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Has anyone had experiences dealing with them that they'd like to share?
I know of them from the UK but I've never used them and I don't really see them very much in the areas that I am aware of - a couple of listings here and there and not much more. Much estate agent presence is local firms so while they claim (I believe) to be the biggest nationally and certainly the biggest online one, I don't believe they have a very big market share.
Many will know that I am a big fan of alternative models but I'm not going to be championing this one as I always post without bias and I like to be fact based. My personal feeling is that they will struggle in CA. In their home turf of the UK, they don't really have a lot of buzz around them, except for some level of being a darling in the investment community. Obviously there is a huge amount more fat/margin to attack in the US market (say 5.5% agent fees to sell in the US vs. 1-1.25% in the UK). But I just don't really feel it with this company. UK companies selling to consumers have a very poor record entering the US market and trying to translate UK (and other country) models to the US. They usually struggle to understand the market with enough intimacy, despite always investing in local people. I don't feel that they've yet even come close to critical mass in the UK market which is much simpler (no silly buyer's agent concept and I wonder how they will deal with that issue) and US real estate industry is vastly different than the UK's. And obviously US is not one single market but at least 50 different regulations, etc - it's a very locally oriented industry. I may be very wrong but I predict a crash in the US market like Foxtons (and Tesco and many others).
I know of them from the UK but I've never used them and I don't really see them very much in the areas that I am aware of - a couple of listings here and there and not much more. Much estate agent presence is local firms so while they claim (I believe) to be the biggest nationally and certainly the biggest online one, I don't believe they have a very big market share.
The article says their first market is CA and that they just started taking listings in Fall 2017, so perhaps the low market share isn't too surprising?
The article says their first market is CA and that they just started taking listings in Fall 2017, so perhaps the low market share isn't too surprising?
I was talking entirely about the UK, where they started. I thought that was very clear in my post but apologies if it was not well comprehended.
Their first market is not CA as they have a presence in the UK and Australia. First US market is CA.
Much as I love the agent who helped me purchase my current property, I'm not sure I love her to the extent of the $40K she wants to list it. I think the traditional brokerages' lock on the RE market is about to end.
Much as I love the agent who helped me purchase my current property, I'm not sure I love her to the extent of the $40K she wants to list it. I think the traditional brokerages' lock on the RE market is about to end.
that was a good read. I did find it a bit interesting the author didn't double-check some word usage with a couple of real estate brokers.
Regardless, semi - the listing half of the commission you'll pay is $40K, or the total is? Per the article and what's going on throughout the country - you can save money on the listing side easily, but not so readily on paying the buy agent side.
that was a good read. I did find it a bit interesting the author didn't double-check some word usage with a couple of real estate brokers.
Regardless, semi - the listing half of the commission you'll pay is $40K, or the total is? Per the article and what's going on throughout the country - you can save money on the listing side easily, but not so readily on paying the buy agent side.
Exactly(what you say in bold). That's the stranglehold that regulation needs to break. In the UK where purplebricks originates, commission is circa 1% total now (total because buyer's agents don't exist in a split commission model). So there is only so much you can squeeze from the listing side if the buyer's side (where value for money is so poorly lacking) is proving to be a fortress.
Generally I am very skeptical of these services that do not/cannot address the buyer's agent side of the equation. At least they open up the potential for new thinking among consumers but their value is capped as long as the buyer's agent commission split is so impenetrable.
I think that the arguments for traditional agents in this article were particularly poor. I think the value proposition needs a lot of work and the articulation of that proposition needs to be keener. Examples in the article:
-vague notion that alternatives are 'cut-rate' or like flying economy. Or Walmart or Motel 6. Come on, you can think of better arguments than that. Ethically, I think those kind of claims might be questionable as well.
-The emotional appeal of the home being where your kids took their first steps, etc. come on. That's not how people think anymore. Like the old insurance salesman's line "how do you put a price on protecting your family". Or diamond rings "Isn't two months' salary a small price to pay for something that lasts forever?". This is linking money spent to values (love, security, etc) rather than actually value for money. Yeah good marketing decades ago but I can see millennials gagging over such claims that it's worth spending 10s of thousands on commission because your baby will take her first steps in that home!
-"I'm involved in your life". yuck. young people do not want this. i can't believe that this is a quote from a spokesperson. That's why the family insurance agency is dying. old way of looking at the world.
