[HN Gopher] Launch HN: Modern Realty (YC S24) - AI Real Estate A...
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Launch HN: Modern Realty (YC S24) - AI Real Estate Agent for Home
Buyers
Hey HN! We're Raymond Xu and Raffi Isanians, the team behind Modern
Realty (https://modernrealty.io). Modern Realty is an AI-powered
real estate buying experience that helps you purchase homes without
relying on a traditional realtor. Demo:
https://youtu.be/VhsWSVn5blA Our mission at Modern Realty is to
make home buying easier, faster, and far more enjoyable. We
interpret real estate data, giving you an edge on other home
buyers. Since 2024, there has been a growing need for innovative
solutions in real estate, especially with tools like Zillow making
it easier than ever for buyers to find the right house at the right
price. However, the process still requires an agent, even though
buyers are doing most of the work themselves. Modern Realty changes
this by offering an AI self-service solution. Raymond and Raffi
came face-to-face with this technology's potential while working on
AI at Google and handling billion-dollar asset transactions as an
attorney, respectively. The AI tools we've built guide users
through every step of the home-buying process, from scheduling
showings to making offers, all without the need for a traditional
agent. Before we expand further, this summer we've built our core
AI real estate agent, which can handle everything from disclosure
summaries to competitive market analyses. You can see our platform
in action at https://modernrealty.io. We're particularly proud of
our offer generation tool, which creates offers that are then
reviewed by an attorney at no additional cost. We're excited to be
launching here on HN and would love to hear what you think! If
you're in the market for a new home or just curious about the
future of real estate, visit our website or schedule a call with us
to get started.
Author : greenfish6
Score : 95 points
Date : 2024-09-24 16:23 UTC (6 hours ago)
| soperj wrote:
| Can you use the word realtor? I thought it was copywrite
| protected?
| Veuxdo wrote:
| Trademark, but yeah, that was my understanding as well.
| greenfish6 wrote:
| Our agents have real estate licenses and we are registered
| with a real estate brokerage.
| pxx wrote:
| lol. it's not too late to delete this. the fact that you
| don't have the fundamentals together does not inspire any
| confidence.
| BubbleRings wrote:
| I don't understand, what about this says they don't have
| their fundamentals together?
| somehnguy wrote:
| Realtor is a trademarked term for members of the National
| Association of Realtors. You essentially can't use the
| term Realtor to describe anything you're doing unless
| you're a member. They do actively enforce this with
| lawyers. Google: "realtor vs real estate agent"
| cdblades wrote:
| Does your product produce any work that isn't examined and
| approved by one of those licensed agents?
| themanmaran wrote:
| Who is your target market? I've certainly always wanted a product
| that lets me cut the realtor out of the loop. When I bought my
| house, it seemed if anything the realtor just got in the way. I
| had picked out the house on Zillow, and really just needed to see
| it once and put in an offer.
|
| Then of course the realtor wants you to look at houses they
| represent (as a comp), and also introduce you to their
| inspector/mortgage/lawyer friends. It seems like the incentives
| just aren't aligned at all.
|
| I imagine a lot of people in the tech scene feel the same. i.e.
| would love a "buy now" button that skips all the people steps.
| But I wonder how much that sentiment is shared by the broader
| real estate market.
| greenfish6 wrote:
| The target market is the personality of buyer who wants to do
| self service. Someone who finds houses on Zillow and just gets
| a realtor at the end.
|
| Realtors are paid on commission which means that they want to
| transact high and immediately. Poor alignment with intent for
| buyers.
|
| We have an offer drafting service on our website where all you
| need to provide is your email, phone, property, and price and
| we can go from there.
| DowagerDave wrote:
| >> Realtors are paid on commission which means that they want
| to transact high and immediately
|
| This is either naive or disingenuous. Do the math; realtors
| want to close fast but don't really care about the price the
| way the buyers and sellers do. The commission difference on a
| significant gap is not worth losing the deal.
| thinkmorebetter wrote:
| Also, a huge percentage of deal volume comes from
| referrals. Successful realtors don't become so without
| thinking long-term.
| greenfish6 wrote:
| Realtors still spend the majority of their time working
| on marketing themselves as opposed to servicing clients.
| "Referrals" is disingenuous because realtors spend so
| much time reminding clients of themselves - would this
| referral have occurred without that?
| thinkmorebetter wrote:
| This seems like a strangely cynical or naive perspective
| that just reinforces the anti-realtor messaging you think
| is injected by commenters. >50% of buyer agents are
| engaged through either referrals or repeat business. Are
| you not intending to use referrals as a customer
| acquisition channel?
| greenfish6 wrote:
| The math is that if the buyer Realtor convinces their buyer
| to bid a higher $, then they increase the probability that
| the buyer will get their bid accepted quickly.
|
| My own realtor convinced me to bid a price that the seller
| accepted in 30 minutes for my home - immediately == high.
| rpearl wrote:
| Agents are there for the edge cases. We had a contract dispute
| that required negotiations and even a brief discussion with a
| lawyer. At one point, our agent was calling title companies in
| the area to find the _other_ escrow account.
|
| How are you planning on handling cases that abruptly require
| complexity? At first glance, it looks like using a service like
| what you are describing would have been an unmitigated disaster
| and would have cost us a ton of money, and we wouldn't have known
| that at the start of the process either.
| greenfish6 wrote:
| Raffi, my cofounder, is an attorney himself along with having a
| Realtor license.
|
| Most Realtors are not attorneys. You said you needed to talk to
| an attorney but what if your realtor.... was an attorney?
|
| So we have more ability to handle edge cases, not less!
| mattw2121 wrote:
| Raffi doesn't scale. Are you going to hire more Raffis?
| Raffi_Isanians wrote:
| There is only one Raffi.
|
| -Raffi
|
| Edit: AI is currently being coded up to mimic my
| behavior/tone/advice/etc.
| cdblades wrote:
| > Edit: AI is currently being coded up to mimic my
| behavior/tone/advice/etc.
|
| You, as a licensed attorney, are training an LLM to give
| your clients legal advice?
| hansonkd wrote:
| > AI is currently being coded up
|
| Said every failed half baked AI startup the past year.
| Show the results when done. Saying that you are working
| on AI is barely a step beyond saying you have a concept
| of a plan.
| rpearl wrote:
| I mean the premise of your product appears to be that I'd be
| interacting with an AI. If I were to use it, I would not be
| hiring Raffi---would I?
|
| I was in a situation where the seller of the house, after
| signing our contract, halfway through closing, decided to try
| to accept another offer that would close faster. The seller
| attempted to get out of our contract when we wanted to
| enforce it and close.
|
| An AI wouldn't be calling escrow companies for us. An AI may
| have a recommendation about whether lis pendens is necessary
| but it wouldn't be personally taking it to the courthouse
| before close of day on a Friday. An AI would not be able to
| watch the property in case the other buyers showed up.
|
| Obviously with a smooth transaction none of this is
| necessary. Most transactions are smooth, and that's great.
| But ALL the value of a real estate agent is in the edge
| cases. I'm asking what would happen to me if I would've used
| a tool like this instead? When abruptly this sort of work
| becomes necessary but I've never spoken to a person. In such
| a time, I don't just want advice, I want an actual agent to
| help me make a real decision, quickly, and then act on my
| behalf.
|
| Is that Raffi? How many people is Raffi helping? Is this just
| Raffi's fancy tech driven real estate office that will be
| slightly larger than the usual due to leveraging tech?
| greenfish6 wrote:
| The vast majority of agents communication is over text and
| email. It is quite rare that it is required that a realtor
| must make an in person appearance somewhere, usually that's
| just for first meetings.
|
| But yes, when stuff like this happens, we'll have a person
| do the required representation.
|
| Put it like this: if 90% of realtor time is spent on
| communication that is done over text an email, then each
| realtor will be able to serve 10x the clients. But that
| still leaves time for them to show up at a courthouse on a
| Friday, as you mention
| in_cahoots wrote:
| How many residential houses have you personally bought or
| served as a realtor for? In my experience everything
| other than rote paperwork and sending over information is
| done via chat or in person. No realtor is going to walk a
| first-time buyer through an inspection report via text
| message or email.
| DGAP wrote:
| What's the pricing? Do you take the entire 3% commission? If so,
| ouch, and do you anticipate this will be affected by the recent
| anti trust cases?
|
| Is your use of AI just chatgpt API calls? How quickly could you
| scale given there's still humans in the loop? What are the
| blockers to getting humans out of the loop?
|
| Have you used your MVP to close any real sales?
| greenfish6 wrote:
| Our pricing is negotiable. What we're seeing so far is that
| >95% of homes are still offering full 2.4% buyer agent
| concessions in the bay area.
