How many years until realtors are replaced by Redfin/Uber/Zillow/etc?
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Anonymous
| Seems that disintermediation of home sales is inevitable. The taxi industry is on the rocks, and almost every other type of sale has been disinter mediated by technology (stock sales, personal property, many car sales, etc.). So what does the future hold for real estate? |
Anonymous
| Probably 5 years or less. The Redfin business model requires agents to work for a salary and earn small commissions. The traditional companies have focused on having the largest number of agents rather than having agents who work. People are no longer willing to pay the transactional costs and wil use more streamlined, less expensive means of buying and selling properties. |
Anonymous
| 7.5 |
Anonymous
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For a buyer redfin only rebates 15% of their 3% fee. Nice plus but not make or break, kind of an underwhelming rebate imo. really depends on whether you think a traditional buyer agent would be $5,000 or so better. Maybe they would give you good advice on houses to avoid, pricing, etc... Maybe not. |
Anonymous
| Hopefully by the time I go to sell. I would prefer to pay $50 an hour for the items I need (hosting open houses and contract negotiations). I could have done better photos and a brochure. |
Anonymous
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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. |
Steve
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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. |
Anonymous
Can you explain this? I don't see how they are similar but I don't have much experience with car sales and could definitely be missing something. The real problem with traditional realtors is that their compensation structure actually puts their interests adverse to the person who has hired them. In theory, the realtor's role is - or at least should be - more akin to a lawyer or business consultant than a sales person to the person they represent, so making them an interested party in the transaction instead of paying a la carte for whatever services are rendered doesn't make much sense. How is that the same as car sales? |
Anonymous
You mean like Zillow's "make me move" pre-market listings? |
Anonymous
Lol. Yup it's basically "let me hire you to convince me to buy a house whether it is a good deal or not!" |
Steve
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No, I think that's a different market segment of people who want unrealistic prices for their home. Our audience is more like people who know they need to move in a few months or years (jobs, retirement, etc) and would like to find the right buyer and cut down on unnecessary showings and even the prep and staging work that happens months before listing. We also wanted to make our homeowners feel safer so we hid their homes from searches and don't even show addresses. Owners get alerts when buyers pop up in their area. Sellers can then review the buyer profiles to see if there's a good match (timeline, financing, wants/needs/dislikes/personal background) before reaching out to discuss/set up showings. It's been satisfying to hear that pre-market showings are actually occurring on our site. We want to make real estate more open, friendly, and sensible. That doesn't mean agents need to be eliminated. It means that people need to be empowered. |
Anonymous
| Which site is yours? |
Anonymous
+1 it seems like the pp is writing from zillow's perspective? |
Anonymous
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. |
Anonymous
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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. |