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Comment by montgomster | Hacker News Reader

Thanks for your feedback. A lot of your comments line up with the US. We suspect our market is the FSBO. According to NAR, about 10% of the market was for sale by owner(FSBO). If that number is correct, the FSBO market is twice the size of the largest real estate company. So about ten percent of the market here apparently doesn't need an agent. That's about 500k houses. We believe we have a lot to offer a "bare" FSBO. Only time will tell. Thanks for your feedback. It is appreciated.

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> If that number is correct, the FSBO market is twice the size of the largest real estate company.

That's the most apples & oranges thing I've read in a long time

I recently used a real listing agent that I paid a flat fee of $500 to and they got the listing on the MLS given I filled out the forms and provided pictures (hired a photographer for $200). I was fine just having the MLS as the marketing vehicle as buyer's would find it without any marketing at all. It worked and saved 6%-$700 which on this particular property was about $35,000. (Oh I did do my own negotiating as a seller, but they offered to do that for an added flat $ fee that I don't remember)

I think that's the model for this. Don't try to create a FSBO market, try to find a RE agent that does above in every market and create a network of that type of service. Then you can skim a fee off at some point from either the agent, seller, buyer, or anyone else.

How did you avoid paying the 3% (In your example) buyers fee? Did you just refuse to work with any agents? For most people this will not work.

If they're on MLS, they'll be on Zillow.

Buyers these days do a lot of their own searching. If a buyer finds the listing on Zillow via MLS, it won't stop them from viewing the house even if they have an agent.

Once they view the house, the owner could convince them to ditch the agent. I mean honestly, what does the average agent do for a client? Not very much.

This matches my experience as a buyer as well. It won’t get you 100% of the buyers, but it will get you way over 50% and likely over 75%.

If I was working with an agent, I’m sure they’d discourage me from that listing, but as a seller in a reasonable market, I’m willing to give up a few possible buyers to save 5-6% on a 7-figure transaction. (I’ve also seen FSBOs that offer X% to buyer agents.)

I will say that agents did do some work to make the transaction complete on both of my house purchases. Negotiations after the inspection can be tense and a good agent can help both sides get to the closing table.

PropBox would be very happy with buyers at 50 percent of the market. PropBox believes that there are good agents but there are way too many not so good agents. It is hard to distinguish what kind of agent you have until you start working with them.

> way too many not so good agents

This is exactly my experience. In shopping for my first house, I had a clear idea of what I wanted and a budget that matched that and the first four agents I worked with were nearly useless. (This was before web-MLS was a thing.) The fifth was a breath of fresh air and I would happily use them again.

Are you saving 5-6% but selling at 10% less than you could? In some markets bidding wars are common. The extra 25-50% of bidders pushes up the price usually worth more than 5%

sokoloff, on the point about the second negotiation on the inspection. The industry has this backwards. We recommend the per-purchase inspection for several reasons. 1. It takes the liability away from the seller stating what the condition is and moves it to the inspector. 2. by sharing it with the buyer before they make an offer you save them a bit of money, earn some trust as showing transparency, and 3. eliminating the stress of the second negotiation 10 days before closing and no one is available to fix a problem. You are making your home easier to buy. The easier you make it for the buyer, the faster you will sell and the better your price will be. Most buyers want a home in great condition.

Your observation is right on. The industry believes they perform a valuable service. PopBox believes that technology has already changed the playing field. Real estate agents job description, work environment, and compensation will change. Today they work in a 100 year old, inefficient system. PropBox uses technology to do the same work, with the customers help faster, easier and much more efficiently. This standardization and efficient process drives cost way down, and gives the customer what they want, a fast, simple, easy to use tool that puts them in control. Technology allows consumers to access the same information as the agent. This fact devalues the service, but has done little to devalue the price. We are hopeful enough customers recognize this and will save significant money with 10 to 12 hours of their time. If our test market hours of work hold up as we grow, our customers will save two thousand to six thousand dollars per hour. The customers success is our success.

PropBox is not a real estate company. PropBox is a tech enabled platform that sells an ad to home sellers. It is a uniquely designed ad that offers options, not advice, to home sellers and buyers. We believe consumers of real estate are smart and when they have the options in front of them can chose which one is best.

It appears as if PropBox has no users/listings.

