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 home appraisal is not the same thing as a home inspection, the latter being much more thorough,looking for condition of home mechanics, and structure.
This is the flaw here. The seller, real estate agent, banker, and appraiser all have incentives to raise the price of the home. The only person in the transaction who doesn't is the buyer. I've been working on something in this area as a side project, and have been working with the fallout of 2008 in my day job, since 2008... and it continues to this day and the lack of understanding of the incentives here is the main issue. If Zillow wanted to gain customers through their zestimates they would raise the estimate not lower it. After all, more people own homes then are buying one in any given moment. Telling those people how smart they are that they timed the market is a much better way to retain users.