|
| Our main service is our texting service which you would text as
| if it was a normal realtor and it can get you market
| comparisons, schedule tours by texting agents, asking about if
| there's offers on homes, etc.
|
| Blockers for getting humans out of the loop is primarily just
| user trust. It's quite simple to pull APIs that get specific
| data and text people and fill forms, but real estate agents
| have a very high CAC problem, due to this trust issue and
| competition.
|
| MVP has completed 1 escrow via text bot, we got paid 27k,
| another home went into escrow yesterday, 35 clients touring
| homes with us. We registered with our real estate brokerage in
| July.
| throwup238 wrote:
| _> MVP has completed 1 escrow via text bot, we got paid 27k,
| another home went into escrow yesterday, 35 clients touring
| homes with us. We registered with our real estate brokerage
| in July._
|
| That's amazing traction! Congratulations!
|
| How much manual intervention did these first couple of sales
| take? Are you using your own local/hosted model and fine
| tuning or otherwise incrementally improving it?
| greenfish6 wrote:
| Disclosures analysis and text-to-tour scheduling were first
| to be automated, and those were available for our first
| close. We now have market analysis, offer drafting, full AI
| texting, etc.
| cdblades wrote:
| That seems like very high-risk work. How do you manage
| that liability?
| mangowise wrote:
| For the escrow transaction, were you the buyer or sellers
| agent?
| cdblades wrote:
| > Blockers for getting humans out of the loop
|
| Do you think that people _want_ humans out of the loop when
| it comes to buying and selling real estate?
| alumic wrote:
| OP, I would replace or rework the icons on your landing page. The
| stroke width varies as does its color which undermines the rest
| of the design. Apart from that, nice job!
| greenfish6 wrote:
| noted, thanks
| the_gorilla wrote:
| I'll try anything to get rid of realtors. They're the worst form
| of rent seekers, and it requires no real skill or training other
| than a certificate that I could purchase with a highschool
| diploma, taking one class, and passing a multiple choice exam.
| greenfish6 wrote:
| Yes! rm the middleman
| bigstrat2003 wrote:
| My realtor was invaluable when I bought a house. He had a lot
| of valuable guidance on what to look for and what to avoid, as
| well as advice on how to make our offer stand out in a seller's
| market. I'm not saying that there aren't realtors who are just
| parasites, but some _do_ earn their pay. Mine was one such.
| greenfish6 wrote:
| Prior to the Aug 17 settlement, Keller Williams said ~65% of
| home buyers in the US used the first buyer agent that they
| met.
|
| The quality bar is very low to become a realtor (3 months of
| online coursework).
|
| Realtor reviews are cooked and completely fake online.
|
| So it is not a big jump to say that the average realtor
| experience is poor as they are usually driven by a single
| advertisement or a single Zillow link for most people.
|
| We try to mimic the behavior of the best performing top 1% of
| realtors and give that experience to all.
| Raffi_Isanians wrote:
| Some are valuable, some do a good job at making themselves
| seem valuable to you. Our goal is to take what the valuable
| agents do and make it even better. There are so many places
| where an agent can add value (search, credits, getting you
| the best interest rate, doing all the research for you,
| etc.).
| the_gorilla wrote:
| My realtor was worthless. I picked the house, picked the
| inspector, and then just had to find a realtor in the area
| who wouldn't bumblefuck it up too badly. He still managed to
| somehow cost a lot of extra money by moving extremely slowly.
| I don't need or want a realtor but the system is set up to
| ensure they continue to exist regardless of if they have any
| value.
|
| The issue is that we don't really have a choice in the
| matter. In a properly functioning market, you could still
| have your realtor if you wanted, and I could pretend they
| don't exist instead of having to help support their
| lifestyle.
| greenfish6 wrote:
| Once we can do buy and sell side then we can be the full
| marketplace and cut out the realtors
| complianceowl wrote:
| The biggest contribution my realtor made was good negotiation,
| but even that cannot be confirmed. Why? Because I never spoke
| to the sellers directly. For all I know, I was their only offer
| and they were just holding off to see if anything else would
| come through.
|
| When I sell my current home, the realtor commission would be
| around $20,000. That's $20,000 cash equity that is taken out of
| my hands. When I did this simple calculation, that's when
| beyond the shadow of a doubt, I knew I would not be using a
| relator -- I don't care how much of a headache it could be. I'm
| keepin' that $20K.
| bityard wrote:
| What's your plan for selling? Are you going to have a lawyer
| handle the legal aspects instead?
| complianceowl wrote:
| Definitely. I am going to hire an attorney ($650), property
| inspector ($500), and title company ($1,200), and that is
| about it.
|
| I've purchased two homes and I'm confident I can handle the
| paper work involved. I mean, most of the paper work is the
| attorney's and title company's anyway. The realtor is
| basically inserting himself in between those companies and
| then relaying that information to the client. In my case,
| my realtor was copied on all communications, but that is
| it. I was the one producing all the documentation, signing
| agreements, reading reports, following up on inspections,
| etc.
|
| And I had one of the top Keller Williams agents in my
| state. The guy is known by everyone.
|
| I can't make sense of paying someone $20,000 to say, "Let
| me know if you have any questions about the inspection
| report"; or to tell me, "I wouldn't buy this. There's
| moisture in the basement. There's a leak in the ceiling.
| The patio is not level." etc. I'm knowledgeable enough to
| see things like this, and if not, my inspector will educate
| me on it and identify issues.
| Raffi_Isanians wrote:
| Reach out to us when you sell. Can automate some of the
| communications/backend work.
| the_gorilla wrote:
| I've heard people say realtors can point out issues like
| a leak in the ceiling, like you mentioned, but they're
| not inspectors and the good ones are quick to admit that
| they're just offering their untrained opinion. That's
| good, but I don't know if it's worth $10,000 when for
| $400 a bonded inspector will look at everything, crawl
| around in the spider zone, take pictures, and give me
| specific advice.
| Raffi_Isanians wrote:
| This is one of the main reasons we started this company:
| transparency. With our service, you'll soon be able to see
| all communications and texts with the seller and listing
| agent.
|
| I've been in your shoes (before I got my license). I always
| had doubts about what my agent was actually saying on my
| behalf, and what they were telling me about the seller's
| position. It often felt like the listing agent would
| magically respond only after I followed up. That's why we're
| committed to giving you direct insight into the negotiation
| process, so you're not left guessing about what's really
| happening behind the scenes.
| hash872 wrote:
| >the realtor commission would be around $20,000. That's
| $20,000 cash equity that is taken out of my hands
|
| Not to defend the current real estate industry too much, but
| if the sellers were not paying $20k for a buyer's agent, the
| price of the home would likely just be $20k higher. That's an
| extra $20k that the sellers would get to keep. If they kept
| the price the same with or without an agent, that would seem
| to be some pretty irrational behavior. They'd be giving up
| $20,000 for no reason!
|
| A rational seller is selling for as much as the market will
| bear, and are only paying transaction costs that they
| absolutely have to. Again not defending the current system at
| all- the sellers are the ones who who are paying too much in
| this case
| linsomniac wrote:
| >I'm keepin' that $20K.
|
| Just curious, how are you going to advertise your property to
| real estate agents and consumers in your area?
| bityard wrote:
| Are you speaking from experience in the real estate industry?
|
| I'll agree that RE agents ("Realtor" is a trademarked term) are
| essentially unnecessary for the happy path when a property sale
| goes smoothly. In that case, they are overpaid secretaries.
|
| But the reason RE agents are their own profession is because
| when a sale starts to wander off the happy path, there can
| suddenly be a LOT to know, discuss, and do. A good RE agent
| will be honest with you if the asking price is ridiculous in
| either direction. They know all the little local details and
| laws that are easy for a layperson to miss. They'll help you
| deal with a difficult buyer/seller. They know where the flood
| plains are. They know about zoning. They know who to call when
| the weirdest shit pops up. There are few other areas in life
| where ignoring (or not seeing) non-obvious red flags can ruin a
| person or family so completely.
|
| I have had bad RE agents that were uncooperative paper-pushers
| who kept dropping the ball, and I have had good RE agents that
| were worth every single penny they earned.
|
| If you want to be mad at something, I suggest looking into the
| National Association of Realtors. It is essentially the union
| that all RE agents are a part of, whether they want to be or
| not. NAR essentially owns the bulk of property listings in the
| US and heavily gatekeep access to it.
| greenfish6 wrote:
| Yes, if every deal went according to plan, you could just use
| half an hour of attorney time.
|
| For our value add compared to the regular realtor when things
| go wrong. Our thesis is that because 65% of home buyers use
| the first realtor they meet, most individuals are getting
| this "uncooperative paper-pusher who keeps dropping the
| ball". We can outcompete this average realtor on the quality
| front.
