WatchInstead of buyers searching for a house, maybe sellers should search for a buyer.
New feature on Patrick.net: anyone can now anonymously say how much they might be willing to pay for a house, how big it should be, and what zip code they want, using this link (which is also in the Patrick.net header above):
The buyer's anonymous bid then goes into a list of buyers, here:
Sellers can scan this list of buyers to see how much people are offering in their area. If a seller sees a bid he likes, he can reply with a specific address, promising that he would accept the buyer's offer amount. The reply gets posted in public in the forum, and the buyer gets notified of it.
The advantage to the seller would be not having to pay any commission, or stage the house, or even announce that his house is for sale before that. By making a comment on a buyer's offer, the seller's property will definitely be viewed by at least one interested buyer, and probably more.
The advantge to the buyer would be not having to pay any commssion or to deal with fake bidding wars. Buyers could see what other buyers are willing to offer in the area to get a more honest idea of the market.
As an added incentive to post an offer, you will automatically get notified of property for sale on Craigslist that meets your requirements.
Edited on 13 Sept to explain what I actually created.
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Ptipking222's website
Interesting idea to get around real estate agents. You'd need to be big in one area with a lot of sellers/buyers registering, which may be tricky.
The site could also allow sellers to just list their site publicly for a small fee. I think most sellers would want any publicity they can, so I mean, why not list it there too.
Also, I think real estate agents win on buyer/seller stupidity a lot of the time. Sellers will still try to sell for the same amount they'd sell with an agent, whereas buyers will not think they're really saving any money since they often don't think they're 'paying' an agent.
For example, if a house is going for $500k, instead of the buyer/seller agreeing on $485k (3% each), the seller will still probably ask for $500k, and well few buyers will really think they're saving money with the service.
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Ptipking222's website
I think one thing to make it better would be to explain the 3% haircut idea.
Say 'what do you think you'd list with a real estate agent, now subtract 3%, that's what you should list here' and then explain how both sellers and buyers save $15k in my above example.
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Oakland, CA
leo707's website
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I like it, but as Ptipking said, to make it work you would need a lot of buyers and sellers. If you overhead for starting it is not much I would say go for it.
I think that for the most part Pnet users are waiting for prices to fall, so many would sign up and put in "low numbers" for an area. Sellers I think would balk at what is being "offered" for their house, but I think it is probably a good thing for sellers to see. Perhaps then they would understand why their house has sat on the market for a year.
I am not sure what resources are currently available for the "for sale by owner" crowd, but I think this may be a good idea as well:
Ptipking222 says
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this is similar to Zillow's "Make me Move" feature for sellers (where sellers list some stupid high price to make them move).
instead this is a "Make me Buy" feature for buyers. you'll have buyers with ridiculously low prices saying they will buy a house in the prime area of Palo Alto for $150k, when comps indicate the house can sell for $1.5M.
no serious seller will bother using this feature because of the noise. just like no serious buyer looks at Zillow's "Make me Move" houses which are asking over bubble prices.
further i don't think i want any sellers contacting me. i hate people soliciting me for anything because they are always selling over priced crap. i would much rather be the one to contact the particular seller that i choose based on my specific criteria.
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Might be interesting if it catches on.
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Danville, CA
gregpfielding's website
I like the idea a lot of a "Buyer Wants" forum, but I think that the selling point has to be more than just avoiding real estate commissions. Cutting them out limits the market to a point where it would be inefficient.
Maybe the angle could be "I've seen everything currently for sale. If you have a property not yet on the market that meets my criteria, let me know."
As far as spam, what if instead each buyer request was a new forum topic and the responses were simply replies in the thread? No email spam...
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I think you'd get sued by the CAR, and possibly the DRE (with pressure from the CAR) for running an unlicensed brokerage. Of course, if you take nothing from each deal, you probably have a good defense.
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Well, it might be what many call a "Lead Generation". Prospective buyers come in, fill out criteria they are looking for (including the price).
Sellers would than be allowed to view those posts and contact potential buyers.
I'm not sure how any prices or any other details would be guaranteed though. When I told my RE agent back in 1992 what we were looking for, she didn't listen well... which is why we ended up going to just a word of mouth FSBO.
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leoj707 says
lol, Zilch. Nada. Nothing. MLS has cornered everything about real estate.
