houses to live people. Maybe the answer is for Zillow to partner with Redfin. Redfin will get a piece of lots more listings, and they can be responsible for running the open houses and staging and such. Maybe Redfin gets paid on an hourly basis for the service of open house, and staging, and advice on how to present house for sale, while Zillow gets a small commission on the sale for providing the platform.

Do you understand how regulated real estate is? They can't just start auctions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Redfin hasn't had nearly the success disrupting the real estate industry as Uber has had on the taxi industry. I mean, 10 years in it can't even get more than 3% market share in its home market of Seattle.

Besides, Redfin appears to be little more than a pyramid scheme to go public and enrich early investors. I don't see a sustainable business model. Mainly because they keep changing the model like every two weeks.

So the short answer is I don't think we'll see disintermediation of the real estate industry anytime soon.

Thanks, realtor. Change is inevitable.

Not a Realtor. Just someone in business who studies this sort of thing. But it's such a clever retort, calling people who disagree with you Realtors.

Look, digital has had disruptive effects on many industries...

1) Car buying. Auto dealers as we know it are nearly gone.
2) Taxi services. Uber.
3) Banking and capital markets have been transformed.
4) Insurance, etc.

But, no, not real estate. Redfin will launch its IPO and then slowly drift down in value as it misses earnings target after earnings target.

Not buying the car thing at all. The same dealerships exist that existed decades ago. Moving the haggling to email instead of in person isn't much of an improvement.

No, digitization has definitely shrunk the role dealerships play in the point of sale of a car, primarily by shifting asymmetry of information. Buyers now hold all the cards.

The chief reason this won't happen for real estate is the fact that it's a regulated industry. Cars are durable goods but still liquid assets. And anyone can sell them -- you don't need a license. There's also more supply of cars -- if you can't reach a price on a particular Prius, there's another one to buy.

You can definitely inject more transparency into the home buying process, but property is a more heavily regulated and illiquid commidity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There seems to be a lot of anger out there towards realtors and many people seem to believe the 6 percent is ridiculous and undeserved. It's only a matter of time before a better "product" is offered. I doubt many would have predicted uber or dollar shave club. These companies are successful because a vast majority of the population was frustrated with taxi service and sick and tired of paying too much for razors. I personally would jump all over an opportunity to avoid paying 6 percent. My parents have sold multiple properties without a realtor but have always had the benefit of time.

Bottom line is the Internet has been a game changer. Real estate agents were a necessity in order for access to knowledge. Now anyone can research comps and find a home. One of my relatives is an older and very successful realtor and said it is only a matter of time. My relative also was making close to 500k a year selling real estate, which I find ridiculous.

I've found each home I've purchased on my own and simply don't believe the agent worked hard enough or brought something special to the table to earn tens of thousands of dollars from each sale. No way.

I think you're confusing the two or three people who post here incessantly with "a lot of anger out there."

There's not.

New poster here. Yes there is. People have similar feelings towards realtors that they have towards lawyers (or worse).

Agreed. I've heard quite a few snide comments from friends when discussing real estate agents. Others have mentioned the commission bs. There are probably a few posters on here who love to hammer agents but there are many people in real life who aren't that pleased. You have to be a moron to not question the amount of money they are earning from selling your house. I don't mean In terms of a percentage but in a dollar amount. It's essentially the cost of a luxury car.

[Steve]

Anonymous wrote:

This looks interesting. Does the website charge sellers to search?

Thanks! It's all free right now.

Anonymous wrote:

You realize you are brokering without a license, right? There are all sorts of implications of risk with what you're doing. Someone will sue you eventually.

We do not broker real estate. Multiple lawyers, our real estate broker, and DPOR investigations have confirmed our operations are legal - thanks for your concern!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think Zillow could change the market quickly by offering an auction service, sort of like ebay for houses. They have the eyeballs, and an auction format will ensure the most accurate price for each house. The only piece they're missing is some mechanism to show the houses to live people. Maybe the answer is for Zillow to partner with Redfin. Redfin will get a piece of lots more listings, and they can be responsible for running the open houses and staging and such. Maybe Redfin gets paid on an hourly basis for the service of open house, and staging, and advice on how to present house for sale, while Zillow gets a small commission on the sale for providing the platform.

Do you understand how regulated real estate is? They can't just start auctions.

Yes, I understand real estate agents are regulated. But there is no regulation that prevents me from selling my house without a realtor, and no regulation that prevents me from using an auction site to do it.

You are not thinking like an entrepreneur. The regulations are just fences put up by realtors to protect their turf.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Redfin hasn't had nearly the success disrupting the real estate industry as Uber has had on the taxi industry. I mean, 10 years in it can't even get more than 3% market share in its home market of Seattle.

Besides, Redfin appears to be little more than a pyramid scheme to go public and enrich early investors. I don't see a sustainable business model. Mainly because they keep changing the model like every two weeks.

So the short answer is I don't think we'll see disintermediation of the real estate industry anytime soon.

Thanks, realtor. Change is inevitable.

Not a Realtor. Just someone in business who studies this sort of thing. But it's such a clever retort, calling people who disagree with you Realtors.

Look, digital has had disruptive effects on many industries...

1) Car buying. Auto dealers as we know it are nearly gone.
2) Taxi services. Uber.
3) Banking and capital markets have been transformed.
4) Insurance, etc.

