Having gone through four home-buying episodes, where my wife (an ex-realtor) spent massive amounts of time trolling Trulia, RedFin, calling police departments, gathering reports from the local City Hall, I can tell you there is still a service to be provided by agents. And anyone who has bought a house knows that the collection of contracts that represents "buying a house" is not a small collection, and errors can be logistical disasters down the road.
A good agent is worth 10x their commission. A bad agent, of which there are many, is a waste of money. And the big rub is that people who could be buying homes probably aren't simply because they don't know the dozens of tricks that can be employed to make an unaffordable situation affordable, or able to identify a good deal.
If you're comfortable buying a home without any background check, then I guess you don't need a realtor, but I wouldn't do it.
Oh, and the laws that protect realtors, toss 'em. What we really need is Yelp for realtors.
I'm currently working on solving this problem, hoping to launch in the next year. The truth is the average real estate agent doesn't have a college degree and has been in the business for less than 3 years. And in a hot market, when houses sell in a week, the agent is worth even less. What marketing plan is going to sell a house in a week? None at market value.Furthermore, buyers are walking into transactions thinking they aren't paying for a realtor when they are paying for both sides in the price of the house.
> What marketing plan is going to sell a house in a week? None at market value.
Do not agree. Markets are only collections of people, and brokers know people, some of whom are buyers and a few of whom are the perfect buyers. Reaching those people is the marketing plan. Also, this is not buying airplane tickets, this is the single most costly and complicated process buyers and sellers will likely go through in their whole lives, so time frames of a week are fantasy.
Depends entirely on your market. A former co-worker sold his father's house for tens (possibly hundreds, I don't want to oversell this, but I can't recall for sure) of thousands of dollars over list in Denver in less than 3 days. If you count closing, it's definitely more than a week, but a contract was signed very quickly.
I hear you -- I'd only say the marketing, showing, offer and acceptance took three days but selling of the house, by any meaningful/legal definition, took much longer.
"This is the single most costly and complicated process people will go through. .." so why hire someone for 5-7% of the purchase price, who doesn't have a college degree and has been in the industry for 3 years or less. Furthermore, notice the incentives if you're a buyer literally everyone in the transaction from real estate agent to mortgage broker wants the price to be as high as possible. The incentives all point toward increasing the house price. We're going to fix this. And hopefully help many in the process. I say all of this as a real estate broker and lawyer to boot.
>so why hire someone for 5-7% of the purchase price
What's a few hundred basis points of exaggeration when trying to make a point, right?
>who doesn't have a college degree
Anecdote time: I know well five brokers, all who have degrees, one with an advanced degree.
>and has been in the industry for 3 years or less.
Now here, you have described Redfin agents almost perfectly. Huge turnover, low compensation, bad broker work and no long term interest in a career that facilitates a race to the bottom.
> Furthermore, notice the incentives if you're a buyer literally everyone in the transaction from real estate agent to mortgage broker wants the price to be as high as possible.
Yes some buyers can avoid involving intermediaries, and that's where Redfin and its ilk can work well. But it is a fact that without negotiation skill and deep experience in the product, all that upward price pressure goes unanswered. Markets aren't magic, they are collections of people, and agents who earn their keep are persons skilled at high touch, high risk transactions between people.
> We're going to fix this.
Redfin's had 12 years and what's more, its flat-rate business model predates the web. Would you like a few more decades?
How is your solution any different to the other hundreds of FSBO platforms currently operating? What value does it bring over Redfin or Zillow? Why would real estate agents, escrow agents, mortgage brokers want to work with you if it means a lower fee for them?
A good agent is worth 10x their commission. A bad agent, of which there are many, is a waste of money. And the big rub is that people who could be buying homes probably aren't simply because they don't know the dozens of tricks that can be employed to make an unaffordable situation affordable, or able to identify a good deal.
If you're comfortable buying a home without any background check, then I guess you don't need a realtor, but I wouldn't do it.
Oh, and the laws that protect realtors, toss 'em. What we really need is Yelp for realtors.