Patrick - I think that's a great idea. It's good you are thinking of fail-safe mechanisms to ensure the seller is legit and the buyer doesn't get spammed. May be some way to ensure that the buyer's bid is also legit would be nice.
I think what we would desire most out of such a system would be for everyone to see what would be the highest bid for a particular house in a certain area (info for the seller) and the lowest offer coming from a seller for the same house. bid/ask spread is thus visible for everyone and if anyone wants to close the spread can alter their bid/offer for the same.
As Carl Menger said, prices are never monolithic..there's always a seller for a buyer and there's always two prices (bid and ask).
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South Pasadena, CA
I'd like a $40K 1500 sq. ft. home on the north shore of Kauai. One can dream, right? :-)
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PasadenaNative says
I don't think you'll get many sellers contacting you for that one.
But I don't think silly offers like that will go away. After all, how is that any different from me asking you to pay 1 million for my (165,000) condo on Redfin?
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FortWayne says
This is what the Buyer Search should have the ability to filter. If there are no one else offering the price that the buyer offers, then he wins. Otherwise he loses. But at least the bid that's put in should be reasonable and not a stink bid.
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South Pasadena, CA
FortWayne says
I'm just a silly person being silly...helllo!
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Murrieta, CA
2/3 2000sq ft house in Murrieta At $140,000 with attached 2 car garage, single storey. I want all the latest stuff already in it, turn key no issues.
great Idea BTW.
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46 male
Menlo Park, CA
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OK, I'm going to do it.
It would be especially interesting to see bids and asks on one page, like the stock market. For example:
http://finance.yahoo.com/q/ecn?s=AA+Order+Book
I probably could not get the bids for a specific house, but maybe I could do it all by zip code and BR and that would at least tell more about the market.
Of course realtors are not going to like this one bit, since they make money by hiding or lying about bids so that the buyer never really knows the market for sure.
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Patrick says
This is a GREAT start....
Lets see bids from forum users, on how much they are willing to pay for a zip code.
You can even integrate this into property database.
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bmwman91's website
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I like this idea. As long as prospective sellers are given easy to use filter tools to narrow things into "their range" then it could work. While it is probably healthy for them to see what most people are willing to pay, they would need to be able to filter a little more to avoid all the nonsensical stuff.
Basically, sellers should probably be equipped with the same set of filter tools that buyers on Redfin/Zillow are. Perhaps they could be a bit more generic, like filtering just by price, zip code/city, property type & BR/BRs.
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Ptipking222 says
Ah, I leared about this the hard way. Yes, the actual seller does want as much publicity as possible, but the seller's agent does not necessarily want it.
The seller's agent first of all is dead set against any other agent advertising the listing, because that means free publicity for other agents. And it might also imply that the other agent is actually the seller's agent.
Second, the seller's agent often does not want the highest price -- for example when he's trying to sell it to a friend for a quick flip, or he's trying to deceive a bank about the market for foreclosures, or he's trying to get both sides of the commission for his own brokerage.
There's a huge amount of deception out there, and most of it is to benefit realtors, not sellers and not buyers.
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gregpfielding says
I like the openness of that, but then the buyer requests and seller responses would not be structured data. So it would be hard to search for all the buyers which conditions x, y, z, or all the sellers who replied to specific requests in a certain area.
But maybe there's some easy way to combine structured requests and responses with the forum. Like all the seller responses could be filed under that property's forum topic page, and the relevant buyers would get emails of that response.
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Best of luck with this, Patrick! You never know...
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San Leandro, CA
Might work. You will need to get a Seller's attention, How ? When you do, can you offer those prospective Sellers a list of interested buyers who are prequalified, ready, willing and able to purchase that property ? You only need to be licensed if you quote a price.
Sorry , here I go again thinkin like a politician or agent or bankster. Hypothetically; A real estate agent gets ahold of the list of BUYERS and sells it to his agents etc.
What is in it for Patrick.net ? "IN-OUT-RISK" ?
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TMAC54 says
The joy of helping people avoid realtors!
Well also, if it really got a lot of traffic, other advertising revenue could finally be good enough to live from. Or maybe I'd get more subscribers for my data service.
OK, so here's the current scheme I'm working on: potential buyers would give a max price, a zip code or city, number of BR, a type (SFH, condo, mobile, land), and a little blurb about what they want.
This "house wanted" listing would be completely anonymous. Not even the forum user name, because if that were public, then realtors would be spamming them on the forum with "friend" requests to get their email address.
