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Computer vs. Realtor: Computer Wins. Twice. (Techcrunch article on Redfin)

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   posted: Mar. 25, 2008 @ 1:27p
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Article Link

from article said:Seattle based Redfin, a service that you use in lieu of a buyers broker or agent when buying a house.

We explained their model in detail when they launched in mid 2006. A year later the company was interviewed on 60 Minutes. And all along the way there have been lawsuits and litigation threats against the Redfin model - a home buyer replaces uses the Redfin service instead of a broker or agent. Redfin then refunds 2/3 of the buy side fees back to you. The average reimbursement has been $10,520.

No, I have no affiliation with Redfin. Just saw this posted on http://news.ycombinator.com/ (non finance forum) and thought the FWF crowd would find it interesting.

   posted: Mar. 25, 2008 @ 1:27p

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rated:
   posted: Mar. 25, 2008 @ 1:30p
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I wish we would have used them.

Our realtor goes his 3%, plus a $10k bonus as well.

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   posted: Mar. 25, 2008 @ 2:21p
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Traditional real estates days are numbered... It'll be harder and harder to make a living at it.
The only saving grace is the MLS system, in which they've protected data that can be important when buying or selling.

I've used an RE once, I had to have one (required) for a HUD listing.
Everything else: Craigslist rocks.


Still need to do traditional real estate (selling) - do a flat fee listing.
Sale will cost you 3% (brokers agent) + a flat fee (usually under $500).

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   posted: Mar. 25, 2008 @ 5:12p
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I like the idea...I think the primary reason for the difference in sales prices is not so much a redfin difference, but a difference in their clientele (people who are looking for a deal) vs the average Joe. I'd be willing to give them a try on our next property purchase.

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   posted: Mar. 25, 2008 @ 5:43p
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Looking to buy a house now and am using Redfin. They aren't for everyone but if you can manage it they'll do a good job. There are a few reasons why you get a better deal with Redfin. One is that their agents don't get paid more for selling you a more expensive house. A mortgage broker told me never to tell a buyer's agent what I can really afford because the agent will find a way to make it happen. The other is that Redfin negotiators specialize in negotiating, as opposed to a traditional agent who spends most of their time at open houses trying to get new clients and then driving those clients around town.

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   posted: Mar. 25, 2008 @ 6:38p
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Yeah a few ppl mentioned the same thing in the hacker news ("hacker" here is not used in the sense that the media generally uses it) forums - hacker news discussion on the article

raringvt said:I like the idea...I think the primary reason for the difference in sales prices is not so much a redfin difference, but a difference in their clientele (people who are looking for a deal) vs the average Joe. I'd be willing to give them a try on our next property purchase.

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   posted: Mar. 25, 2008 @ 7:07p
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Disintermediate the traditional real estate agencies

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   posted: Mar. 25, 2008 @ 8:19p
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ellory said:Disintermediate the traditional real estate agencies
ycombinator, where OP found the link, is a venture cap group and not a news aggregator first and foremost. Not that that necessarily means anything.

rated:
   posted: Mar. 25, 2008 @ 10:09p
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Thanks for the article!
Another source to find my house.

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   posted: Mar. 26, 2008 @ 1:01a
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kadixon said:Thanks for the article!
Another source to find my house.

I second that. RE agent fees, at least to me, seem like the biggest waste of cash I can image. 3% of my home's price? No way.

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   posted: Mar. 26, 2008 @ 1:40a
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For the lazy, the RE agents do all the work. If you're short on time, it might not be a bad deal.
The rich are accustomed to having other people doing everything. RE is no exception.
If something goes wrong, you can get a lawyer and SUE. Most are required to have bonding of some sort.
Using redfin, getting a house w/ hidden problems may be more of an issue getting compensated.
There is another service, i think Buyside realty, that gives 75% comm. back instead of the 66% with redfin.
As RE crashes down to late 90s levels, the 3% won't seem that bad after all.

Message edited by: PolarDude on 2008-03-26 01:47:41 CDT
rated:
   posted: Mar. 26, 2008 @ 2:09a
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I dont know if the traditional model is going to go away, just change to more of a 1-way agent mode.

I have no problem paying 3% to someone who brings me a buyer. They are doing you a service.

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   posted: Mar. 26, 2008 @ 2:38a
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That's true, but the whole 3% thing seems rather arbitrary to me. I'll be the first to admit I know nothing of how that number came to pass, but I don't see that the value of the house makes a huge difference in the work required to sell it. Again, I don't know a great deal about the details.

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   posted: Mar. 26, 2008 @ 12:48p
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studiddy said:That's true, but the whole 3% thing seems rather arbitrary to me. I'll be the first to admit I know nothing of how that number came to pass, but I don't see that the value of the house makes a huge difference in the work required to sell it. Again, I don't know a great deal about the details.

And there you go; the biggest problem with realtors. There's no good reason they should get paid a pittance for a $45k house but king's ransom for a $2mil house. If they switched to a flat-fee system, they may last a few more years.

But the Internets are coming! Watch out realtors.

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   posted: Mar. 26, 2008 @ 12:59p
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Wow, that article has some horrible grammar.

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   posted: Mar. 26, 2008 @ 11:57p
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I recently bought a house using Redfin and was relatively happy with the service, VERY happy with the $9k+ that got kicked back to me.

For Internet-savvy folks like ourselves who like to do our own research and comparison shopping, Redfin makes sense. If I'm finding the house, checking comps in my area via local property records online to determine what to offer, and am comfortable working with an agent over phone and email, then why not?

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   posted: Mar. 27, 2008 @ 12:18a
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We sold our house, 2 years ago this month. My agent wanted to price it lower than me, but I insisted it was worth it, based on my observations of the neighborhood.

She listed it for me and the first guy that looked at it gave full asking price, paying all costs. The inspection turned up $3500 of foundation repair work to do, but the sale went through. The only thing my agent did was list it, and a little paperwork. She was worthless. Forking over the money for her commission really ticked me off.

She still calls every now and then and sends a card for Christmas...but she doesn't even get my first name right.

We built the house we're in, so we didn't use an agent to buy it.

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   posted: Mar. 27, 2008 @ 9:33a
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Remember as with any large purchases, you can always negotiate for a lower commision. It won't work on low priced homes, but on high priced homes in a market that is hot they may take less since they will not have to pay so much for advertising for a long time.

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   posted: Mar. 27, 2008 @ 11:29a
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Real Estate Consumer Bill of Rights:

http://www.redfin.com/about/consumer-bill-of-rights

I encourage everyone to send the above to their local state representative so we can repeal some of the unfair laws preventing Redfin and similar sites from operating in all states.

Message edited by: omarECD on 2008-03-27 11:30:12 CDT
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