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by malandrew 5012 days ago
My mother is a real estate agent and worked in both NY (westchester county) and NC (raleigh) and I grew up helping my mother with myriad activities necessary to list and sell a house

You'd be surprised how much work is required to keep the real estate market liquid. I'd say half the work is necessary, some automatable, some not so much. However, a lot of the work doesn't even have much to do with work necessary everytime a home goes on the market, but rework that is repeated every time a listing goes on the market. A listing that was on the market last year that goes on the market again this year needs all the same work done to get it sold.

Here's just a sampling of the types of things that need to be done on every sale:

-- finding inspectors and getting inspections done

-- getting radon tests done (difficult to schedule since house needs to be vacated if I recall correctly

-- showings (how to show a house, how to talk about it. how to sell a lifestyle, especially in a home with no furnishings)

-- fixing things, which is often dependent on contract negotiation. Sometimes things that need improvement will be deducted from the price, other times fixing them will be a requirement to close the deal.

-- home staging. for homes with no furnishings, companies exist to stage the home, especially for open-houses.

-- disclosures (near an airport? did someone die in the house? carcinogenic chemicals on site before construction?)

-- proper photographing, which is hard for most people because photographing homes that will generate interest isn't as trivial as you may think. One of the biggest issues with photographing was lighting both inside and out. Most agents don't carry lighting necessary to photograph homes. Some homes have built in lighting, some have lamps. Those that use lamps may not have any because furniture has been removed. Most agents aren't technically competent enough to handle a camera more complex than a simple point and shoot. Outside lighting for homes requires planning to make sure the weather was nice and that at least the front of the house was lit, which itself depended on which direction the house faced (north, south, east, west). Getting the photos from the camera to MLS and creating brochures with them is complex for many people.

-- MLS management

-- Searching of the myriad criteria that people evaluate a house on (schools, commute, etc.) Everyone has different lifestyles and needs. The criteria for one client will differ dramatically from the criteria for another client.

-- centralized showing

-- lock box management so other listing agents can show a house.

-- scheduling

-- Knowing whether a house is a good deal or not. Your agent is essentially your negotiator. A good agent will not only find you a home that fits your lifestyle, but they will help you negotiate with the seller/buyer on your behalf. This is probably where the fees are most valuable.

-- Negotiating with a bank. You have no idea how many deals these days get blocked by a bank, especially if the home is underwater.

-- floorplans (bonus points if any startup makes it easy to mash up floorplans to room photos, the same way that people mash up photos with latlng data and maps).

-- ability to simulate your current belongings in the new home? Do you have too much stuff? Not enough stuff? What fits? What doesn't?

-- Architectural vocabulary enlightenment. What's the difference between a victorian and an edwardian? What are dorian columns?

-- Energy efficiency of a house? What are the bills and utilities the previous tenant paid?

-- Hooking up utilities in a new place. Can it be streamlined?

-- etc. etc. etc.

This is all just the tip of the iceberg. I don't think there is a one size fits all solution that can automate all of the above, but there is definitely room for a few dozen startups and that you could essentially create an entire VC fund with real estate as your thesis. TBH, I think that is the only way "real estate" will ever be solved. There are way too many moving parts to have everything solved by one company. APIs are necessary for solving the problems above.

Finally, NYC and SF are very very very weird markets by real estate standards. Most markets are fairly balanced, but both NYC and SF are heavily skewed in favored of sellers. This makes them very unusual and I can't imagine a solution that works for those two markets working in other markets.

5 comments

Most of the work that you are referring to pertains to real estate sales. I believe the original comment regarding the $3K and NYC brokers has to do with leasing agents/rental brokers.

I was a leasing agent before; there's really nothing to the job.

True, I realized that it was rent-centric after I posted this comment. However, I felt it was worth leaving up because it highlights that there are a lot more activities involved than people imagine. I will agree though that more than half of the items above are real estate centric. On top of that NYC and SF agents have to do less than anyone else insofar as actual tedium work is concerned. Apartments practically sell themselves in those markets, so agents really only have to work to stay "in the know" to be able to show you the best apartments before it goes on the market.
I am a current leasing agent; there is a lot to the job.
I'd love to hear how your responsibilities as a lease agent compare and contrast with the list I wrote above for a buyer/seller agent.
Even though I understand your point about real estate brokers, there is a huge difference between a broker who is helping you buy a home vs. a broker who is helping you rent. You are talking about the buy part which of course involves all that work. But when it comes to renting, I doubt any broker has that much on their plate.
Ugh, no way.

From what I understand Toronto is a fraction of the craziness of the New York market, and here any listing would get snapped up pretty quickly no matter where you might post it.

That's an outstanding list of problems that are all amazing start up ideas. This is where real estate can really be disrupted.

These guys, http://bermanvc.com/ are really smart. They invest in real estate related technologies and even invested in YC alum 42floors.

Most real estate startups are complete and utter crap. I've used dozens of pieces of software targeted at real estate agents and I can't think of a more broken software market. It's truly shameful.

Usability is among the worst you will find. This is particularly egregious since RE is filled with some of the most technically incompetent people you've ever met. Some real estate agents are fantastic and have found their calling in that job, but the overwhelming majority of the ones I met ended up in that industry by accident. I tend to joke that if you're too incompetent for all other careers, go ahead and get a real estate license.

One of the biggest problems is that not one solution I've ever used considered flow. They solve small pain points, but none are workable into the more complex workflows that need to be accomplished.

Do you think it's actually crucial to go out and obtain a broker license myself to understand the pain points? I'd love to avoid the pitfalls that most startups have already made.
You won't see 90% of the pain points above without one. However, with the list above and access to real agents, you can probably work your way through being aware of and understanding many of the pain point.

If you really want to understand how an agent works, focus on their calendar. 90% of their work involves coordinating many activities for a listing. You can also try to get ahold of sample files for east listing that brokers will keep (they are legally required to keep them for 7 years in NC. I expect a similar requirement elsewhere).

In short, no you don't need to get a license, but you need to be a Sherlock and know what questions to ask to gather all the evidence you need.

Maybe not license, but a 60 "hour" standard broker training course (book and web videos to fast forward through) is worthwhile to learn the basics.
Thanks.
Redfin has excellent UX, both on iOS and the web. We've been using their tools for the last three years, with consistent delight.
Redfin and Trulia are both the exception. There are dozens of businesses that target real estate that you've never heard of, mostly because they aren't B2C like Redfin and Trulia.
Thanks for the reply. I'm trying to build something to help with the automation and would love to have a chat with you sometime if you're available.
Shoot me an email. It's in my profile.