A seller would then search and see how much potential buyers are offering in his area, and if a potential offer looks high enough, the seller could reply to that anonymous buyer post with a specific address for sale and promise to sell it for that price within 30 days. Just a promise, nothing legally enforceable, but you'd know right away who the shits are if they broke their promise. And they'd go on a shitlist on the forum as someone who is definitely not trustworthy, by physical address, IP address, and email address.
Now the question is, should that advertised offer to sell be public on the forum (benefitting all buyers), or sent only to the buyer (benefitting only him)? I think it should be public, to benefit everyone, and also to show I'm not anyone's agent. Just an advertiser who requires a promise that the seller tell the truth about the price they would sell for.
I'm pretty sure this does not require any license because:
1. I won't charge anything for it.
2. I won't ever have anything to do with any agency contract, or even know who the buyer and sellers might be, or whether any transaction happens at all.
3. It's really just advertising, in the same way that Craigslist advertises places for sale, and advertises "housing wanted" too.
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Oakland, CA
leo707's website
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Sounds like a good plan.
I think that sellers might like the idea of the offer to sell being public, if they could then accept higher offers from other forum members. Not too cool if you are a buyer, but it might be an incentive for sellers to use the system.
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San Jose, CA
Actually, it sounds like a good business plan to me. It seems like a modified and much more useful version of the Craigslist real estate section to me. Good idea.
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Ebay for real estate - only pre-qualified/approved buyers can bid and seller can set reserved price if they wish. Redfin should add this feature.
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46 male
Menlo Park, CA
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OK, a primitive alpha version is available. To make a bid, use this:
http://patrick.net/bid.php
To view all bids, use this:
http://patrick.net/bidders.php
To respond to a bid, click on REPLY at the end of any bidder line.
I'm sure it still has bugs, and it needs lots of features, like automated notifications of new bids in your area, and the ability to register at the same time as you bid or reply, and the ability to end your bid.
Anyway, please try it out and let me know how else to improve it. Then I'll announce it in a few days when it's more polished.
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leo707's website
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Patrick says
OK, I will put in a bunch of fake bids/offers to give it a try, and give you some feedback.
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Oakland, CA
leo707's website
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Some feedback.
Issues:
General Bidding:
• The "Yes, I promise to sell the following 3+ BR SFH in zip code 94025 for $600,000 immediately:" may be a little strong. What if there are mitigating factors, what if the buyer drags their feet? Someone else here probably knows better than me what types of contingencies a seller would want.
• May want to bump up your “nothing is that cheap” response to at least 1k, but then again haven’t there been some stories about homes in Detroit going to $1.
Bidding:
• Your zip field accepts more than 5 characters, and just cuts off any extras; this might cause “false” bids if someone hits an extra letter without realizing it.
• Not sure if this is a big deal, but land listings can also have bedrooms.
• The edit function does not work when trying to change the bid. I just lets you do another new entry.
• The edit button is seen for bids entered by other people.
Replying:
• I was able to reply to a bid using an address that had a different zip code than the bid was requesting.
Features:
• It would be nice to filter for just my bid(s).
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46 male
Menlo Park, CA
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Thanks for the excellent QA! I bet I can have all those things fixed sometime tomorrow.
leoj707 says
If the buyer drags their feet, the seller doesn't have to sell it to him. Whoever comes up with the money first should get the house.
What I really want to do is let buyers avoid the situation of blind bidding, which we have now. The seller should feel obligated to accept his asking price.
There's probably some better way to put it. I don't want to offend sellers, but I don't want them to dick around with buyers as usual either.
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Looked at your search and been houseshopping. The biggest problem for me as a buyer is the sellers/agents who waste my time. Don't disclose serious flaws like mold, water damage, overstated square footae, sinking foundations, etc. I think buyers need an opportunity to share this info w/each other in a clean, organized manner. I know people can try to shoot other buyers out of bidding, but there's got to be a way to do this.
Also, I think you need more data points - lot size, garage size, proximity to busy street/freeway, whether energy-hog systems have been updated (windows, HVAC, etc.), whether expensive-to-replace systems are at the end of their usable life (roof, HVAC). I could say I'll pay $1 million for a 2-BR house over 1k sq. ft. - but it would be a waste of everyone's time if the sellers take that to mean I'll pay that for a house with mold, leaking roof, all original 1950 fixtures, next to freeway. I can paint and replace a stove, but there's a value difference between move-in-ready and tear-down-ready (but you COULD fix it up if you wanted). Most of the languishing inventory is priced the same as neighborhood sales, but it would cost 40% more to get it to comparable CONDITION, let alone desirability.
