You have to pay a fee to join each one. I've heard a lot of tech people clamoring for a central MLS service but the local groups are well aware that controlling the listings protects the entire field.
There's so many hands in the pot from banks to inspectors to attorneys to insurance before you even get into the liability insurance that each one of them (and the realtors) have to carry for these transactions...since there are so many opportunities to get sued.
It's not going to be an easy nut to crack, but it should be fun to watch all this money try.
For example, to just do all the paperwork, a realtor might offer a "transaction only" service for "only" 1%. Regardless of property value, it's the same paperwork and usually done by a clerk. I instead went to an honest (!) attorney, flat rate for his time, it was around $1500 to do the same task. He reviewed contracts, attended closing, gave advice. Easy, done.
I think there's so much monetary friction from these parasites that any automation and fair pricing will erase whole professions.
And RE attorneys usually make <2k/deal, with a lot of that being add-ons from things like owning their own title company. You paid market rate, as best as I can tell.
And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house on the MLS).
Uh, should it? I doubt many people sell homes nearly as often as they file taxes.
> It's not going to be an easy nut to crack, but it should be fun to watch all this money try.
Or maybe they'll use "UBER" as a verb: "Let's 'UBER' the real estate market!"
As someone who’s researched real estate, I have a hard time seeing how tech can help the RE industry. For starters, RE bubbles have led to the worst economic downturns. If people can buy homes so easily that they can profit on making superficial changes, then prices will go up far above efficient. That pushes actual “householders” out of the market. Also, look at the dumpster fire that is Silicon Valley RE.
If I’m thinking of ways tech may help RE:
-Actually providing previously unavailable or unobservable information to buyers. Knowing a home will require expensive repairs soon would, in aggregate, help correct valuations. Alerting people of a home being in a flood plain, hurricane path, etc would help.
-Helping potential buyers with otherwise good credit but lacking some of the traditional requirements could help. But again that would probably also make flipping so easy and profitable to really screw up the market.
-Disrupting the contractor/developer industry could flush some seriously awful bad actors out.
-Making rent and RE cheaper would boost the long term wealth of the country - by diminishing the portion of household income devoted to RE. Particularly, rent. Rent shouldn’t be anywhere near comparable to mortgages. You never get to see rent money again. (Here’s an idea: make a “shitty apartment” insurance. People pay an upfront insurance cost on moving into a new apartment. In return, if at any time during the residence they want to break the lease for a “qualified reason” the insurance helps them negotiate the process and ponies exit costs. Eventually a complex’s insurance premium would be enough to signal to potential renters about a place.)
I would pay for a service that gives me a reasonable 10-50 year estimate of climate change impacts on a given real estate area. I haven't been able to find this so far. Presumably very large RE investors have access to such information, but for the average consumer...?
Buy at a decent altitude, higher up than surrounding areas where water can drain into, and that has access to a water and food source which seem resilient. But who knows when a fire or flood or earthquake or whatever will come ruin your plan.
why not? rent probably should not be egregiously larger than the mortgage payment, but rent needs to at least price in the risks related to owning a property long term.
How am I supposed to rent you a house if the rent you pay is less than the mortgage I have on the house? How do I build a pool of money to use for repairing the things that inevitably break?
Can't get on the specifics as it varies country to country and even local regulations but as anecdotal evidence, I'm currently looking at a property in my hometown, with a mortgage of 80k€ (cost of mortgage 7k€, 10 years). This property would rent at 4000€/y, resulting in a yearly loss of roughly 4000€ (you read that right).
With local incentives and tax shelters, I would still net 18k€ in gain over 10 years. On a 80k€ property, that's a 21% ROI....
If the rent is more than the mortgage why would I rent? Beyond potential credit problems (which can generally be solved within a matter of months barring egregious exceptions) and maybe conveyancing and transfer fees (which can be negotiated into a mortgage loan), you'd have to be a fool to rent.
Apartments generally suck compared to owning a house. You’re literally paying to have a manager over you. You’ve probably got stairs to lug everything up/down. You’ve got neighbors above you making you listen to their crap - and if their apartment floods because they did something dumb or just a freak occurrence, you’re flooding too. Etc etc. but it makes sense for that to be profitable when a complex can operate with economies of scale.
"Buy-to-let" has changed this but perhaps that is not a good model.
If that can amount to help, maybe burning it to the ground will do it?
Google Ziroom and what it did to rental market in China.
Were something similar to appear and get hold USA, expect American RE companies in big cities to burn down within a year.
But I doubt this prospect, I bet rich RE boys will spare no money lobbying to nuke it like they did with Airbnb.
Certainly, let us not forget a rich RE boy lives in the White House right now.
If Google really wanted to make a dent here, getting serious about remote first employment at Google would be a game changer even if the enabling tech never made it into the Google suite.
Also, tech has been in real estate for a very long time. Zillow, Trulia, Redfin, etc were supposedly "disrupting and revolutionizing" real estate before smartphones got popular. I remember reading about this more than a decade ago. My god time flies.
From 2007.
Redfin On 60 Minutes Tonight – Real Estate Market Disruption.
https://techcrunch.com/2007/05/13/redfin-on-60-minutes-tonig...
Zillow has created a real estate revolution.
http://archive.fortune.com/magazines/fortune/fortune_archive...
Unfortunately, agents in my area still take a pretty standard % of any transaction, so those tech sites haven't made a dent in the cost of the transaction.
The thing is, there were many brokers - it was a distributed system. In the scenario where Zillow is wildly successful it will become a monolithic gatekeeper to real estate transactions - a highly centralized system.
It's pretty ironic that the internet has become such a centralizing force, when its promise was to radically decentralize everything.
> “The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore ISI, a market research company. But the skepticism often fades as they realize Opendoor makes money by providing a service to home sellers, rather than on price appreciation, Mr. Kim said. Even if the company breaks even on a sale, the transaction fees are a meaningful business.
My recent experience in selling a property is that no buyers could find the property and contact me until I hired an agent. Listing it FSBO resulted in calls from agents, not buyers. Every agent had a horse in their stable that they wouldn't share with me unless I paid them a commission.
Figure out how to make it emotionally and legally safe for buyers to acquire property without an agent and I think that would help. All to often we think we need representation, which is expensive, when we actually don't.
The question is raised whether there are more efficient or straightforward methods of doing transactions of real estate. Why shouldn’t buying properties globally be as simple, as buying a laptop from an online store in a different country? Some of the benefits of being able to purchase real estate globally easily: -You’d able to invest low amounts for a stable return -The real estate market would gain liquidity -You’d have access to multiple markets
Blockchain technology is one way this can be done, and we’ve already had successful global real estate transactions on our platform using it.
It's software-enabled realty for home sellers. Costs like $1.5k instead of 3%.