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Just look at how fast Uber is changing the regulated taxi industry. And how fast Airbnb is changing the regulated hotel industry. Both disruptive technologies to the status quo and gaining popularity very fast.
Long term...... given the choice between paying someone 6% commission or paying around $500 which one do you think the sellers will choose? Right now biggest reason people choose a realtor with MLS is because that is where all the eyeballs are. Once zillow/trulia/etc change that, there will be no reason for a seller to use a realtor or MLS.
IF zillow/trulia/etc change that, there will be no reason for a seller to use a realtor or MLS.
Just look at how fast Uber is changing the regulated taxi industry. And how fast Airbnb is changing the regulated hotel industry. Both disruptive technologies to the status quo and gaining popularity very fast.
Long term...... given the choice between paying someone 6% commission or paying around $500 which one do you think the sellers will choose? Right now biggest reason people choose a realtor with MLS is because that is where all the eyeballs are. Once zillow/trulia/etc change that, there will be no reason for a seller to use a realtor or MLS.
Realtors will need to adapt to this new reality.
Just as Uber and Airbnb are unregulated and on average expose users to more risk, Zillow/Trulia, etc., expose their users to risks (inaccurate, sometimes wildly so, information.)
I don't want to get into a big debate about the necessity of realtors, and I do think that in a perfect world, sellers could all be successful as FSBO. I believe that we basically sold our own house. We did the photos and description and set the price based on our own analysis, lower than our realtor suggested. The listing went up on sites we could access ourselves for a small fee. The realtor only had two showings before it sold at full price in a slow market.
BUT real estate, like other professions, is partly in the business of protecting its own interests. There may be a tipping point, but right now FSBO are at a distinct disadvantage and many agents will not look at such homes. I, as a buyer, wouldn't really want to be shown the house by the seller, either, as often happens with FSBO. (Not to mention it seems that with very few exceptions, FSBO sellers wildly overprice their homes, not that many represented sellers don't do that..... But, we're talking about a hypothetical time in which sellers are all very savvy.) There's no benefit to me, as a buyer, in working with a FSBO seller. I don't pay the commission (see discussion above), I don't want the seller hanging around while I'm looking at a house, I want my realtor to negotiate with someone knowledgeable about the field and related laws, and I don't believe that FSBO owners "discount" the selling price because there's no commission. So from a buyer's perspective, what's the benefit? The only thing I can think of is if a buyer is a recent seller and perhaps has more money in his/her pocket from having sold without paying a commission. Still, I think it's all a wash... positives as a seller (in this perfect future world) but still negatives once in the buying position.
Edit: I think even the savviest buyer and seller, unless they are very frequent buyers and sellers, do miss out on certain "inside" knowledge which Zillow and Trulia doesn't publish. I see things on here all the time... buyer thinks, "the inspection revealed some problems in the house for which I'm under contract. House down the street doesn't have problems, and it sold for the same price. Seller should lower price." HOW DO YOU KNOW what the situation was and how much came up in the inspections and how much work the seller may have done? Or sellers think, "X house sold for $X" and it's smaller than mine, so I should sell for more than that. But they don't know what kind of concessions the seller may have made and what the true net amount to seller was. Or, both parties miscalculate the value of certain features. So, I do think that in most cases it can be valuable to have an experienced realtor raise issues the buyer or seller may ignore on their own.
Last edited by cowbell76; 06-20-2014 at 09:29 AM..
From this manner of thinking, then one would have to say that the Buyer is paying for everything on the HUD-1 Settlement . As if the Buyer is paying the Seller’s taxes, utility bill pro-rations, etc. It is not correct thinking. Just like it is pre-determined that Seller will pay his property taxes, Seller has pre-determined that with His funds he will compensate those who have helped him or her sell their home. It is His money that is paying the commission.
You're right. It does sound better when as a buyer you hear " Its the seller that pays commission...."
In the near future we'll look back at these discussions and laugh. Zillow will provide free forms for all states, offer listings for a small fee and buyers and sellers will be able to hammer out the deals directly with no stinkin Realtor screwing up the process and scraping 6% off the top. Zillow will maintain a list of title companies and attorneys happy to handle closing for a competitive fee and perhaps the former Realtors will agree to unlock vacant houses for $50 a shot.
This ain't crazy talk. It's already started and coming to a town near you.
and Zillow has been building the nation’s trust by advertising homes for sale that are not for sale. and stealing agent’s listings and acting like the listings are theirs. They are going to do a lot for you and your money. Trust them. As you are singing
“Find your way homeâ€
You’re not just looking for a house. You’re looking for a dishonest advertiser you can trust so you can buy a home through them.
In the near future we'll look back at these discussions and laugh. Zillow will provide free forms for all states, offer listings for a small fee and buyers and sellers will be able to hammer out the deals directly with no stinkin Realtor screwing up the process and scraping 6% off the top. Zillow will maintain a list of title companies and attorneys happy to handle closing for a competitive fee and perhaps the former Realtors will agree to unlock vacant houses for $50 a shot.
This ain't crazy talk. It's already started and coming to a town near you.
I'm going to disagree with you. Zillow's revenue comes from professionals who advertise on their site - realtors, rental agrncies, etc. Their future growth includes expanding those professionals into other fields like home improvement, mortgage companies, etc. Blowing realtors our of their jobs would defeat zillows entire business revenue model.
How do I know this? Spencer Rascoff, the CEO, is a relative of mine. I don't always agree with what goes on with zillow (particularly the zestimates), but your predictions are dead wrong.
Just as Uber and Airbnb are unregulated and on average expose users to more risk
At the end of the day... people are willing to accept risk. I've used uber (NYC) and airbnb (Hawaii) and they both worked out great.
Quote:
Originally Posted by cowbell76
Zillow/Trulia, etc., expose their users to risks (inaccurate, sometimes wildly so, information.)
MLS can be inaccurate as well. Its only as good as the dummy entering the info. Real estate info needs to be verified by the buyer. Always has, always will.
I'm going to disagree with you. Zillow's revenue comes from professionals who advertise on their site - realtors, rental agrncies, etc. Their future growth includes expanding those professionals into other fields like home improvement, mortgage companies, etc. Blowing realtors our of their jobs would defeat zillows entire business revenue model.
How do I know this? Spencer Rascoff, the CEO, is a relative of mine. I don't always agree with what goes on with zillow (particularly the zestimates), but your predictions are dead wrong.
I respect your right to disagree. I'm wrong all the time. Ask Spence about what Nationstar is planning for Homesearch.com and whether Zillow is contemplating something similar with an auction or paid listing model? The agent advertising revenue is but a small piece of the pie for a national MLS which the 3 major players are close to becoming. They will retain that agent advertising anyway but the agents will be advertising for services which are costing consumers far less than today's 3 to 6%. Again, I may be wrong, but it sure looks like the trademarked capital R has a very different and lower-paid future.
How do I know this? Spencer Rascoff, the CEO, is a relative of mine. I don't always agree with what goes on with zillow (particularly the zestimates), but your predictions are dead wrong.
And I suppose your relative..... is going to share.... with you.... his companies most secret plans for the future? LOL.
I think this has been covered, but here is my take as a seller.
I signed a contract stating that, if a buyer comes without representation, I am to pay my realtor an additional 3% for someone in their office to represent the buyer. I suppose the buyer could say they don't want to work with ANY realtor, but I'm still on the line for the additional 3%.
Because of that, I'm not willing to "give" the money that the realtor would have made off of the price to the buyer. I'm going to evaluate the offer just as if it were coming from someone with their own realtor.
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