from Hacker News

Redfin Is Leaving the National Association of Realtors

by infrawhispers on 10/3/23, 1:17 AM with 366 comments

• by Xcelerate on 10/3/23, 1:54 AM

  Props to Redfin. If there’s one area I’d love to see Silicon Valley actually disrupt, it’s real estate. There’s too many middlemen in this process— personally I don’t even think houses should be investments. I’ve never bought the argument by hedge funds that “we add valuable liquidity to the market (*for only a few billion dollars in fees!)”, but perhaps that argument might hold water for real estate.

• by goalonetwo on 10/3/23, 2:08 AM

  YES! It is about time that realtors get disrupted.

  They take 6% out of most housing transactions and add very little value. They managed to put themselves in the critical path by lobbying and regulatory capture. You don't get access to the listings and MLS open houses unless you go with a realtor. They also made the process artificially complex.

  Most other countries seem to rely on direct customer to customer for most transactions, with a notary making sure the contracts are binding. Why can we not do that in the US?

• by woeirua on 10/3/23, 4:18 AM

  There’s some subtext that I think most commentators are missing. NAR and some of the major brokerages have been under intense anti-trust legal pressure this year. By all measures it seems that these lawsuits are working. REMAX just settled one of these lawsuits to the tune of ~50 million and has promised to change their business practices, potentially including dropping the requirement that REMAX brokerages must be members of the NAR [1].

  Let me be clear. Redfin is only breaking ties now because the NAR is fatally wounded. Redfin now thinks they can scoop up a lot of market share in the chaos that is going to happen in the next year. They’re not doing this for altruistic reasons.

  [1] https://www.housingwire.com/articles/re-max-settles-buyer-br...

• by caseysoftware on 10/3/23, 2:06 AM

  > In about half the U.S., including in cities like Charlotte, Dallas, Houston, Las Vegas, Long Island, Minneapolis, Nashville, Phoenix and Salt Lake City, we can’t quit NAR individually or en masse, because NAR membership is required for agents to access listing databases, lockboxes, and industry-standard contracts.

  This sounds like they're making a case for cartel behavior.

  With the general unaffordability of housing, realtors are a good target right now. Not that they have anything to do with interest rates or have more than minimal impact on asking price, most people aren't going to think that far.

  That said, if Redfin can open up access better (and still securely!), this could work out in the long term too.

• by ajhurliman on 10/3/23, 2:07 AM

  “Redfin will go further than resigning from the NAR board, requiring our brokers and agents to leave NAR everywhere we can”

  Wow, they’re really pulling out the big guns. I applaud their efforts to decouple MLS access from NAR, that seems to be the biggest hurdle in advancing the industry.

• by ultrasaurus on 10/3/23, 2:59 AM

  Bought our first house with Redfin a few months ago and they did a few things really well: sharing data (you can download their results to CSV and chart hundreds of homes in an area), and they pay people a fee for service -- so there was always someone happy to show me just one more house.

  Technologically it's a market that's ripe for disruption, but socially as well: there just isn't enough boom left in the market to fund 1.5MM people working in it full time.

• by nocoiner on 10/3/23, 2:32 AM

  I actually don’t hate realtors. In my jurisdiction, seller pays, so it kind of only feels like 3% to me. I have no idea if that’s economically valid, but when I’ve sold a house, I felt like I got my money’s worth on market knowledge and advice. Maybe I just had the fortune to be working with good people.

  Possibly I’m a cynic but I suspect Redfin’s endgame here is not to reduce transaction costs but to capture those for themselves instead. Perhaps part of my cynicism is looking at transaction expenses in jurisdictions without realtors - usually there’s some middleman who tends to capture a single-digit percentage of transaction value (either a notary or the government or both or others). Funny how that pattern seems to repeat itself.

• by bentt on 10/3/23, 2:30 AM

  This is fantastic news. Realtors have had their hands in the cookie jar for too long. Now that information is so much more accessible because of the internet, realtors simply are not needed. Anyone can buy or sell a house.

  That said, I don't think consolidating the fees in a tech company is necessarily a win for the greater society.

• by brightball on 10/3/23, 2:51 AM

  While it would be fun to see this work, NAR knows that the entire value prop for them to exist is the MLS systems. If realtors ever open access to that, their entire profession will collapse overnight.