|
| Our end-game plan is to own our own MLS.
| the_gorilla wrote:
| Thanks for the reminder, I did get surprised by several local
| laws _despite_ having a realtor familiar with the area. I
| speak from experience as a buyer who did all the work and
| indirectly paid a parasite a lot of money to cost me even
| more money. I need to emphasis that the issue is that I don
| 't have a choice in the matter. In cases where I don't need
| them, it doesn't matter if they're good or not, they're
| purely parasitic.
|
| I don't want them. They've inserted themselves in the process
| against my will.
| rootsudo wrote:
| I had this idea, it's cool someone ran with it. I can see how
| "AI" can work the deal.
|
| Really should review submitting to ycombinator in the future :)
| always feel my ideas aren't good to pursue.
| ned_at_codomain wrote:
| Speaking as a YC-backed startup founder myself, you should have
| more confidence in your ideas! But not for the reasons you
| might think.
|
| It's not that your ideas are good or bad. Most of us have
| mostly bad ideas. Some of us sometimes have good ideas. But
| there's really no way to tell if your idea is good or bad until
| you try. No amount of intellectualizing will give you a
| trustworthy answer.
|
| We started our business with what _seemed_ (to me and my smart
| friends) like a great idea. It made tons of sense. I had this
| whole 48-phase plan for how we 'd conquer the world. And then
| ... it turned out that people didn't really want the thing. The
| idea was actually bad.
|
| By contrast, the business we're working on now has started to
| work pretty well. I have to admit, the business didn't make
| much sense to me at first. I could conjure a million reasons
| we'd struggle to compete. And then ... when we went to market,
| the thing started to work. Still early days, but there are lots
| of positive indications.
|
| My biggest lesson in the last year-and-a-half has been that I
| just don't know that much :)
| keeptrying wrote:
| Great name for your startup btw. :) Didn't even need to click
| on it to know what it does.
| greenfish6 wrote:
| I would also strongly recommend talking to customers and
| building out your idea ASAP as a mandatory first step to
| determining if it's a "good idea". the YC mantra :)
| pj_mukh wrote:
| So amazing! Strongly considering using this for my next purchase.
| Two quick questions:
|
| a) How do offer + contingencies work (contingent on financing,
| home inspection etc.), will a human immediately have to get
| involved when any contingencies are involved?
|
| b) Your service will text the sellers agent, and get me the
| lockbox number so I can tour a property myself without having to
| schedule with a buyers agent? Just that service alone would be
| amazing
| greenfish6 wrote:
| a) When you draft an offer, the contingencies are fairly
| standard w/r/t mortgage, inspection, title, insurance, etc.
| Realtors use standard language here to cover these on the offer
| form, we use the California Association of Realtors Residential
| Purchase Agreement form, which is the standard offer form.
|
| b) Yes. Technically, a licensed agent has to open the door, but
| ours will stand outside.
| runako wrote:
| First -- congratulations on your launch!
|
| I'm curious about b). If you are sending a licensed agent to
| the property, wouldn't the typical buyer want the benefit of
| their knowledge?
|
| Personally, not a huge fan of the cartel. On the other hand,
| I have worked with agents who have saved me tons of time &
| money by spotting problems before inspection. If the agent is
| going to be present, it seems logical to have them contribute
| their knowledge.
| Raffi_Isanians wrote:
| An agent will still look at the property and provide a
| check/advice, so you wouldn't miss out on that benefit if
| you use our service. Regarding point b), while we send a
| licensed agent to the property, we understand that
| different buyers have different preferences. Some may want
| to fully leverage the agent's expertise, while others might
| prefer a more hands-off approach. We believe in giving
| clients the flexibility to choose their level of
| engagement.
| danfunk wrote:
| There are good realtors and bad realtors. I could imagine an AI
| chat bot that was better than some of the mouth breathers out
| there. But I wouldn't use those people anyway. But there are good
| people in the real estate business _. if you want someone that
| can negotiate a good deal, and answer complex questions specific
| to the local laws, who knows the local neighborhood, and the
| local realtors, who can handle last minute changes and help you
| buy that house when your approved loan suddenly falls through ...
| you want someone on your side in those cases. Not some damn
| chatbot. (_ my wife is a realtor)
|
| Now ... an AI powered tool to helped realtors and buyers
| communicate, schedule, track progress, .... that would be a great
| application.
| greenfish6 wrote:
| Is your wife looking to join a startup?
|
| I think many parts of being a realtor are already automated by
| realtors. They are already trying to automate themselves.
|
| They use scripts to get first clients and negotiate. They use
| automated email campaigns to advertise their market and local
| expertise. They use automatic mailers for algorithmically
| selected properties. They use APIs & software services to
| determine similar property suggestions.
|
| So these pieces are already automated by softwares that
| realtors use.
|
| Our difference is we'll wrap everything up with a bow and just
| fully acknowledge that we are an automated solution.
| DrillShopper wrote:
| Imagine how easy it would be to influence the AI to redline.
|
| Slumlords, racists, and other CHUDs are salivating over this
| bbor wrote:
| A) this is a buyer's agent, not a seller's agent.
|
| B) I don't think you tell the agent your race, and
| traditional bias protections (namely doing the whole process
| without meeting in person) would still be in place AFAIU.
| greenfish6 wrote:
| A) Correct.
|
| B) Yes, I think the AI agent actually can more easily
| ignore your race / age / gender because it is not
| programmed to go look up those things and people don't text
| their agent what they are - hard for the LLM to know these
| things and start to bias
| cdblades wrote:
| > I think the AI agent actually can more easily ignore
| your race / age / gender
|
| I challenge you to support that idea in any way.
|
| > because it is not programmed to go look up those things
|
| The concern is what it's trained on. How have you curated
| your data to avoid introducing biases based on
| race/gender/etc?
|
| > people don't text their agent what they are - hard for
| the LLM to know these things and start to bias
|
| The exact opposite. The way people communicate,
| especially via text, is heavily dependent on their
| background and is full of social signals. LLMs are
| trained on data sets that _are_ often annotated with that
| kind of information.
|
| How would you affirmatively prove that your LLM model
| wasn't making inferences about those categories that
| influence it's output?
| bbor wrote:
| I share your general concern, but tbf these people aren't doing
| the obvious and basic "let a chatbot do it" thing, they're more
| making a platform that involves a few specialized language
| models for making the expert-gated stuff accessible to all.
| Like, they're not writing contracts or negotiating using an
| LLM.
|
| I understand your wife is in the industry, but that's honestly
| a huge bias in this discussion IMO, not a help. No offense
| intended, of course; I well understand and totally relate to
| the sinking feeling of changes coming to your industry! But I
| think it's just objectively provable that home realtors and car
| dealerships are two US industries that have been allowed to
| fall behind the times for a while, now.
| greenfish6 wrote:
| I think there's a balance of some crowd who will love an
| automated solution and some who will never get there.
|
| Some people still don't want to even shop online! Those
| people probably won't be convinced to use an AI based service
| dparker8281 wrote:
| It's funny you say that, because we are actually working on
| this exact tool right now. I'd love to chat if you'd like to
| discuss?
| CalRobert wrote:
| I prefer not to use Google, do you offer signin for people like
| me?
| greenfish6 wrote:
| I'll take a look at offering other sign in variants. What do
| you prefer? username-password?
| CalRobert wrote:
| Ideally yes, thanks.
| Finnucane wrote:
| When the seller's agent tells you they have another offer, and
| this is a lie, will your AI be able to figure that out?
| greenfish6 wrote:
| We forward a lot of the text communication from agents back to
| the client, so if it's said in a way that it's possible to
| figure out, then it can be figured out.
|
| For most seller agents, if they will send you that one text
| that says there's other offers, and that's a lie, and they
| don't respond to other inquiries about it... is there a way to
| tell that this is a lie? I'm not sure this is possible even for
| the best buyer agent
| ned_at_codomain wrote:
| Guys, this is so cool! I am strongly in favor of anything that
| cuts out rent-seeking middlemen.
|
| Every time someone mentions _real estate_ to me, I immediately
| think back with intense resentment to the thousands upon
| thousands of dollars I paid brokers just to unlock crappy studio
| apartments for me in Boston. I was just out of school and barely
| had any money, but I was still paying a huge premium over the
| cost of rent for ~nothing. So annoying.
| candiddevmike wrote:
| > Guys, this is so cool! I am strongly in favor of anything
| that cuts out rent-seeking middlemen.
|
| This company is another rent seeking middleman.
| Raffi_Isanians wrote:
| Same. Its why we started this.
| eagleinparadise wrote:
| Best of luck. I'm a commercial real estate professional who has
| spent time as a broker, lender, and private equity investor.