Hello, Conductr. We now have one in Denver, and one waiting for a photographer on Seattle. The Seattle person is in this thread. He has a two million dollar home. If he is right, and the home sells, he will save $100K. Several more assking questions. We didn't expect to have any for a month or two. It will ramp up, slowly at first, tben begin to accelerate and scale. Hopefully. Doing a few things behind the scenes to throw a little gas on the fire.

> Once they view the house, the owner could convince them to ditch the agent. I mean honestly, what does the average agent do for a client? Not very much.

Most Buyer Agency agreements operate on the basis of "if we show a house to you, and you buy it, we are owed a commission regardless of if you terminate the agreement afterwards". Now, typically a real estate agent isn't about to sue their clients if they purchase FSBO, since that would mean suing them for a 2.5 or 3% commission the seller wasn't even offering to the buyer agent, but it does mean that you can't get agent 1 to show a house, then switch to another agent, without agent 1 getting paid.

Even if someone was driving by and pulled in the driveway and saw the house without the agent present?

Do buyer agent agreements require you buy a house through them even if you find the house and view the house and negotiate the price with the seller yourself?

(I’ve never relied on an agent for these things, I did everything myself when buying my first/only house)

Some have exclusivity agreements that require that, but they're pretty unpopular (because it's also intimidating for a buyer to sign). What I described is a non-exclusive showing agreements, where they only get compensation if they helped in showing the house or completing the transaction (like drafting the contracts).

In my state if you sign a buyer agency agreement, describe the property you are looking for and it is dated. You are obligated to pay in most situations. If you can prove abandonment you can likely get off the hook. Every state has their own laws and rules so be certain know what those laws and rules are. Also read the contract carefully. In my state there is a clause that if the listing broker doesn't pay the buyer agent, or doesn't pay enough to satisfy your fee, you are obligated to pay. I never liked that sentence. Thanks for your questions

When I began selling real estate in 1966 the legal theory in place was "Caveat Emptor" or let the buyer beware. There were many complaints and over the years the theory drifted to "Caveat Venditor" or let the seller beware. Most states have gone this route but I believe there are one or two states doing let the buyer beware.I cannot find information that quantifies the actual number of complaints, but my experience is that the complaints are about the same. This suggests that neither theory works in practice. I wrote about this[1] several years ago. The article gives you a common sense take on agency [1]https://dearmonty.com/is-your-buyer-agent-legitimate/

Excellent question. PropBox is not a real estate company. It is a technically advanced media/advertising company that is specializing in advertising homes. The seller purchases an ad for a dedicated web page that benefits the seller and the buyer. They are in control, they make all the decisions, and they do all the work. A buyer can pay a buyer agent, a seller can choose to go a different route. We are not listing homes. We believe many home buyers and sellers are looking for an alternative to the the two choices that were available until we launched yesterday. Now there is a third choice, PropBox. A platform that provides both parties the same information and allows them to work directly together. We believe some customers will like the ease of use, the ability to speak with the seller who knows more about the house than any agent, and much more. Both parties will like the ability to better control and easily communicate with each other within the platform. PropBox is not avoiding the 3%, the customer is avoiding the 3%. I hope this answers your question. Thank you for asking.

Your marketing copy should communicate this.

>PropBox is not a real estate company. It is a technically advanced media/advertising company that is specializing in advertising homes. The seller purchases an ad for a dedicated web page that benefits the seller and the buyer.

1) What PropBox is in simple terms the customer would use.

2) How it works (from the customer perspective).

Wow. This is very helpful. Thank you.

Glad I could help! Good luck on your journey.

Thank you.

there's not any listings in my area, southern Utah. Have you thought of maybe using MLS so buyers can at least see all available options in their area. Then flag as premium/featured homes that are listed without an agent or FSBO?

If I go to your website today and see no homes, I'm probably not coming back even if you add 1000 in my area tomorrow. How would I even know?

Using existing data and listings as an aggregate with a special built in marketplace IMHO would provide more value to all parties.

Excellent question: How would I ever know? If you never came to the platform there are still ways you may know. In our tiny test market(tiny is 4 sales), all four buyers came from our unique yard sign. All four sellers came from word of mouth. If 1000 properties in your are listed, that suggests 50 will sell in a year. How many would use a PropBox ad is unknown, but you may see a yard sign. I understand you logic and believe some will not come back. But lets see what it looks like in six months.