  I briefly had my license and the entire industry is like a giant pyramid scheme with fees on top of fees on top of fees.

  I’m half tempted to reopen my license just to get involved with Redfin because I have no real estate relationships to lose.

• by poulsbohemian on 10/3/23, 6:42 PM

  FWIW, as a Realtor: The NAR and related state / local associations should go pound sand for a lot of reasons. I am forced to pay them a lot of money each year, for almost no benefit to my business or my clients. The code of ethics is probably their single greatest contribution to the public, but without state and local agencies willing to punish bad agent behavior, it's toothless. Many of the recent lawsuits over commissions and agency where the NAR has been a party have not been to the benefit of the general public, and the NAR has been absolutely weak in its defense of both the public AND realtors.

  All that said - Redfin can also go pound sand. They exploit information asymmetry where the public doesn't understand real estate services and think Redfin et al are somehow standing up to big bad exploitative realtors. Look man - the new boss is the same as the old boss and Redfin et al are not doing you any good. Find a good agent you trust in your local market, or go your own way if you think you can do better.

• by user3939382 on 10/3/23, 2:38 AM

  Used them once. They use a team leader who has agents meet you. The agent that met me was clueless and knew nothing about the house. The team leader gave me horrible advice and almost 0 communication. Just 1 experience maybe other people have luck but I’d never call them again.

• by happytiger on 10/3/23, 2:05 AM

  Wow. Gloves are off.

  If they pull this off they will crack open innovation and some long overdue lower cost options into the real estate markets.

• by aabajian on 10/3/23, 1:52 AM

  If Redfin can create a competitor to the monopolistic MLS (owned by Realtor.com), more power to them.

• by xnx on 10/3/23, 3:08 AM

  I would much rather the feds go after the National Association of Realtors, cable companies, and any number of other organizations before Google. People love Google (vocal part of HN excluded). People do not like Realtor fees and cable companies.

• by elteto on 10/3/23, 2:18 AM

  Now, the next logical move for Redfin is to sue for access to MLS. This may be in fact building up ammunition for the case. They probably expect the NAR to susped MLS access. No way NAR will give away access to its crown jewel and Redfin is more-or-less dead in the water without it.

• by rainyguy on 10/3/23, 3:34 AM

  NAR is just the gatekeeper to the MLS. MLS access is the real benefit to being a part of these associations. No one wants to actually pay these fees. And if Redfin could be the one to disrupt and democratize access to these databases, it would be awesome for buyers and sellers.

  Of course, this probably comes at a cost to realtors who get their margins squeezed even more.

• by blindriver on 10/3/23, 2:34 AM

  Some realtors are worth it.

  We sold and bought our house in 2021. We bought for $1 million and sold for almost $3 million over 8 years. When it came time to selling the house, my realtor was able to extract an extra $100k from the buyers as well as make it an all-cash offer with no contingencies.

  When we bought our new house later that year, the house we were looking at was on the market for about a month. We were going to give an offer at list price, but she could tell the selling agent was a bit desperate, so she was able to get it $100k below list price, something that is unheard of in the SF Bay Area.

  Overall she netted us $200k over both transactions, and she was singlehandedly the reason for this. That's what you get when you have a really good agent.

• by ccvannorman on 10/3/23, 6:07 AM

  I see a lot of comments here promoting tech to displace or disrupt realtors. "6% is too much", etc.

  As a buyer and seller of multiple homes, I've not had success with RedFin and I've had varied success with realtors.

  That said, a good realtor is absolutely worth 6%. A bad realtor (of which there are plenty) is actually worse than DIY / RedFin.

  I say this because I want everyone with the position that "Realtors are never 6% value" to consider that they may have simply not worked with a good realtor yet.

• by gedy on 10/3/23, 2:26 AM

  Wonder if it even matters, as when we bought our house ~12 years ago, we used Redfin as our buying agent, and, even though we had a real realtor working for us through them, the selling agents were super defensive and refused to deal with her. They would only deal with us directly and we'd have to forward info to her, etc.

  First home so had no idea how this was supposed to work, but seemed other real estate agents didn't treat Redfin as a "real" realtor in any case.