But, no, not real estate. Redfin will launch its IPO and then slowly drift down in value as it misses earnings target after earnings target.

Not buying the car thing at all. The same dealerships exist that existed decades ago. Moving the haggling to email instead of in person isn't much of an improvement.

No, digitization has definitely shrunk the role dealerships play in the point of sale of a car, primarily by shifting asymmetry of information. Buyers now hold all the cards.

The chief reason this won't happen for real estate is the fact that it's a regulated industry. Cars are durable goods but still liquid assets. And anyone can sell them -- you don't need a license. There's also more supply of cars -- if you can't reach a price on a particular Prius, there's another one to buy.

You can definitely inject more transparency into the home buying process, but property is a more heavily regulated and illiquid commidity.

Totally disagree, most folks still walk in off the street and haggle. even with Internet sales, the dealerships don't give up much on popular cars. There simply aren't enough dealerships of the same manufacturer in the same geographical area to give buyers the upper hand.

[Anonymous]

Lol. Realtors will be going crazy like the taxi cabbies in 10 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think Zillow could change the market quickly by offering an auction service, sort of like ebay for houses. They have the eyeballs, and an auction format will ensure the most accurate price for each house. The only piece they're missing is some mechanism to show the houses to live people. Maybe the answer is for Zillow to partner with Redfin. Redfin will get a piece of lots more listings, and they can be responsible for running the open houses and staging and such. Maybe Redfin gets paid on an hourly basis for the service of open house, and staging, and advice on how to present house for sale, while Zillow gets a small commission on the sale for providing the platform.

Do you understand how regulated real estate is? They can't just start auctions.

Yes, I understand real estate agents are regulated. But there is no regulation that prevents me from selling my house without a realtor, and no regulation that prevents me from using an auction site to do it.

You are not thinking like an entrepreneur. The regulations are just fences put up by realtors to protect their turf.

Try to buy real estate in Europe, especially Eastern Europe, an you'll be grateful for all of our regulations. Even in Western Europe, title can be pretty fuzzy. In Eastern Europe, crooks just sell other people's real estate out from under them. The hapless buyer finds out after they have handed over the money that they have a worthless deed. Add to that danger from floods, earthquakes etc., and you have a recipe for disaster when it comes to asymmetric information.

Uber and Airbnb are the same way. They "save you money" (although Uber is hardly cheaper with surge pricing), but really they are there to dodge taxes and safety regulations. Uber's drivers are not background checked, and you can end up paying hundreds of dollars for a $20 cab ride. Airbnb is just amateurs running hotels without paying taxes.

[Anonymous]

Not gonna happen - and no, I am not a realtor.

I say "not gonna happen" because there are too many people who do not have the time, desire, or inclination to manage the whole transaction on their own.

[Anonymous]

Anonymous wrote:Not gonna happen - and no, I am not a realtor.

I say "not gonna happen" because there are too many people who do not have the time, desire, or inclination to manage the whole transaction on their own.

I don't know - have you sold a home recently? I have done a FSBO and getting the mortgage together (for out new home) was far and away the hardest part of the transaction. If someone will take a lower fee to hold an occassional open house and take photos and post them on MLS, I think many, many people would prefer that. Feedback on the home is automated through the showings website and it was awesome to be able to talk to the buyer directly.

Title company and mortgage company arrange a majority of the other items. Only thing I, as a homeowner, handled was getting the inspection set up. And any smart homewoners knows that you choose your own inspector.

[Anonymous]

Well, real estate is an inefficient market because each property is unique and each buyer and seller is unique. Even within a developer subdivision, the lots are going to vary somewhat as well as upgrades, etc. And timing affects purchases too, so a home that is available in December is going to have a different buyer pool than the next-door property in April. So its harder to comp things out perfectly like with a car. Add in the almost universal requirement to finance the purchase and its difficult for buyers to become sophisticated. I agree that realtors should be paid more like other professionals. Hard to believe but agents in the Midwest work just as hard as the ones here but make far less, and cost of living isn't fully the reason.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think Zillow could change the market quickly by offering an auction service, sort of like ebay for houses. They have the eyeballs, and an auction format will ensure the most accurate price for each house. The only piece they're missing is some mechanism to show the houses to live people. Maybe the answer is for Zillow to partner with Redfin. Redfin will get a piece of lots more listings, and they can be responsible for running the open houses and staging and such. Maybe Redfin gets paid on an hourly basis for the service of open house, and staging, and advice on how to present house for sale, while Zillow gets a small commission on the sale for providing the platform.

Do you understand how regulated real estate is? They can't just start auctions.

Yes, I understand real estate agents are regulated. But there is no regulation that prevents me from selling my house without a realtor, and no regulation that prevents me from using an auction site to do it.

You are not thinking like an entrepreneur. The regulations are just fences put up by realtors to protect their turf.

No.

The regulations are put up to prevent buyers and sellers, not Realtors.

Look, there's no regulation that requires you to take your car to Jiffy Lube for an oil change -- you could change your oil yourself for a LOT less money. But unless you're the extreme exception, you don't. Because you lack the knowledge/skill to do it (not that you couldn't learn) and have other things to do instead. And THESE are the main reasons people hire agents.