Where I am at least, the 3% x2 commissions are just a customary commission share. Technically the listing agent charges whatever they want and shares whatever they want. Usually they charge 6% and share half. But there no obligation to offer buyers commission on the MLS listing. I put 0%. I felt like being on the MLS would sort this out, most shoppers would see the listing regardless and their agent can decide what to do at that point (I'd bet they'd show it if the buyer was interested)

Thank you for your thorough explanation on your experience. While I appreciate your sharing I come from a different perspective in that you were the customer and I was the service provider. I recently wrote a column that explains my role and a major consideration as to why I have undertaken this project.[1] Please check it out from an insiders perspective. It is always helpful. A mentor once told me "First seek to understand, then be understood."[1]https://dearmonty.com/selling-and-buying-a-home-today-is-eas...

On the flip side I purchased my last home with a lawyer who's also a real estate agent. They only represent the buyer and provide all services for a flat fee that's tiered on the home price. It doesn't fix the Realtor problem with insane fees and idiotic sales tactics. But it allowed me to buy my home with far less out-of-pocket and at the end they handed me a 5-figure check as a rebate. This would have been his insane commission for doing very little. I don't understand how people still are just giving their money away to "Realtors" who, ultimately, unlock doors. The majority can't actually read or understand a contract (I sued Redfin because a Realtor working for them lost my earnest money when they failed to understand something as simple as a date), very few of them actually know anything about a home or what to look for and finally, these days, most buyers do 90%+ of the work to find the home they want. Do most people use travel agents anymore? Why use a Realtor?

> Why use a Realtor?

Just to inquire, do you mean Realtor® or just a salesperson/agent? Any salesperson/agent can get their license by taking a short training course, and can then subscribe to lead websites like Zillow etc. But becoming a Realtor is at least a bit more commitment to knowing how real estate actually works and advising your client on good decisions, in addition to being bound by the Realtor code of ethics. https://www.nar.realtor/about-nar/when-is-a-real-estate-agen...

I'm sorry but the Realtor code of ethics is BS. I've read what Realtors are bound by and I've found those folks doing shady things. Like a common practice is for a Realtor to not mark a property as pending before it goes contingent. This allows the Realtor to pretend to potential clients that the property is still for sale and can drag it out in case something like an inspection causes the pending buyers to back out. I found one Realtor in my area that never issued a Pending update to any of his properties and submitted it to the Realtors Association as abuse. In their own language an agent has to update the status within, last I checked, 48 hours. They completely ignored me. When I brought up sharing this with local news outlets as a common, and shady, practice they said they would "look into it". They never responded beyond that. Being a Realtor doesn't mean you know anything about legal contracts or are able to inspect a home properly. It's a self serving organization that's sole focus is on revenue. Not the buyer and not the seller. There's very little, if any good that organization brings to market - that is unless you're a fan of monopolistic organizations that will do anything to keep out competition.

Your comments and your experience are one of the reasons we do not use multiple listing services. The other reason is that they are very inefficient and time consuming. The methods and operations originated over one hundred years ago. I have written a column [1]that better explains how agents work. It is a generalization as not all agents work like this. The real estate organizations are trade organizations. Their members are agents. They protect the folks that are paying good money to be members. [1}https://dearmonty.com/is-your-buyer-agent-legitimate/

I really hope you disrupt the industry. Even if, as you say, your target market is mostly FSBO. Taking anything away from the Realtor organization is only making things better. Good luck!

Thank you for your comment. We are not trying to disrupt necessarily. We are offer a third choice. Until yesterday's launch you had two choices: For-sale-by-owner (FSBO) or some type of real estate agent. We believe either choice has numerous pain points or friction. Now PropBox is the alternate third choice. It is designed to eliminate all the pain points. It is accurate, fast, efficient, and cheap. PropBox is a Tech Advertising Company not a real estate company. We use technology , standardization, and simplicity built into our Service As A Software (SaaS)product. Many don't pay enough attention to their largest single investment so they will be the last to realize and adapt. In my opinion that will take years.

Also, in the US, if you are the buyer, "your" Realtor is typically being paid by the seller, so it's hard to say who their customer is. After I found the listing for my current house, I had to practically force my Realtor to find out about it. I later found out from the seller's Realtor (for the whole development) that they were forcing lower commissions on the buyer's Realtor, so a lot of Realtors were not showing their customers the house.

there is an existing organization many people are unaware of; The National Association of Exclusive Buyer Agents [1]. In my opinion, this is because they gave up the listing commissions in favor of the buyer. They cannot work in a real estate office that takes listings. It appears to me that these folks are the closest thing to perfection for a buyer. Their stance is the conflict of interests in representing both side is not acceptable. There problem is very few agents have that dedication, so they are hard to find. If I were buying a home and didn't know about PropBox an exclusive buyer agent would be my choice. [1]https://naeba.org/

You also need to pass a test (and find a broker to oversee your license) to become a real estate salesperson.

