WatchHow about a free page that lists houses for sale in a zip code in a column on the left, and buyers who want to buy in a column on the right? They would all be ordered by asking price or offer price, going from top to bottom.
Buyers would get an email of all new listings at or under their offer price.
Sellers would get an email of all new offers at or above their asking price.
So it would look something like this for each zip code:
Sellers Buyers
----------------------------------------------------
$200,000 42 Chestnut Drive
$179,000 for 3 br
$160,000 for 2 br
$159,000 18 Oak Court
$150,000 for 3br
What are problems with this approach, and solutions to those problems?
One problem is that sellers would be motivated to underprice, ie to list a price which they really would not accept, just to get the email to go out to buyers. That's also known as "lying" (unless you're a realtor, in which case it's just normal business practice).
Maybe I could fix that by encouraging people to comment about the lie on a forum page for that property?
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Los Angeles, CA
Are you rebuilding ebay?
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Menlo Park, CA
Yes, ebay for real estate. Why not?
Sellers would get free advertising, and a stream of emails from buyers with money. Buyers would get a stream of emails of new listings in their price range.
Just trying to figure out why it might not work before I put much effort into it.
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Yes, Why not, indeed.
The biggest problem that I see is getting people to sell on this site as opposed to MLS. It is a chicken and egg type of thing. A potential solution to that would be to get the house onto the MLS, preferrably with a link to the auction. I see that occasionally on redfin.
A minor problem is how to account for non-monetary factors. For instance, when everybody has a cashiers check, an auction is easy. When there are a bunch of contingencies, it would be hard to value. A potential solution would be for you to generate a pre-defined list of acceptable contingencies (e.g. financing, radon test, etc.). Then, the seller can state how much they value each contingency. For example if the seller values a radon contingency at $1000, for the purposes of the auction, a bid of $100,000 with a radon test as a contingency will be an effective bid of $99,000. Valuing a financing contingency is a bit arbitrary, because different people might be more flaky financially.
I say go for it. Run it separate from patrick.net & use advertisements. When it is big enough, sell it to ebay. Then, they will have regular auctions, cars, and real estate. Don't worry about 'selling out,' with adds. If successful, it will be a big kick to the Realtors pants yabbies, and will be worth it.
Maybe there is even some open source auction scripts available?
Another issue is the little lock box key thing. Is that Realtor controlled? People have to be able to look around & they might not be flexible time-wise.
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YesYNot says
Ha! Took me a minute.
YesYNot says
I'm thinking of just a free lead-generation thingy for both sides, to help them skip the MLS and the realtors and get in touch with each other directly. The transaction is too complex to really do an ebay-type auction online.
YesYNot says
I think I can just list houses that are being advertised on Craigslist to start. Craigslist will get extra clicks on their ads, so I don't think they'll mind.
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Patrick says
Local regulations forbid such systems. Ebay had BIG BIG Plans.. but local govt regulations have killed it.. Got to kill the regulations first.
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Patrick says
Its better to have face to face bidding.. it wouldnt eliminate fake bidders or crack pots.
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I watched a video this week about some guys that bought madonnas house and listed it on ebay - they had a fun ride.
Someone bid one billion dollars and won the auction! lol. This was in 2001 - then 911 happend and ruined thier auction. google that story.
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thomas.wong1986 says
Well, OK, not ebay, but just offers to sell and want to buy prices all put on the same page.
What regulation could possibly forbid that?
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Where is the value proposition for the buyer? I am a buyer. I'll tell you what I would value.
I would like an alternative to the MLS and an ability to buy without a realtor, more specifically, without the realtor commission. I think your website has a chance to pull it off because of your user community. Your user community is probably not big enough, but it may be big enough to start.
You would want listings that were highly searchable (e.g. house size greater than and less than, lot size greater than and less than, year built greater than and less than). You would want all of the search options of Zillow, Redfin, Zip Realty and Trulia and a couple more. Why? Because more and more of us are doing or want to do really intense research about our purchases. You wouldn't have to have all of the search capabilities all at the beginning, but each of those sites is lacking some search feature. Having those capabilities would give you an edge.
Second, you would need lawyers who offer flat rates (e.g. $1,500) for processing the paper work for the property purchase. I hate recommending lawyers for anything but the electric chair but it's too big of a transaction not to have your ass covered.
I’ve thought about exactly this kind of service before.
On a separate note, I think it is the kind of thing that might get funded if that is something you are considering. If you are thinking about funding, we could talk a little off line. There are definitely a few things you wouldn’t want to do. There is no VC in LOVE.
Biff
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Biff Baxter says
Thanks! That's pretty clear. So I see two components:
1. A list of houses for sale.
2. A list of lawyers who offer flat rates for property purchase paperwork.
The MLS systems most definitely will not share data, and violates terms of service to scrape them, so data entry is a problem. Perhaps there is some way to crowd-source it, where people would want to enter addresses and parameters of houses for sale.
It turns out that even listing lawyers is legally questionable, but as long as I get no kickback fee from any of them I think it's OK.
Biff Baxter says
Please send me an email about that. I'm p@patrick.net