|
| Residential definitely is a lot More of a ridiculous market. But
| ultimately as an agent, you get hired to work with mostly
| irrational actors (sellers and buyers).
|
| As someone who is very interested in AI and taught myself how to
| code (I don't know any other real estate people who know anything
| about code), I think it's going to be incredible hard to uproot
| the brokerage industry.
|
| It's challenging to get buy in from many different types of old
| school, fragmented actors in the space. I'd love to see someone
| prove this can be done, but I think it's a challenge, so best of
| luck. Curious to follow along.
|
| I think proptech needs real professionals who have been in the
| trenches to be involved because there's just too much nuance in
| the industry outsiders have no idea about.
| Raffi_Isanians wrote:
| Appreciate the support. We aren't necessarily trying to uproot
| the industry, just want to deliver a better buying experience.
| People deserve agents who go out and do a lot of the work for
| them. Our goal is to do everything we think a real estate agent
| should do. Lots of value to be provided.
| sahmeepee wrote:
| Aaah, but can it show you into a room with a toilet, sink,
| shower and bath in it and tell you "This is the bathroom"?
|
| If not, you'll never unseat the seasoned professionals of the
| UK real estate sector ;)
| threeseed wrote:
| Neither can an AI.
|
| The whole point of real estate agents is that as a seller I
| don't trust my house being open to any random buyer.
| keeptrying wrote:
| The ludicrous 6% fee is whats going to drive adoption by end
| users and in turn by brokers.
|
| Move that fee to 1% for buyer agent and you have a massive
| market.
| itake wrote:
| The 6% fee was paid by the sellers, not the buyers. Buyers
| didn't pay anything to the agents.
|
| But even then, the buyer's agents would "refund" the buyer
| ~2% of the fee as a cashback incentive to use a specific
| agent.
|
| but recently, the rule changed so the sellers are only
| required to pay the 3% fee to the seller's agent and buyers
| need to negotiate their own deal with the buyer's agent.
|
| Currently, there are many brokerages competing on buyer's
| fees, dropping the fee to 1% or offering a flat-rate fee.
|
| I'm very skeptical that a 1% buyer's agent fee (matching the
| existing players) would move the needle much.
| gycom wrote:
| The 6% fee (more normally 5% around these parts, western
| US) is paid by the sellers, but with the buyer's money.
| Usually. However, it's important to note that there was
| _never_ a requirement for anyone to pay anything; it was
| simply what was commonly put into contracts. The settlement
| didn 't change anything about that in particular.
|
| I just sold a house a couple weeks ago. I agreed to pay my
| seller's agent 2.5% out of the sale price. I also, in the
| contract, offered to pay 2.5% to the buyer's agent. In the
| event that my seller's agent was also the buyer's agent,
| that 2.5% would be refunded to me. What actually ended up
| happening was that in the offer that we ended up accepting,
| the buyer asked us to pay 3% instead of 2.5% to their
| agent. We agreed.
| greenfish6 wrote:
| The primary driving factor on all these rates is the net
| take home for the seller. The reason why the total fee of
| 6% in a 3/3 split is because if this is done, then the
| seller will net about 10% higher than if they used no
| realtor. Similarly, for the buy agent half, they will get
| multiple extra % of home price above that 2.5%.
|
| The structure of the MLS / commission system incentivizes
| sellers to take out these large fees because they will be
| rewarded for doing so. Only when the system is upgraded
| to allow sellers and buyers to find each other and pay
| market rates will the fees go down (we want to provide
| our own MLS in the longer term future)
| gycom wrote:
| "Our own MLS" already exists in multiple forms; getting
| everyone to agree to use the _same_ one is the problem,
| and AI isn 't going to solve that.
| xienze wrote:
| > The 6% fee was paid by the sellers, not the buyers.
| Buyers didn't pay anything to the agents.
|
| It's the buyer's money, which becomes the seller's money,
| which gets paid to the agents. Realtors need to stop lying
| about who pays the fees.
| cortesoft wrote:
| The seller is the one who signs the contract with the
| agent and determines what percentage of the purchase
| price goes to the agent. It doesn't matter that the buyer
| was the source of the money, the seller is who decided
| what to do with it.
|
| If the seller uses 10% of the sale price to buy a boat,
| are you going to say that the house buyer bought the
| boat?
| xienze wrote:
| That's a transaction that occurs after the sale. The
| paying of agents is something that happens as part of the
| sale, so yes the buyer is very much paying the agent
| fees.
| cortesoft wrote:
| It's coming out of the seller's cut, though.
|
| Houses aren't sold at a fixed price. Buyers all put in
| bids and the seller chooses the best one.
|
| The amount paid for the house isn't going to be less if
| there were no agent fees. The buyer is paying the
| specific price because there are other buyers who would
| pay slightly less. It isn't like buyers are adding money
| to their offer because of agent fees, and sellers aren't
| going to sell the house for less if they didn't have
| agent fees. The price point is market equilibrium, which
| means the agent fees come out of the seller's total.
|
| Now, you might try to argue that more sellers would enter
| the market if sellers made 6% more on selling their
| house, which would increase supply and decrease price,
| but that's a big stretch... sellers are usually selling
| their house for reasons besides making 6 percent more.
| koolba wrote:
| > The 6% fee was paid by the sellers, not the buyers.
| Buyers didn't pay anything to the agents.
|
| Buyers are the ones paying everything.
|
| At 6%, that means the seller is willing to accept 94% of
| the sale price for the deal. So with a lower fee or simply
| less middle men feasting on low information transacters, a
| buyer with 94-100% could purchase that house and both
| parties would be happier.
| itake wrote:
| No. Buyers never consent for "their" money to go to the
| buyer's agent or sellers agent. The selling agent's
| contract with the seller (not the buyer) is the seller
| will pay the 3% fee to seller's agent and offer a 3% fee
| to the buyer's agent.
|
| Buyers historically have never negotiated the fee paid to
| their agent, other than choosing an agent that would
| refund part of their fee.
| cortesoft wrote:
| You can switch the words "buyer" and "seller" in your
| statement and it still works. If you want to consider it
| being paid by the buyer, you can, or you can say the
| seller pays it. It is all factored into the deal either
| way.
|
| I would argue, though, that it is more accurate to say it
| is paid by the seller, though, since they are the ones
| who agree to the percentage with the agent, and who signs
| the contract to pay the agent.
| theGnuMe wrote:
| >The 6% fee was paid by the sellers
|
| The buyer is the only source of money. The rest of it is
| just a shell game.
| cortesoft wrote:
| Well, the buyer's employer is actually the one paying the
| buyer the money that goes to the mortgage, are we going
| to start saying the employer is the one buying the house?
| No, because that is just how the economy works, money
| changes hands constantly.
|
| We say the person who makes the choice for the purchase
| is the one who paid for something... the seller signs the
| contract with the agent, so they are the ones paying.
| pzo wrote:
| When you selling any kind of product or service the price
| you gonna charge will take into account expenses that you
| have to sell or make this product, e.g. if you sell app
| in appstore and Apple and other taxes will eat 45% of
| your app price and you know you will break even at $1 per
| app profit then definitely you will ask user for $2.
| cortesoft wrote:
| This doesn't apply to most people selling a house.
| Sellers are not setting the price for their house, buyers
| bidding for it do.
|
| Anyone selling a house using an agent isn't someone who
| manufactures houses. They are mostly people selling their
| own home because they are moving to a different home.
|
| They are going to put their house up for sale, buyers
| will make offers, and the seller will choose the best
| offer. The buyers are making offers based on what they
| are willing and able to pay; they don't care whether 100%
| of that sale price goes to the seller or if only 94%
| does. They are making the same offer no matter what.
|
| And sellers aren't going to take 6% less if they don't
| have an agent. They are going to take the same offer
| whether they get 94% of it or 100%; they are taking the
| best offer made.
|
| Even your app example isn't how it works. There is no
| "break even" price for a digital good that doesn't have a
| COG (cost of good). App manufacturing has a fixed price,
| and then every unit sold costs them zero dollars.
|
| They are going to set the price to be what maximizes the
| value of "cost per unit * units sold". That equation is
| going to be the same no matter what the App Store
| percentage is. The only thing the percentage does will be
| to change the amount of money the company makes and
| change the equation on whether it is worth making the app
| at all; once the app is created, the only thing that will
| determine the price is the equation above, not the cost
| per sale.
|
| So many people seem to have this idea that prices for
| things are based on some "cost per good + profit margin =
| price", but that isn't how any good is priced. Many goods
| end up being priced in a way that is close to that, but
| that is only because of robust competition. Prices are
| set by the seller trying to figure out which price will
| generate them the most profit; the cost to make the good
| only sets a price floor, where if they can't get more
| than that amount, it simply isn't even worth it to make
| and sell the good. It has nothing to do with the price
| ceiling.
