"It's a tough racket."
Posted on 08/07/2017 11:03:31 AM PDT by dragnet2
A real estate technology company that aims to lower the cost of home-selling by using robots and “big data” instead of commission-based real estate agents has opened a Long Island office — its first outside of California.
REX Real Estate Exchange, which charges a selling commission of 2 percent instead of the usual 5 percent to 6 percent. The Los Angeles-based company expects to start listing New York-area homes on its website, rexchange.com, later this week.
Traditional real estate fees “are just crazy high compared with every other industry in the United States,” said Jack Ryan, Rex’s chief executive and a former partner at Goldman Sachs. Decades ago, investment brokerages charged 12 cents a share for stock trades, but now they charge less than a penny, he said.
Another new entrant to the housing market is EasyKnock, a Sag Harbor startup that is rolling out a website designed to match sellers with buyers without the intervention of brokers.
In a typical home sale, the commission gets split between the seller’s and buyer’s brokerages. If a home sells for $300,000 and the seller pays a 6 percent commission divided equally, each brokerage receives $9,000 and pays out a portion of that to the agents.
That could change once sellers and buyers discover how much they could save, REX’s Ryan said. For instance, he said, if the seller or buyer of a $500,000 home saves 3 percent on real estate brokerage fees, that adds up to $15,000.
It's working brilliantly in southern California,” where the company closed 30 home sales in June, he said.
Moreover, he said, when his home sold for $518,000, “we saved $21,000 by using REX. That’s indelibly inscribed in my head.”
(Excerpt) Read more at newsday.com ...
They meet with the seller, get the seller to sign some paperwork, take pics of the home, print some flyers, upload to MLS and show the house a few times. How does this equate to $15,000 or $20,000++ in in sales commission fees?
I have never paid people 5 or 6 percent commission for such little work...
I personally believe technology will eventually remove the costly practice of using a realtor to sell a home.
That could change once sellers and buyers discover how much they could save, REX’s Ryan said. For instance, he said, if the seller or buyer of a $500,000 home saves 3 percent on real estate brokerage fees, that adds up to $15,000.
Kind of like the folks that dictated that you had to spend 'two months salary' on an engagement ring.
Don’t Zillow, Trulia, et al already do a good job matching buyers and sellers?
Besides, commissions, like everything else, are negotiable.
I really hope the continue being successful.
I have always felt, from the very first home I ever bought and sold a home, that real estate sales commissions were totally out of line. Outrageous would better describe it.
I really hope the continue being successful.
I have always felt, from the very first home I ever bought and sold a home, that real estate sales commissions were totally out of line. Outrageous would better describe it.
I really hope the continue being successful.
I have always felt, from the very first home I ever bought and sold a home, that real estate sales commissions were totally out of line. Outrageous would better describe it.
... or those people that insist the fork goes to the rigt of the plate... or is it the left? Whatever.
These people are salespeople too. I had mine show me nine houses before finding one I wanted to pick, a couple decades ago. The success rate has to be taken into account. I trust so called big data only about as far as I can throw it. It’s only as good as those who vouch for it.
You have to really patient and you need to love dealing with all kinds of people (and a lot of nonsense) to be successful at it.
That all said, technology and data is making it much easier for buyers and sellers to meet each other without a realtor in between. I would say that this is definitely an endangered business in the home market. Though commercial properties and more complicated residential transactions will still need professional go-betweens for the foreseeable future.
Who cares what they call them if you’re saving $15,000 to $20,000 in sales commission alone?
And why would you need anyone to show you a home? Are you not capable of seeing it yourself? Do you need someone else to make up your mind for you?
Cue the scene from Robocop
In a normal market that means the house is priced too high. This is not complex.
Btw, so what if it takes months? It's not like the agent are holding their breath until a buyer happens. All they're waiting for and care about is their bloated commissions.
And would waiting a few months be worth saving about $20,000? ☺☺
"Buy this house or, there's going to be trouble."
Have you ever worked selling real estate?
"It's a tough racket."
RE agents don't deal with slow markets. All they do in that situation is simply keep telling the seller to lower their price until it sells.
Sometimes it's better to just have a professional do it. It depends on the individual. Some people are probably savvy enough to sell and buy a house on their own. All the power to them. I'm comfortable changing the oil on my car but I understand others couldn't be bothered and don't mind paying the Jiffy Lube extra money to do it for them.
Before 2000 it was fruitless to try to sell without access to the closed system of realtors.
Slowly, FSBO-type systems emerged. They gave access to the MLS, but realtors deliberately avoided all FSBO homes.
However, like you I am convinced the internet will kill them.
Dead.
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