For those who have poor comprehension, I'll clarify that my point here is not that traditional agents are or are not good or bad, etc, the point here is that the articulation of the value proposition for traditional agents in this article was outdated and just plain awful. The industry has to do far better than this if it wishes to survive.
Last edited by just_because; 02-11-2018 at 10:10 AM..
Exactly(what you say in bold). That's the stranglehold that regulation needs to break. In the UK where purplebricks originates, commission is circa 1% now (total - buyer's agents don't exist in a split commission model). So there is only so much you can squeeze from the listing side if the buyer's side (where value for money is so poorly lacking) is proving to be a fortress.
Well, one step at a time! I agree with the cut-rate agents that with the rise in digital shopping for real estate, there's less to do, both on the listing and buying sides.
Generally I am very skeptical of these services that do not/cannot address the buyer's agent side of the equation. At least they open up the potential for new thinking among consumers but their value is capped as long as the buyer's agent commission split is so impenetrable.
I'm wondering whether we won't eventually see some changes in the buy side as well. For example, a property-specific model where buyers hire the agent to show them only one or a few properties the buyers have found on the MLS or other web sites for a minimal hourly rate, with a "bonus" at closing if the agent helps them actually buy one of the properties. If buyers had to pay their agents for their time, the agents would touring a lot fewer properties.
-vague notion that alternatives are 'cut-rate' or like flying economy. Or Walmart or Motel 6. Come on, you can think of better arguments than that. Ethically, I think those kind of claims might be questionable as well.
-The emotional appeal of the home being where your kids took their first steps, etc. come on. That's not how people think anymore. Like the old insurance salesman's line "how do you put a price on protecting your family". Or diamond rings "Isn't two months' salary a small price to pay for something that lasts forever?". This is linking money spent to values (love, security, etc) rather than actually value for money. Yeah good marketing decades ago but I can see millennials gagging over such claims that it's worth spending 10s of thousands on commission because your baby will take her first steps in that home!
-"I'm involved in your life". yuck. young people do not want this. i can't believe that this is a quote from a spokesperson. That's why the family insurance agency is dying. old way of looking at the world.
I sure agree with you here! It just shows how weak the economic argument is for traditional representation. The realtors can't really support it with hard $ values.
Anyhow, I am interested in seeing how this all plays out.
that was a good read. I did find it a bit interesting the author didn't double-check some word usage with a couple of real estate brokers.
Regardless, semi - the listing half of the commission you'll pay is $40K, or the total is? Per the article and what's going on throughout the country - you can save money on the listing side easily, but not so readily on paying the buy agent side.
Even if I went to the Redfin model (1% to the listing agent, 2.5% to the buyer's agent) I'd still save about $15,000. I can think of other things to do with that money -- like pay the movers.
Even if I went to the Redfin model (1% to the listing agent, 2.5% to the buyer's agent) I'd still save about $15,000. I can think of other things to do with that money -- like pay the movers.
understood, but the original post placed the entire $40K on what you could save on the listing side. therein lies the issue.
Right now, almost uniformly across the country, we're in a huge seller's market where people see homes "selling themselves in a matter of days". Of course, when that's the sentiment and the apparent situation, paying someone a large amount of money for "what a poolboy can do" (as has been posited in the last 30 days) doesn't make sense on paper.
No matter the market, one side or the other is working very hard - and it's whichever side has the weaker position. In a seller's market, the listing agent compensation looks excessive. In a buyer's market, when you can basically offer 90% of market value on whichever of the 10 options you like the most and get it, the buyers' agents seem overpaid.
when the chances for success are extremely high, then there will always be business models that accept that risk of compensation. Redfin can offer 1% listing now, collected at a successful closing, because homes are selling so quickly. The risk that they won't get paid is pretty darn low.
But Redfin's model, on paper, should be no more appealing than any highly-qualified, experienced, and proven-successful agent that charges 3 or even 6%, just on the list side. What should appeal most would be the $500 MLS listing model, plus you provide the professional photos. When "all" houses "sell themselves" and you can expect to get multiple offers whereby negotiation isn't needed ... go for the absolute lowest-cost model.
I've said numerous times that I'd be happy to work on a pure hourly basis, with an upfront retainer. That side of the argument refuses to acknowledge that the vast majority of people do NOT WANT TO WRITE A BIG CHECK UPFRONT.
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