| pzo wrote:
| > They are making the same offer no matter what
|
| Obviously seller can decide if agree on minimum price.
| Otherwise I doubt if someone would sell if bidding would
| end at $1k for a home. If seller wanna sell apartment for
| $100k then they expect that someone bids with $105k to
| covert agent fee.
|
| > And sellers aren't going to take 6% less if they don't
| have an agent.
|
| Why not? I many times did a deal with AirBnB host after
| few weeks of renting by talking with them directly and
| asking for the same rent minus AirBnB fees. They had no
| problems with that because they would earn the same
| amount and only cutting the middle man.
|
| > the cost to make the good only sets a price floor,
|
| Fee based on percent like 6% doesn't have any floor. You
| really believe that if we now change this fee to 66% this
| wouldn't have any impact on buyer and buyer would be fine
| because this 66% fee is paid buy seller?
| cortesoft wrote:
| AirBnB is very different. They are taking that deal
| because it is easy, and they don't have an easy way to
| find other renters without airbnb... airbnb is providing
| a match making service between renters and rentees. When
| you are selling the house, it is a one time sale for a
| large amount of money. In this market, you will get a LOT
| of offers for your house; you will obviously accept the
| highest offer, whether you have an agent or not. Why
| would a seller choose to make less money? Your airbnb
| example wasnt the person taking less money, they were
| getting the same money; the house example would actually
| be taking less money. They would never do that.
| Closi wrote:
| Is this the rate in the USA? In the uk it's a standard 1% for
| the seller.
| sahmeepee wrote:
| It actually varies a bit in the UK (always for the seller
| as you say) with a possibly surprising relationship with
| property value: properties at the top end typically pay a
| higher % than those in the middle or at the bottom.
| whiplash451 wrote:
| If there was a serious opportunity to arbitrage under the 6%
| fee, you bet that someone would have done it already -- and
| well before the AI era.
| rco8786 wrote:
| To be fair, NAR goes to great lengths to maintain their
| monopoly and lock out anyone who tries to buy or sell a
| house without using them....specifically because they know
| they're priced insanely high for the services they provide
| and are in real danger of being undercut.
| willturman wrote:
| > When the National Association of Realtors signed a
| landmark $418 million settlement in March, economists and
| academics predicted that the deal -- which included an
| agreement to upend key practices concerning how real estate
| agents are paid -- would create the most significant shift
| to the industry in a century.
|
| [1] https://www.nytimes.com/2024/08/16/realestate/realtor-
| commis...
| Raffi_Isanians wrote:
| We are already seeing the shift in practice. The changes
| went into effect just over a month ago (August 17th).
| gregschlom wrote:
| Yes that's what Redfin does actually. And I'm sure a bunch
| of others.
| toomuchtodo wrote:
| Redfin only charges 1% if you both buy and sell with them
| within a window of time (365 days if I recall from our
| Redfin broker). I've used them exactly once on both the
| buy side and sell side, and I was not impressed. I would
| not use them again, even with the 1% vs a more
| traditional 5% broker fee.
| Raffi_Isanians wrote:
| They're a bit sneaky on this one too. You pay full when
| you buy, but then they only charge 1% when you sell. So
| you only save on the sell, pay full price for the buy.
| joshstrange wrote:
| This is the thing, the NAR settlement didn't really change
| anything, the fee was always negotiable and there always
| were agents who would offer under 6%. They were typically
| scummy agents who didn't last long (they popped up when
| real estate was hot then disappeared after they burned
| enough clients and/or the market cooled off).
|
| As in all things you will get what you pay for. I'm not
| interested in fighting with anyone about what a realtor is
| worth but I will say:
|
| * All agents are not created equal
|
| * A good agent is absolutely worth it
|
| * 6% is only high if you don't value your time and/or if
| you are ok getting a worse deal because you don't know what
| you are doing
| zaptheimpaler wrote:
| This logic justifies any amount of fees. They can be
| excellent brokers and still not deserve $6000 (selling a
| $1M house) for maybe 40 hours of work as a very generous
| estimate.
| WillPostForFood wrote:
| They don't deserve $6,000, or $60,000 which is 6%!
| bookofjoe wrote:
| 6% of $1M = $60,000
| joshstrange wrote:
| It would be $60,000, not $6,000 but they don't make $60K.
| They spit the commission, $30K and then there are other
| people (broker) that get paid out of that amount, call it
| $20K to the agent in that case, sometimes less if they
| gave their client a discount (again this happened all the
| time before the settlement, I know agents that offered
| .5% off for repeat clients or friends and family and that
| came wholly out of their cut, so call it $15K in that
| case).
|
| Even at $60K there are things an agent can do to swing
| the value of a house that much or more. Maybe you, the
| seller, will do some/all of those things, maybe you
| won't.
|
| Agents are effectively on-call 24/7 (your agent wasn't?
| Sorry, see above: not all agents are created equal) and
| they often work in the off-hours for every other
| profession (aka nights and weekends).
|
| Here is the thing, /most/ people buying or selling a $1M+
| houses are not nickel and dimming. I sure HN has an
| outsized group of people who disagree, cool, I've seen it
| first hand.
|
| I find it ironic that on a technology forum people are so
| quick to jump to "agents aren't worth it" with so many
| people think the same thing about software developers
| and/or their quotes for building software.
| mym1990 wrote:
| * All agents are not created equal
|
| * A good agent is absolutely worth it
|
| People aren't really arguing against these things. I
| don't get it, if the settlement didn't really change
| anything, why is everyone making such a fuss about it?
|
| My other question is, is there a linear correlation
| between effort to sell a home and its price? Is a 3
| million dollar home 3x the effort to sell over a 1
| million dollar home? Because I pay 3x the money to sell
| it...or am I paying for the "connections"?
| noirbot wrote:
| That may be a bad example - I'd imagine once you're into
| the multi-millions, connections actually _do_ matter in a
| way they don 't if you're trying to sell a $400k house.
|
| I doubt it's much harder to sell a 600k house than a 300k
| house, but it could be quite a bit harder to sell a 4m
| house than a 2m house just because there's so many less
| buyers in the pool and they're likely to be a lot more
| particular than just wanting a roof over their head.
| evantbyrne wrote:
| Prior to the changes which only went into place in August,
| agents were colluding to keep fees artificially high.
| Buyers' agents would actually hide listings that promised
| less than what they wanted and all of that information was
| hidden from buyers until the buy/sell agreement. It is way
| too early to say exactly what the impact will be, but as an
| anecdote my agent accepted 2% on the home I just closed on.
| My prediction is fees will decrease significantly, because
| it just doesn't make financial sense to pay agents as much
| as people have been. Also, agents wouldn't have been
| colluding to the extent they had been if they believed a
| free market was good for their bottom lines.
| edmundsauto wrote:
| Some fees will drop, there will definitely be an H&R
| Block version of agents.
|
| Other agents will have such demand, their fees will
| remain high.
|
| It's not clear to me as a potential buyer that I want to
| go with the commodity, especially in quirky areas like
| TICs in San Francisco. We're in for an interesting ride,
| best of luck to this team!
| rco8786 wrote:
| IF they can deliver a product that actually works, yes.
| fossuser wrote:
| It's a corrupt market imo, like car dealerships - they work
| to legislate their continued existence.
|
| Any market structured where you have some people doing many
| transactions and some doing few ends up skewed to benefit the
| person doing many while screwing the person doing few.
|
| It's true with realtors, IPOs with investment banks, car
| dealerships, funeral homes etc. and it's a hard problem to
| fix.
| ejstronge wrote:
| > As someone who is very interested in AI and taught myself how
| to code (I don't know any other real estate people who know
| anything about code), I think it's going to be incredible hard
| to uproot the brokerage industry.
|
| Has learning to code generated any benefit to you? What areas
| do you think have space for code to help buyers?
|
| I think there are many, and - 'AI' or not - a clever tool can
| generate real value for buyers. Things like mis-zoned units,
| unreported square footage, signs of buyer motivation, estimates
| of homeowner equity, etc. can be estimated by good buyers
| agents but could be made available to everyone for a small
| subscription.
| greenfish6 wrote:
| There is 0.5 mb of data per home in the US. Too much for a
| person to sift through, typically. We use LLMs to break that
| down into actionables for families via text message. The goal
| is to keep things digestable. People can understand if their
| unit is mis-zoned if you use it in this simple phrasing, but
| not what a "RM-3 District" is (common type of zoning in SF).
| The LLM + search abilities can explain a lot - this is how
| most people learn things about real estate, this process of
| googling phrases they don't know
| xkcd-sucks wrote:
| > you get hired to work with mostly irrational actors (sellers
| and buyers).