• by midnitewarrior on 10/3/23, 2:26 AM

  The NAR is in desperate need of a disruption. I hope Redfin accomplishes this. The MLS is a monopoly and tying it to NAR membership is wandering into antitrust territory.

• by jackcosgrove on 10/3/23, 3:17 AM

  I see Redfin as one or two points on a continuum of service-cost tradeoffs in the real estate market.

  On one end is a traditional realtor arrangement, with the 5% commission divided between the two agents. On the other end is for sale by owner, with potentially no commissions. Adjacent to that is a flat fee listing service, which costs about 2.5% in buyer's agent commission. If you sell through Redfin, your total commission is reduced to 4% from the industry standard 5%, with 1.5% going to your agent. If you buy through Redfin within twelve months of selling through them, you get an additional 0.5% off the commission for a grand total of 3.5%.

  Not bad. It can save you $10k or more at jumbo mortgage house prices. Redfin has already done well by doing good and offering a differentiated product in the middle of two other offerings.

  I have sold two properties, one using a flat fee listing service and one using Redfin. The former was a fair amount of work, while the latter was way less, comparable to a traditional realtor in the level of service offered. I would recommend Redfin to anyone.

• by outside1234 on 10/3/23, 2:14 AM

  Now HERE is the anti-trust trial we need. How is it that some slimy org controls the only access to price information nationally?

• by etchalon on 10/3/23, 2:23 AM

  There were few things more frustrating to me when we were buying our house, which we were currently living in, from our landlords, for a price we all agreed to over the phone, that we HAD to employ two realtors who, despite doing little more than paperwork which I could have done myself, took 6% of the sale price.

  It's a grift.

• by QuadrupleA on 10/3/23, 2:24 AM

  Slight grandstanding aside, this is great. NAR and the buying / selling agent system in the US is egregiously overpriced and monopolistic. Borderline corrupt. It's 2023, technology could have brought these costs drastically down for homebuyers and sellers a decade ago.

• by el_benhameen on 10/3/23, 2:03 AM

  I hadn’t heard about the sexual assault allegations until now. That must explain the barrage of over-the-top realtor ads I’ve been hearing on the radio.

• by chasd00 on 10/3/23, 2:40 AM

  The sexual assault allegation is an interesting touch. They’re probably trying to get a viral social media outrage against NAR going but idk if enough X warriors know or care about NAR to make it a thing though. If Redfin can get it to stick then it will certainly cause NAR some pain so we’ll see.

• by thebiglebrewski on 10/3/23, 4:17 PM

  I don't see many comments here about the alleged sexual harassment of NAR leadership. I, for one, am glad Redfin is calling them out for it and resisting investigation into it! Totally unacceptable behavior from NAR.

• by yalogin on 10/3/23, 3:49 AM

  I like that Redfin is finally being direct and aggressive. This was the promise they entered the market when they did and it took them 10yrs to get here

• by zaps on 10/3/23, 11:23 AM

  “…for two reasons: 1) NAR policies requiring a fee for the buyer’s agent on every listing 2) a pattern of alleged sexual harassment.”

  That escalated quickly.

• by Tempest1981 on 10/3/23, 3:48 PM

  Does leaving NAR reduce Redfin's ability to access/use MLS data? And if so, where, and how significantly?

• by ancorevard on 10/3/23, 3:13 AM

  I truly hope this can start the rebuilding of the real estate industry.

  It is incredibly user hostile.

• by respectthepeace on 10/3/23, 3:00 AM

  Is their plan really to ask NAR to open the listings up? That will never happen...

• by nojvek on 10/3/23, 1:34 PM

  Like Tesla going against dealerships, this is very much needed.

  In general the best markets are have low transaction fees, efficient, trustworthy, maintain minimum quality bar, and many balanced players on both ends.

  In this scenario NAR has created an inefficient market.

  Same with most states having a very hefty permitting processes that takes more than half a year for new construction.

  Not saying we abolish permits, but Americas solution to housing crisis is making the permitting process faster and transparent.

  We can’t call ourselves capitalists when the markets are rigged.

  Gotta let the builders build, the sellers sell and the buyers buy.

• by yieldcrv on 10/3/23, 3:29 AM

  is Redfin big enough for this gamble?

  do they have processes in place to not just become another NAR?

• by mmaunder on 10/3/23, 2:44 AM

  I wonder who will blink first.