Those are the variables that affect value, but NAR likes to keep things opaque to protect their monopoly. Put real transparency into the market and you'd rake in buyers.
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46 male
Menlo Park, CA
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Ah, that's the the forum is for! If you search for any address in America, it should pop up on its own page, and you can say anything you want about it, as long as it's true or just your opinion.
I can't make a simple search function that would let you know if there is mold or water damage, etc, but the first person who actually looks at the house could document that damage on the forum for other readers to see, to save them time. All the seller replies to bids go on the forum under that property address, so you should see the offer to sell right on the same page with the user comments.
How to get everyone to comment about specific houses on the forum is the hard part. I don't want to drive away sellers with harsh comments about a house either. I just want them to be honest.
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46 male
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OK, most of the problems leoj707 found have been fixed. You can edit or de-activate your own bids, and not anyone else's.
Please try it again, and try to break it. Any way you can break it is something I must fix.
I will allow search for own bids soon.
http://patrick.net/bidders.php
http://patrick.net/bid.php
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I put up my bid....the hardest thing is going to be getting a lot of people on here. Once it's up and running, you need to get everyone to spam facebook, twitter, craigslist, etc etc. If it did start to grow, and you put some ads up for income, I would spend that on paid advertising if possible.
I think there is some merit to this idea, but if it grows I would not be surprised if the NAR came down on it somehow.
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Yes, I need to figure out some viral loop which gets it off the ground. Each bid and each reply needs to encourage people to post more bids and more replies.
How would I use Facebook, Twitter, Craigstlist etc for that exactly? I don't quite see it yet. Would each bid go on your Facebook page?
A lawsuit from the NAR would be national news, so it would be wonderful advertising.
I've already heard from NAR lawyers once, where they objected to my using the word "realtor" without their permission.
Or maybe the NAR will learn to live with the First Amendment. After all, public bids might actually help them sell houses.
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In terms of using social networking, you need to start posting it, tweeting it, etc etc
Do you have a patrick.net account on FB, Twitter etc? That would be the first step. Have all of us Pnet guys start following you, starting interactions with you, and then we start posting/tweeting etc about this site and the bidding function. From there you hope people stop by, like what they see, post bids and offers then go back onto their FB/Twitter and spread the word.
The most important part is it has to be badass and something that people want to use and DO use....from there the word of social networking will expand it
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Patrick says
It'll be hard to ask a buyer to submit their "highest and best" offer without even seeing the property. That's just setting themselves up for failure.
The bids will probably be lower. Sellers need to be aware that the prices are just a general range. I'm sure the buyers will try to shave some more off that price after seeing the property.
This completely turns the table against the seller it appears.
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vain says
It's not a bid on any particular property!
It's just the most the buyer is willing to pay, so that sellers know the most they could possibly expect from this buyer.
The idea is definitely to turn the tables toward a fairer deal for buyers. Currently, the system is VERY unfair to buyers. They are told to participate in a blind auction, with absolutely no way of legally distinguishing shill bids from real bids.
Much better to start out with a fixed maximum amount the buyer would pay, IMHO.
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Patrick
Love the idea but have two comments
1) In using this service, everyone knows what areas a patrick.net member is looking to buy in. (I know I'm paranoid about keeping my personal information, well... personal having to public disclose a zip is a deterrent, at least for me)
2) How do you plan on mitigating the potential for scamers to use this service for personal gain? Unfortunately, I the system has great potential for misuse / abuse at the moment. (there's that paranoia of mine kicking in again!)
That said, I hope it works for you. Keep up the good work, and keep the ideas coming.
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Thanks for the feedback! The bids are anonymous. No one can tell that the bid is from to you. It doesn't have your icon or username attached.
Of course if you talk about a certain area on the forum a lot people might _guess_ a certain bid is from you, but they'll never know for sure unless you say so.
How could scammers use this for personal gain? I don't see it, but I'm sure there are angles I haven't considered.
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bmwman91's website
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Patrick says
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Please respond to me with urgency. If I do not cash this cheque soon, the clique mob will come for me again!
Sincerest,
Norman P. Bidwell
nigerianladiesman@thisisnotascamtrustme.com