|
| AI-scale personalization could help here, assuming macro scale
| irrationality is mostly rational in consideration of individual
| values (e.g. character of neighborhood, character of
| permitting-related town departments, etc)
|
| which could maybe turn out better in the short term as tools
| for human agents, but still
| Raffi_Isanians wrote:
| I wouldn't say our clients are irrational, but I agree that
| buying a house can be stressful. The goal is to anticipate
| and address all of our clients' questions, including those
| they might not even know to ask. From our experience, this
| significantly reduces the frustration that typical homebuyers
| often feel during their purchase journey.
|
| TLDR: Oftentimes the agent not being proactive is the cause
| of the buyer's behavior.
| matthewemiller wrote:
| I can attest to this likely being true.
|
| We are working on morfi.com, trying to build better software
| for mortgage professionals, and it's challenging.
|
| You can see it in reporting from firms like MeridianLink,
| mortgage (and probably real estate) lag behind their peers in
| the adoption of technology.
|
| https://s28.q4cdn.com/477693378/files/doc_financials/2023/q4...
| IAmGraydon wrote:
| >I don't know any other real estate people who know anything
| about code
|
| CRE professional here (about a decade in the industry) who was
| a coder first. I think there's plenty that can be disrupted in
| real estate, and specially commercial real estate, where there
| are a lot of old problems that are ripe for solutions. It's
| like you said though - those who experience the problems and
| actually know how to write software to solve them are rare. We
| are in a good position for opportunity.
|
| I think that brokers can (and should) be replaced by something
| more efficient, but the real problem for disrupters is
| regulation, IMO. A program/app/SAAS cannot hold a real estate
| license, and therefore cannot do things like quote rates,
| terms, or manage transactions. As of right now, it's illegal in
| most states.
|
| As for the website that OP created, I think it was a nice
| attempt, but it seems very half-baked and the case for its
| value is not clear at all. There's some pretty design and not a
| lot of substance there.
| lasermike026 wrote:
| Unfortunately this doesn't solve the problem of over priced
| houses and property. We don't need these mansions. What is
| required is cheap land and affordable, maintainable houses. This
| market requires a complete teardown. I'm not going to be
| satisfied until trillions of dollars in phantom value is goes to
| it's ration number.
| bbor wrote:
| Looks great, hopefully one day I'll be able to use your services!
| Has all the features I'd be looking for.
|
| Out of curiosity, do you foresee regulatory trouble? Realtors are
| an extremely powerful lobby in the United States, and I wouldn't
| be surprised if they were one of the first to do some serious
| pushback against LLM-related automation under the guise of
| "protecting consumers". You mention the recent National Realtors
| Association changes in your YC profile, which I did not know
| about (https://www.cnn.com/2024/08/17/business/nar-realtor-
| settleme..., TLDR antitrust settlement seeking to protect buyers
| in particular from predatory realty practices), but inspires both
| hope for the future and concern that the NAR is on active defense
| mode.
|
| Specifically I guess I'm asking about your use of the word
| "traditional agent", since on some level you two (or just the
| attorney partner?) seemingly would still be considered "agents"
| of some kind, given that you're looking over offers by hand, and
| offering personalized support to users. Is there maybe a legal
| dance at play there already?
|
| On a completely separate note, if you find the time/interest:
| will this ever scale to sellers' realtors as well? If you
| unicorn-to-the-moon-super-scale as Mr. Graham is hoping for
| everyone in YC, what's the endgame market look like? My laymen
| intuition says you'll always need experts involved at certain
| points in the process to protect buyers from lemons and sellers
| from signing deceptive contracts - do you agree, or with the
| right regulations and AI could this all be as automatic as buying
| anything else online?
| greenfish6 wrote:
| There will likely be large regulatory movement in the space in
| the upcoming future. There are more pending suits beyond the
| August 17th DoJ one.
|
| Legally, we are still agents.
|
| Eventually the plan is to support sell side as well. We are
| tackling buyers first. The reasons: Because realtors are paid
| for on commission, the incentive is to transact immediately and
| high. This has bad alignment for the buyer, but good alignment
| for the seller. Sellers also require a lot more in person
| logistics like staging and photography.
| enahs-sf wrote:
| CAR and NAR are going to have a field day with this one.
| greenfish6 wrote:
| I think the DoJ is having a field day with NAR as are the many
| individuals currently suing them
| DowagerDave wrote:
| Sellers, sure but I don't understand why a buyer would NOT want
| to use an agent? You mention better prices, but I don't believe
| I'm in a unique environment where the seller covers all costs and
| agents work on commission.
|
| >> The founders of Modern Realty realized that since buyer agents
| are paid for by commission, they will encourage you to buy
| immediately and high. Modern Realty allows you to transparently
| control your transaction.
|
| I believe this could be a flawed premise. It's no secret agents
| are after the quick sale, but it is far easier to convince the
| seller to accept an offer 20 under than talk up the buyer.
| truk5828 wrote:
| Buyer agents are not free. The buyer agent commission has
| historically been felt more indirectly by the buyer, sure, but
| sellers pay them out of proceeds. The recent NAR settlement
| agrees that this needs to be clear. This is also a contributor
| to higher transaction costs and inflated commissions that
| Modern Realty seems to be addressing.
| thinkmorebetter wrote:
| I think it's a bit misguided in the pitch by too boldly trying to
| replace all buyer agents. A lot of what realtors offer,
| especially to first time buyers (~1/3), is emotional support and
| confidence/security for making the biggest financial decision in
| their lives. I don't believe an AI isn't going to be able to do
| that. But if you're a second+ time buyer, then I think it makes
| more sense.
| alfalfasprout wrote:
| Is emotional support worth $60k on a $2mm house? No, it isn't.
| Lots of realtors are trying to justify their worth but the
| reality is a large number of transactions still involve the
| buyers/sellers doing their own research + due diligence.
| jrflowers wrote:
| > Is emotional support worth $60k on a $2mm house? No, it
| isn't.
|
| There is no practical ceiling on what people will spend to
| feel comforted and encouraged, or to have their choices
| applauded.
| thinkmorebetter wrote:
| I am not defending the realtor fees here. The free market
| should decide what is worth to anyone. My take is simply that
| an AI realtor doesn't do all that a (good) human one does.
| greenfish6 wrote:
| I actually do believe that AI can make someone feel more
| comfortable with their purchase.
|
| Let's break down the communications that realtors currently do
| to comfort buyers (mostly over text, which is also how we
| communicate):
|
| Tell you comparably priced properties - we do this. Remind you
| the steps in the process - we do this. Tell you basic stats
| about local transactions (such as telling dejected buyers that
| only 1/6 home offers get accepted in the bay) - we do this.
| Send newsletters for market updates - we do this. Tell you what
| other agents are telling them - we do this.
|
| I think if someone really needs a person putting a hand on
| their shoulder, then we aren't that. But we have implemented
| many of the typical comforting realtor actions
| thinkmorebetter wrote:
| Fair enough, and I wish you luck because I welcome down
| pressure on existing fees. My take is simply that the
| positioning seems to unnecessarily make it a fight against
| all buyer agents, whereas it might be better to start by
| targeting the buyers who already "get it".
| greenfish6 wrote:
| Currently, the description on our website says that we use
| AI to help you interpret real estate data and gain an edge
| on other buyers - nothing about fighting other agents.
|
| I think that is injected opinion from commenters here. &
| yes, we are targeting buyers who already believe that they
| need a service like this due to their past or current
| experience
| threeseed wrote:
| > we do this
|
| Everything you've described could be achieved with a basic
| web app.
|
| Not seeing what AI brings to the table here other than being
| a fake human that gives inaccurate advice ~5-10% of the time.
| Which seems risky when I am making the biggest financial
| decision of my life.
| lxe wrote:
| After my first home buying experience, I can assure you that
| "emotional support" is actually "emotional manipulation"
| henning wrote:
| I can't wait to try to buy a house and have an AI that tells me
| that a 5.11% interest rate is higher than 5.9%.
| gycom wrote:
| Hey, can you send your AI agent over to this house I'm looking at
| and measure out the bedrooms for me? Also, there's tile in the
| kitchen; was it laid correctly (tile under baseboard) or was it
| laid badly (burying the bottom of the baseboard)?
| greenfish6 wrote:
| Human buyer agents wouldn't do these things that you're asking
| gycom wrote:
| My buyer's agent did those things for me yesterday, and would
| do them again today if I asked. That's what a buyer's agent
| is for.
| greenfish6 wrote:
| I, like many of the other people in this thread, had a
| buyer agent that did nothing. If you need someone who can
| do these things, looks like you've found that person!
