Real Estate Is About to Change Forever -- Here's How it Will Affect Zillow, Redfin, and Opendoor 

People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.

Redfin charges 1%. Has for a while. I buy and sell houses in CA, AZ and NM. Understanding the process of buying and selling is no mystery to me. But, for most people it is complicated and a bit mysterious. They need assistance. This may lead to realtor getting a set fee rather than a percentage of the sales price...like everyone else that works in the industry.

I do believe you've hit on something very important here...the public getting a much greater awareness of the actual law of contracts, rather than just listening to what a realtor may be saying to them.

Some larger brokerages in our area are instructing their agents that in obtaining a listing, they simply require a 3% seller commission and a 3% concession fee to be paid by the seller to cover buyer's closing costs and that they refuse the listing if seller refuses to agree, thus keeping the 6% commission in place. Their attorneys tell them this is a way to get around the NAR changes.

Greatly appreciated thank you

If competition creates some overall reduction in buyers agent commissions, Open Door might even expand margins if they can reduce the 2.5% paid now to buyers agents. More business could be driven to their model as the overall human element of guiding a buyer through the process becomes less integral (and expected as the norm) the same way people gravitated away from travel agents years ago. I personally think the value of the buyer's agent is underestimated, in terms of negotiating, especially after inspections if problems arise. But the world is changing.

This is the best video I have seen on this topic, thank you. ❤

Thanks for this, I was wondering what the effects will be

Will you increase your position in Redfin given your analysis it being a net benefit?

Zillow can sell access to their website to buyers via subscription/monthly charge.

If I wanna sell my house why do I need an agent to list on Zillow? Also if I find a house on Zillow, why do I have to call an agent I don’t even know to come and get some money?

What do you think it means for ReMax Matt? Thanks 🖖🏻

Matt - thanks for this valuable update and insight.

please add compass as well!

Opendoor typically charges 5% transaction fee, however 2.5% is a passthrough cost to the buyer's agent. So I don't think it puts pressure on their margins because they don't make anything on that 2.5%.

Matt could you comment on Redfin's balance sheet it shows one billon in debt and goodwill equal to it's market cap. Seems like the stock could have problems going forward from profitability and or write downs?

Nothing will change. If sellers offer 0% to buyer's agents, their house will sit unsold. If you want to sell your home, a minimum 2% buyers agent compensation will be required.

Following you. 👍🏻. It’s always been a massive conflict of interest for the seller to pay the buyers. They need to make it where commissions are never priced off the house sales price. Exactly what is an agent worth an hour? If my doctor is 265/hr, a nurse is 40-70/hr, a teacher is 25-50/hr, a title processor is 20-40/hr what is a realtor worth an hour? Maybe 30-60/hr??? I hope this starts a massive race to the bottom.

You mean I don't have to pay a buyer's agent 10k for 10 hours worth of work?

I'm just glad the numbers are being diaclosed and the public is aware and engaged. Saying a BA was 'free' for decades was wrong.

If you want less service, just pay less. Buyers will need good agents to help get the home of their choice. Many homes have multiple offers…you want the best agent to help get the home you want.

zillow used to make money on selling leads to agents/lenders at $50 to $150 per click, (revenue machine!!!) they they went to the premier model and share commission win success but BUYERS agents arent closing at the rate Zillow wants. a hedge fund about 1-2 months go went hard on the Zillow short. if I was zillow I would go back to selling clicks per lead vs hoping buyers agents close the deal (premier agent) first time buyers get hit the hardest, they cant cover the down payment and fees at these prices now need to pay for buyers fees.. we will see all kinds of new start ups here over the next 6 months

Great recap. Most of the videos I’ve seen about this don’t cover the details very well, more complaining. Thanks.

Thoughts on Redfin stock? Short term vs long term

The buyers agent contract is actually not new - it just wasn’t “required” before. Most agents didn’t use it because they were afraid to scare off potential buyers. Also if Redfin is such a great business model and a fix for the 6% commission issue, why hasn’t it been more popular? Are people truly that daft? For sale by owner has never been easier than it has the past 10 years … so what is everyone whining about?? Why did all the people involved in the settlement not do FSBO? Why didn’t they use a flat rate broker? Why didn’t they sell their house to Zillow’s few years ago? Why do you drive an extra mile to pay less for gas?? lol. There have always been choices and with Zillow owners can’t pretend they need the MLS anymore. If you don’t want to pay someone to do something for you then do it yourself? If you don’t want to pay Saks 5th Avenue prices buy your clothes at Walmart. Or Target. For crying out loud. This is America … there are sooooooo many brokers or options to sell a house. What is REALLY going on?

What a clusterfuck. We do advertising. We support our advertisers. Realtors can advertise 2 free RE listings every 48hrs. We don't use cookies, we don't follow people around the internet! Buyers be safe!

I'm shopping for a new home right now... so say I do everything myself with no agent.. but i want an agent for just for closing. What's that worth? A percentage? A flat fee?

Now someone should target the high closing cost of title policy. It is high to begin with but you have to pay it everytime you have to refinance.

Wouldn't it make sense for a buyer to represent him/herself? And, wouldn't the seller prefer a buyer representing him/herself?

So, let me get this straight. As a seller, I can negotiate with my agent for say 2.5% instead of the current 5-6%. The buyer would then negotiate with his/her agent (if they wanted one) to represent them. As a seller I would no longer have to pay for both, as was the practice before the lawsuit? Thank you.

What we need is a good escrow.

Less agents = virtual tours = Matterport stock going to the moon

Your information about buyers & sellers commission is somewhat inaccurate. There is no set commission structure, it has ALWAYS been negotiable. You can say “on average it’s 6%” but I’ve seen commissions anywhere from 2-7% because it’s negotiable, always has been and always will be. If anyone is unsure of the value of using a realtor, interview at least 3 agents/brokers in your market to find out. Stats show that cooperating agents (buyer & seller agents) sharing commissions nets sellers on average 15% more. As of mid-July, buyers agent commissions can no longer be advertised on an MLS listing. That doesn’t mean it’s going away. It means that commission negotiation will occur between the buyers and sellers with their agents, and communicated outside of the MLS.

This is terrible news. If they can't turn a profit now, any decrease is revenue won't help

👏👏👏👏