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.
Now ... an AI powered tool to helped realtors and buyers communicate, schedule, track progress, .... that would be a great application.
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
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?
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.
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.
>> 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.
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?
There are sellers out there that already do instant tour unlocks. There are also companies like Redfin that tried to attack this problem but I think are still struggling to fully crack it. You only mention that rates are negotiable, there is no way I am using this kind of service unless you offer drastically lower rates. That was the attractive part of redfin, they automate and standardize as much of the workflow as possible and can work with lower rates for that process. I don't care about an OpenAI chatbot that can send me some listing information via text message.
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.
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.
The problem is the monopoly realtors have. Regulate it better, or break it up, and the market can definitely handle the rest.
The need for an "agent" as such becomes an unnecessary cost, if you can get an "associate" from the equivalent of airtasker, with insurance covering their liability to do the "showings" for you, while AI can deal with most of the email or other notifications.
Would allow individuals to run their own auctions to achieve the best price, deal with the settlement and title transfer.
Make it a fixed cost service, not based on the house valuation, so that there is no incentive to manipulate suggested prices, but base it on algorithmic evaluation.
Love the idea of AI battlebots in such exchanges in the future, but the legals better be tied down.
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.
> then reviewed by an attorney at no additional cost.
So how do you make money?
One question/quibble:
How is the data collected from buyers kept isolated and secure?
Is it used to "personalize" algorithms related to offer suggestions, or will all users be guaranteed equal offer proposals?
I guess to summarize, how transparent will you be about your offer suggestions and AI driven analysis?
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 :)
I'm sure you are already working on this, but it would be nice to be able to filter my search by various criteria (e.g. Beds/Baths/Price/Square Footage). Since you guys are an AI company, this could even be freeform (e.g. what are you looking for?)
And also potentially to be able to save multiple searches.
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.
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
Just thinking about a few transactions that come to mind...
1) We've got a feud over two trees and had to call in an arborist and a structural engineer.
2) I've got an orchard with a ROFR and a big city lawyer on the other side of the deal, on a property with a disused fuel tank and questions about former pesticide use.
3) A house where the deal only got done because the other agent and I each threw in 1% of our commission to bring the two sides together.
4) A ranch property where there are water rights that need to be cured and where the tenant is telling lies to prospective buyers and need to be evicted.
5) A neighbor who keeps suing people to stop a bridge from being replaced because he wants to force them to sell their properties and doesn't want anyone accessing their properties.
6) A lodge building zoned residential but that has been used for commercial purposes for decades that has a seasonal spring (yes water) that pops up in the basement.
7) A cute craftsman home with an oil tank buried in the backyard.
8) The seller tore out the carpet when they exited 4 days post-closing and left a giant pile of garbage in the driveway.
I'm just throwing out some example transactions here to demonstrate two points:
A) When people make comments about "normal" real estate transactions or why Realtors aren't needed, to me it signals they know jack shit about real estate. If I get one deal a year that is "easy" I consider it very lucky. I do not see how we automate away all of the crazy things that humans do to their properties.
B) At 3% my services are cheap. In the two states where I do business, I'm held to the same standard of practice as a lawyer, plus I'm a marketer, a home stager, a photo / video / drone expert, a land use and water rights expert, an economist, and half a dozen other things in order to provide a professional level of service to my clients. Only to be constantly told I'm just a useless cog who will soon be replaced. Well, good luck to y'all, have fun suing each other.
-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.
Really should review submitting to ycombinator in the future :) always feel my ideas aren’t good to pursue.
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?
One of the problems that is affecting our real estate market is the domination of two websites, the Murdoch owned realestate.com.au and the Nine owned domain.com.au
https://www.theguardian.com/australia-news/2024/sep/19/the-b...
They both offer different advertising rates for agents than for individuals and lean on agents to purchase "packages" with a discount but an guaranteed number of properties.
So now there's a new oligopoly that started as a service to buyers, then a service to business, now is extracting as much of the value of the market to itself.
A classic case of "enshittification".
In order to trust the AI I’d have to learn everything myself anyway. I don’t have time for that.
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.
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.
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.