| sgt wrote:
| It's interesting how many AI Real Estate agent startups and buzz
| I've seen and heard about recently. The other day I saw several
| of them in my LinkedIn feed as well. Good luck - I suspect this
| is going to be quite a competitive space, and it'll be
| interesting to see if real-estate-without-agents pans out.
| greenfish6 wrote:
| It's due to the August 17th Department of Justice case caused a
| restructuring of how buyer agents are paid, so this spawned a
| variety of competitors.
| eldavido wrote:
| I tried to automate a big chunk of property management (mostly
| commercial) over the past few years. The main thing I realized is
| that it's mostly a people business, and AI (or computers
| generally) are never going to stand over a vendor's shoulder and
| keep them honest (e.g. make sure they sweep up or don't scuff the
| walls), or have a difficult conversation about late rent with a
| tenant, or show up after hours when a pipe breaks, if only to
| show face with a tenant.
|
| There are definitely workflow and process elements that can be
| automated. But if wealth management is any indication, there are
| a lot of people willing to pay a premium for having a person
| involved. Not sure why real estate would be different.
|
| The wildcard in all this is the NAR court decision. If buyers
| have to pay for their own representation, that might make them
| shop around a little more.
| greenfish6 wrote:
| I think people are constantly changing their comfort zones when
| they fall in love with different products.
|
| People definitely would be open to real estate w/ software.
| Otherwise, by this logic, why do people use Zillow? Why don't
| they just drive to their local Relator office to ask about
| local listings? How could you trust an online algorithm to show
| homes instead of someone describing homes to your face?
|
| We are seeing that the fraction of home buyers that sign with
| the first buyer the meet is declining - more opportunity for
| us!
| rootusrootus wrote:
| I am skeptical but optimistic. At the very least, this introduces
| another avenue to let competition drive down realtor pricing. I
| would like to see a realignment of incentives. Getting a cut of
| the sale price is just good for the agents' bottom line, but not
| good for the buyer or seller.
|
| The problem is the monopoly realtors have. Regulate it better, or
| break it up, and the market can definitely handle the rest.
| greenfish6 wrote:
| Our goal is to own the listing service that homes are listed
| on. There is this network effect of needing to be on the same
| listing service that everyone else is on.
| alemanek wrote:
| I am actually your target market. We are looking to buy a house
| early next year. But, one thing that put me off is that you don't
| list what fees you charge, is it flat rate or a percentage,
| ..etc.
|
| In the FAQ I see this but no mention of the standard terms of the
| buyers agreement:
|
| > Do I need to sign a buyer agreement?
|
| > We will let you know if you need to sign a buyer agreement. You
| will for sure need to sign a buyer agreement when you submit an
| offer through us, but otherwise we can work out a timeline.
|
| I know you just launched so not assuming any bad intent but it
| would be good to share pricing information for the services you
| offer. I have had to deal with lots of "Call us for pricing" in
| my day job. So, for stuff like this I just move on if I don't see
| at least a price range listed somewhere upfront.
| greenfish6 wrote:
| Other relators do not put their fee pricing on their websites
| so we decided to follow suit. We have the same pricing model -
| negotiable. But we provide better service.
| esafak wrote:
| > But we provide better service.
|
| How would a prospective customer know that?
| greenfish6 wrote:
| We let you drive your own process and interpret real estate
| data with AI. We target customers who are looking for these
| in their Realtor
| somehnguy wrote:
| > interpret real estate data with AI
|
| What does this actually mean though?
| greenfish6 wrote:
| The texting service we provide works similarly to texting
| a regular realtor. You can text it "Is a $1200 HOA fee
| per month high for san francisco?" and it will do the
| searches and compare the local properties to tell you an
| answer
| cdblades wrote:
| So do you actually do real estate agent things: make
| contracts, review contracts, communicate with your
| client, negotiate on behalf of your client?
|
| Or are you an information service specializing in real
| estate information?
| cdblades wrote:
| That doesn't in any way address the question the other
| commenter was asking?
| alemanek wrote:
| Some realtors do in fact list their commissions and fee
| structure:
|
| Some examples from the market we are looking in.
|
| 1. Flat fixed fee and refunds extra: https://arrivva.com/
|
| 2. Minimum 1.25-1.5% but refunds 50% of any commission paid
| above: https://www.walawrealty.com/buy
|
| Minimum for me to work with a company is transparent pricing.
| Even a range based on levels of service is cool. But, I am
| not going to waste time on a phone call with no clue as to
| fee structure.
| imglorp wrote:
| The whole agent commission business is already fully shady
| and at least one class action brought that to light[1].
| Both buyer and seller agents benefit from higher home
| prices and from percentage based commission despite the
| work being the same regardless of home price. The customers
| are always the victim.
|
| https://realestate.usnews.com/real-estate/articles/what-
| the-...
|
| I've been very pleased to use an attorney on a simple
| hourly fee who did not have such gross conflicts of
| interest.
| greenfish6 wrote:
| We are not participating in the race to the bottom. There
| are a lot of 0% fee realtors out there! Try
| https://www.turbohome.com/, I've seen them on social media
| richwater wrote:
| Frankly your responses on this page have convinced me to
| stay clear of this product.
|
| Sorry, I guess.
| greenfish6 wrote:
| Thanks for feedback. Our priority is on good service
| kevinob11 wrote:
| I was so excited when I saw this and now I'm
| disappointed. This kind of statement "quit on trying to
| win clients that are trying to get the best price"
| creates a false dichotomy of those who are trying to pay
| nothing and those willing pay whatever. There are tons of
| customers in the middle who are happy to pay for
| important services but think 30K (3% in high COL areas)
| is too much for the services rendered.
|
| That being said, I think as long as you are honest that
| "better pricing" isn't your goal then fair enough. It
| isn't the service for me, but I'm sure some folks will
| certainly be excited about it.
| cdblades wrote:
| ...So being up-front with your pricing, even if that's a
| "our fees are negotiable but tend to be (flat rate or
| percentage) around the X range" is a "race to the
| bottom"?
| margalabargala wrote:
| This says to me, "we are just like other realtors" and makes
| me less inclined to use your services.
|
| Transparency is a killer feature for realtors that would set
| them apart from the masses. AI is a nice to have feature.
|
| > We have the same pricing model - negotiable
|
| Nobody wants to start off with an adversarial discussion with
| the person they are trying to hire to help them.
|
| Also, I'll point out that on your front page, you say:
|
| > We are more responsive (24/7), provide better service, _and
| offer better prices_.
|
| But here you are saying you offer the same prices.
| greenfish6 wrote:
| True, I'll update the website to reflect our updated
| pricing model
| mliker wrote:
| Realtors do in fact list their fees. More and more of them
| are, especially after the August 2024 changes
| greenfish6 wrote:
| Struggling realtors list their fees as a feature. Look
| through any of the top realtors in the bay area from last
| year:
| https://www.theleading100.com/honorees/theleading1002024/,
| you'll notice none of them list their fees. Here's the
| websites of the top 2 realtors in the bay area from last
| year, to save you some clicks:
| https://www.kerinicholas.com/, https://go2marin.com/
| Mistletoe wrote:
| Aren't you trying to be better than them though? People
| need to know that they are saving money with your new and
| unproven service that could go awry in so many ways.
| greenfish6 wrote:
| People buying consumer products typically believe in
| price signaling. We've actually had clients believe in
| our services much more at full price than when we were
| discount a couple months ago.
|
| The default question when we charged a discount price was
| - "but what am I missing out on if I choose you?" - and
| even when we said "Nothing!" clients bought into the
| discount pricing signal already and could not be swayed.
| This question is never asked at full price
| conductr wrote:
| So 3% and even lower touch service, oh yea "the seller pays
| for it" right? Buyer Agents are already grossly overpaid for
| the amount of actual work involved IMO, you so much as
| pointed that out in your stated value prop except found a way
| to keep the greedy commissions and not actually improve
| anything for the buyer.
|
| There's flat fee agents that will do exactly this without AI
| and at a cost of $500-1000 where I live. You should do that
| and go for volume. Edit: Oh and their offer doc includes a
| clause that effectively negates the 3% buyer commission and
| nets seller the same amount without letting their agent keep
| the full 6%
|
| If you could normalize this, you will have truly disrupted
| the industry. As is, your an ai substitution for status quo
| ramesh31 wrote:
| There's a reason why Guinan is still the bartender on Enterprise
| D, even though a perfect drink can be instantly made with a
| replicator.
|
| People like people. And people want to be sold on things by other
| people. You won't ever replace that. AI can help massively with
| paperwork involved. But at the end of the day there will always
| be a human holding people's hands through the home buying process
| because that's what they want.
| greenfish6 wrote:
| You can't get everybody. But, I'm sure you've bought a canned
| alcoholic beverage from a store before? That was made by a
| robot, are you ok with that?