Correct. Thanks for pitching in.

Many real estate salesperson agents who are not brokers can become Realtors. The broker license requires more hours of study and some states require a salesperson to complete a certain number of hours or transaction before they can become a broker. All salespersons must hang their license with a broker so there are no salespersons wandering around if they are practicing. If they are between brokers or inactive they may not need a broker in some state. According to ARELLO [1] there are over 3 million real estate brokers and salespersons in the US. About half are Realtors. I hope this information helps.[1] https://www.arello.org/

You won't get any argument from me. PropBox completely replaces the need for real estate agents and MLS listings. PropBox enables you to sell your home fast with no fees - on a secure platform with a very easy process. It takes about 10-12 hours of your time and the seller saves based on home value $25K to $75K. One point you mentioned is there is an association called the National Association of Exclusive Buyer Agents.[1] They operate similar to your lawyer. What I like about them is that they cannot work in a traditional real estate office that takes listings. That is where the term a"exclusive" has meaning. They only represent buyers so they shun the listing commissions to remove any potential conflict of interest. This is why there are not very many of them. What this suggests to me is that they are of high moral character and their advice can be trusted. The downside is you may not be able to find one near you. If I were buying a home I would definitely interview one. Another tactic I have observed is the number of home buyer that believed they used a buyer agent but did not sign a contract. In my state and I believe many others, this means you were actually working with a sub-agent of the seller, or a transactional agent. Thank you for your input. [1]https://naeba.org/

> PropBox completely replaces the need for real estate agents and MLS listings.

Disclaimer: I worked for a real estate brokerage (as a software developer) for about 8 years, did a real estate based startup in the mid 2000s, and have transacted using real estate agents as well. It has been years since I was deep in the real estate business, but it does leave scars.

It is possible that PropBox displaces real estate agents. From what I've seen, there are plenty of crappy agents. Good riddance, get rid of them.

Good agents don't just open doors, they:

* know the local market and help you price a property correctly. Say it with me, 'real estate is not fungible'.

* are known in the market and can help find buyers (when it's a buyer's market and sellers are struggling)

* can connect you with trusted people who can help you assess and market the property, including inspectors, engineers, stagers, landscapers, etc

* understand how to get a transaction (with all the moving pieces) done. Especially in a difficult market, this can be the difference between selling a home or not, or getting a good price or not, or selling it in a reasonable timeframe or not.

Is that worth $35k (or 3% of <home price>)? Depends on what your time is worth and their incremental value, esp in terms of pricing and marketing. What is selling a house one week faster worth? It depends on your situation, stress level, etc. As others in other threads have mentioned, there are definitely other paths if you want to do more work yourself.

What drives me nuts about the $35k or other high figure mentioned by people when talking about real estate agents for "just opening doors". No one ever mentions the meetings with people who will never buy, the people you've been providing real estate advice for 5 years, or the lookie-loos who see 50 properties to and then decide "the time isn't right". This is opportunity cost that the real estate agent eats regularly. I don't know if 3% commission is the right number (I suspect it is high, based on how other countries do real estate buying) but that time isn't free.

I've also known that several real estate brokerages have tried to do things similar to the NAEBA (Redfin started out with realtors on salary) but that led to a lemons problem since great realtors who could help with the above migrated to brokerages where they could make more money.

Brokers have existed for high value, relatively rare transactions for many years because the stakes are high. I found this book very illuminating on the value of middleman like real estate agents: https://link.springer.com/book/10.1007/978-1-137-53020-2

It is simply not possible that PropBox displaces the MLS until there is a critical mass of listings on the site. Zillow took years and years to get there (maybe a decade) and they had the benefit of all the public sector data and a sexy Zestimate. I'm not sure that PropBox has that kind of pull.

And it's actually *MLSes*. They each are pretty peculiar fiefdoms that many people have tried to storm, only to be co-opted, because they control the listing data, and the access to the listing data is really the only thing that matters. (Well, maybe access to mortgages too.)

Anyway, there's tons of money flowing through real estate, so maybe I'm totally wrong and you'll revolutionize it and make a fortune. Good luck!