|
| Your bartender also may pour you a drink from a can as well -
| I've seen this
| threeseed wrote:
| You are conflating products with services.
| simplyluke wrote:
| I don't see anyone asking the question that to me is the elephant
| in the room:
|
| How are you preventing hallucinations and plainly false
| information being sent to buyers engaging in what's likely to be
| one of the largest financial decisions of their life? Beyond just
| leading to a bad UX, what's your legal exposure there?
|
| You mention providing comps, there's a LOT of local knowledge
| that goes into that. How are you automating that? Other solutions
| I've seen like Zillow are pretty laughable. In some neighborhoods
| a 2 car garage is worth six-figures despite not contributing to
| square footage, because pulling permits for a new one is
| basically impossible, just as one local example.
| greenfish6 wrote:
| Our goal is not to rewrite every property description, but
| rather just link you the properties that we think you would
| like. If a property is mis-listed on Zillow, then that would be
| the same issue if a Realtor would send you that property as a
| recommendation
| threeseed wrote:
| > How are you preventing hallucinations and plainly false
| information being sent to buyers
|
| You must have missed this part of the question.
|
| Seems pretty important.
| simplyluke wrote:
| Looking through the demo I think almost all of the
| experience is being powered by the zillow API, and a minor
| amount of summarization may be getting handled by an OpenAI
| API. I think the AI claims are largely but not entirely
| hype related. It's still not very clear to me what
| advantages this is giving me as a buyer vs a traditional
| agent or even being unrepresented and just using zillow's
| product offerings. Maybe I'm missing the point though.
| savidge wrote:
| How are you guys accessing an accurate feed of real estate
| listings in a given location? I was under the impression that you
| still needed to have a brokerage license to get access to the MLS
| feed for a given region, which is what Zillow does.
| liammaher wrote:
| Looks cool, we're in the same industry, so let us know if we can
| help! If anyone is looking for cash-flowing investment
| properties, you can check us out at Coffee Clozers:
| http://coffeeclozers.com/
| greenfish6 wrote:
| Yep! I'm already on the Coffee Clozers newsletter
| a_d wrote:
| It is important for some company to make home buying better. Even
| outside of the pain of unaffordability, it is an utterly broken
| process. Advent of LLMs do give hope that this process can be
| imporoved signifiantly.
|
| Fun fact: I met Raymond and Raffi a long time ago and discouraged
| from going into this area. But now, I am glad they did. Their
| conviction is inspiring.
|
| If Turbo tax can make it possible for a person to file taxes, I
| am pretty sure a home can be bought online.
|
| Best of luck to modern realty! .. and we should hang again
| sometime :)
| greenfish6 wrote:
| Thanks for the support a_d :)
| a_d wrote:
| congrats on the launch! .. I am loving this entire thread.
| threeseed wrote:
| > If Turbo tax can make it possible for a person to file taxes
|
| Which is a _40 year old_ piece of software.
|
| And during these decades we've had with NLP and basic rule
| engines the ability to answer questions about the buying
| process. So not sure what innovations LLMs are bringing to the
| table here.
| cdblades wrote:
| This is, yet again, Y-Combinator backing an AI startup that is a
| terrible idea, with people who don't recognize what a terrible
| idea it is (the responses by the poster in this thread smack of
| inexperience and someone who hasn't thought through the risk
| their building for themselves and their customers).
|
| I thought the Y-Combinator backed company whose entire pitch was
| that they could use AI to forge survey results had to be rock
| bottom.
| greenfish6 wrote:
| You have 8 comments on this thread and have not mentioned
| anything about having any real estate experience yourself, just
| contradicting everything I say with 0 evidence.
| cdblades wrote:
| I don't have any, and indeed I've not criticized or
| questioned anything about real estate.
|
| I've questioned how you'd support some of the claims you made
| that were overly-broad and seemed disconnected from the
| technology you're describing.
|
| I've questioned your lack of transparency on pricing, and
| your justification for it.
|
| I've asked a few questions about the general risk/liability
| of being a real estate agent and how you're managing those
| risks.
|
| I think you've entered into this with a very narrow view of
| the technology you're using, the risk you're taking on (and
| creating), and the ethical considerations you need to be
| making.
|
| If I'm wrong, it would probably benefit you to clearly lay
| out some of the considerations you've made around the above.
| greenfish6 wrote:
| About 4 months ago when I launched Modern Realty, it was at
| discount. However, what comes with a product branded at a
| discount product is people aggressively questioning our
| quality and services all the time. Also, we would get lots
| of potential clients who would try and push our prices even
| lower. We don't have any of these problems at full price,
| and people have a significantly higher presumption of our
| services out the gate.
|
| We have similar real estate insurance to real estate
| agents. Agents make mistakes describing property all the
| time - we make mistakes, but fewer than the an agent.
| cdblades wrote:
| That sounds like solid pricing strategy, I get that. You
| should put that information loud and proud on your
| website.
|
| Are you sure your insurance will cover work that's not
| done by, not validated by, and never even seen by one of
| your licensed agents?
| tagami wrote:
| What limitations are in place due to licensed broker and agent
| laws?
| thesimpleman wrote:
| I tried building software in the real-estate space and its very
| difficult to break in and change consumer behavior. You can see
| what I was working on here (https://findur.io). The app is active
| but the business is shut down. I just leave it up to have as a
| portfolio project at this point. I've learned many hard lessons
| from doing this journey.
|
| Lessons learned that might help you guys out: - Consumers want
| everything Zillow has. Until you actually build Zillow AND THEN
| start to innovate on top of that, people won't come. - Zillow is
| developing the "everything app" for home buyers. Read their
| quarterly reports you'll get insight to what they are doing -
| Consumers in this market won't pay for a service give Zillow and
| others are free. Market is tough - Brokers are paying other fees
| and don't want to buy additional software. - Realtors are not
| doing well in this market so this must be a huge value add or
| they won't come. They also require a mobile version because they
| are on the road a lot. - Validate that your company is not just a
| "feature" but truly something different. A lot of times, Zillow
| can just build out the feature itself. It already has a first
| pass at using LLMs for search
| aabajian wrote:
| I personally know Raffi, he was my roommate in college. If ever
| there was a CEO you wanted to back (or someone to help you buy a
| home), he is it. Some highlights:
|
| - _Not_ from a wealthy background, he got where he is due to hard
| work.
|
| -Paid his share of the rent by trading stocks.
|
| -He bought a used SUV off of Craigslist and negotiated the price
| down by almost 90%, afterwards the seller smiled and said
| something akin to "the balls on this guy!"
|
| -Double majored in electrical engineering and economics in
| college.
|
| -Worked at the US Patent Office reviewing _video card_ patents,
| well before cryptocurrency, bitcoin mining, or AI.
|
| -He built his own desk using woodworking skills.
|
| -Studied contract law and has closed some multi-million dollar
| deals for other startups. He quit this high-paying, stable job to
| start Modern Realty.
|
| -Has his own number of AirBnb properties.
|
| Raffi has the very unusual combination of street smarts, book
| smarts and salesmanship.
| greenfish6 wrote:
| :)
| wanderingbit wrote:
| I welcome this wholeheartedly. I recently sold my first home and
| was frankly disgusted by how large the fee is for what my realtor
| did. I eventually went For Sale By Owner and will never go back
| to using a realtor. Zillow/redfin already replace the search and
| comparables part of the process. What realtors currently provide
| is the "white glove service" which helps first time buyer/sellers
| feel good about one of the biggest transactions of their life.
| Other than that I'd say realtors are mostly rent seekers, and
| their time has come.
|
| What I predict will make or break the AI realtor experience is
| how well the AI can emulate (maybe and even improve?) the feeling
| of security and assurance that one gets from using a realtor.
|
| I'd love some responses with stories on where realtors provided
| some actual unique service. Because all I've seen are realtors as
| a dying parasite of a bloated system.
| lxe wrote:
| This piques my interest, as I have worked in this space for some
| years, AND I've had terrible experiences purchasing homes in Bay
| Area and elsewhere.
|
| Product questions:
|
| - How is your solution better/different/cheaper for buyers who
| would otherwise choose a discount buyer realtor services from
| Zillow or Redfin?
|
| - Who will be doing the tours?
|
| - Are you offering a tour-only non-exclusive representation
| agreements?
|
| Business questions:
|
| - Seller agents in the Bay Area will definitely "blacklist"
| buyers who use this, as they've done for Redfin and Open
| Listings. How are you solving this?
|
| - Why are incumbent giants not building this? Are you worried or
| solving for some unknown pressure that stalls tech-realty
| startups in general?
|
| - Residential real estate transactions more often than not
| require some high-touch shenanigans due to things like liens,
| solar loans, inspections, contingencies, negotiations, etc... how
| are you solving for this?
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