Interesting to read your take as working in a real office as a developer. You spent a considerable amount of time and thanks so much for your viewpoint. Your viewpoint is fairly common in the industry. I do believe PropBox completely replaces the need for real estate agents and MLS listings. Replacing the MLS is not the DropBox goal. The goal is to focus on early adapters, technical people, and for-sale-by-owners. There are enough of them build a profitable business and we believe we can do it. I have witnessed many companies fail trying to conquer the industry. My perspective is that not one of them had a product as simple and powerful as PropBox. While I realize the chance of failure is high, we are willing and able to take that chance. No one we are aware of has ever created a total online experience until now. Only time will tell. Thanks again.

What are those 10-12 hours?

Is there any way to get that time from 10-12 hours down to say 0-1 hour... while still maintaining the bulk of the savings?

If so, that might be a good value add.

Interesting thought. The breakdown of those hours suggests they are mostly small none repeating tasks. Like, how long does it take to unbox the yard sign and stick it in the ground. It may take less time now that it is fully automated. We will be constantly looking for ways to make it easier for our customers. Thanks for your question

Thank you for your feedback. There are many people that have a different opinion. WE can start with the 500k fsbos in 2022. But there are other folks like the college investor[1] that has done some research and wrote about it on a blog. You may be right. To the best of our knowledge no one has built a product like PropBox to tackle it. Lots of startups fail for a variety of reasons and we are aware that it is way to early to know if we will be a victor or a victim. Only time will tell.[1]https://thecollegeinvestor.com/9084/real-estate-agents-anymo...

Twice the size of the largest RE doesn’t mean much when 90% of the market is RE. People pick realtors, not companies, and companies have done pretty well to spread themselves evenly over the great US landscape. And you’re not primed to capture a market that is focused on spending $0 to list. That’s the reason they’re avoiding the real estate pipeline in the first place.

I see your point, but it is not universal. There are a number of reasons sellers choose FSBO. I have spoken with thousands of FSBO as an agent and as DearMonty on my website. Here are a few other reasons: 1. significant inside real estate knowledge who know how the system works. Examples are contractors, attorneys, title company workers, and there are more. 2. Poor experiences with agents. 3.A need to be in control. 4. They recognize the significant asymmetry and conflict of interest of the agent. Yes, there are bottom feeders and they need us more, but they may be harder to convince. Time will tell. I appreciate your feedback/

Pricing says $1 per listing for the first 100, then $995. If you’re targeting the FSBO market, doesn’t that mean you won’t be making any money most of the time? Am I missing something? Maybe the $1 per listing is temporary to kickstart it?

> $1 per listing is temporary to kickstart it?

It's $1 for the first 100 people who sell a home on the platform, then full price after that.

Oh, I'm too used to SaaS pricing schemes to think that way...

Ha! If I get your drift, we don't ever want to be seen as scheming. Transparency is paramount to building a trusting relationship with our customers. We will be very careful to avoid any hint of scheming. Thanks for your comment.

Sorry, I wasn’t talking about scheming, I just thought it’s the standard free/discounted for the first X units you use (pricing strategy), and didn’t realize it’s meant to be site wide.

Although it reads as though it's $1 ea for your first 100 homes you sell, then $995 after that.

And actually, probably need to make it $1/home for the first 1000 or so just to get the site to critical mass. Not going to get many buyers for 2 listings...

We believe 100 customer at $1 is very generous. When the seller has a number of benefits besides saving significant money, when they see how well this works for others the $995 is peanuts when your saving $50k. Time will tell. Thanks for your feedback. I hope you are not right!

Davewasthere. In our tiny test market the yard sign produced all 4 buyers. The sellers all came from word of mouth. We think the 100 will be enough for people to see it works. 1000 is closer than 100 but may not be close to critical mass. We have a long runway and we are patient. as long as we see it growing and accelerating we will get there.

We won't decide on the price change until after we hit 100. 101 could be full price, but it may lower. It is also unknown how long it will take to hit 100. good question, thank you.

You are correct the low price is the kickstart it. The first 100 customers are beta customers. It is one dollar. They will help us iterate, they will help us get the inventory started much faster. We are frugal and we think it is smarter to benefit our customers than an advertising agency. Time will tell if it is a good decision. Good observation and thanks for sharing it.

We actually have this website in Australia it’s been around for a while:

https://www.forsalebyowner.com.au/

This is the most cliched startup pitch in the world. “There is a $HugeMarket if we only captured $ASmallPercentage we will be successful”.

I was guilty of it too as one of the tech leads when the company I was working for was working to get acquired.

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