Congratulations to Kelly and team for their new listing of this iconic 6,329sf masterpiece on the bluff by Wallace Cunningham – the same architect who designed the Razor House in La Jolla (that Alicia bought):
by Jim the Realtor | Apr 25, 2022 | Encinitas, Leucadia, Oceanfront | 6 comments
A federal government probe into the way real estate agents are paid during transactions could bring “chaos” to the industry, and Zillow’s co-founder and former CEO says CoStar is rooting for that chaos.
CEO-turned-investor Spencer Rascoff spoke about how the federal government’s antitrust probe into what is known as cooperative compensation between buy-side and sell-side agents could upend the industry.
If that happens, he said, CoStar has set itself up to benefit.
“So [CoStar CEO Andy Florance is] absolutely rooting for chaos,” he said. “It would be chaotic if a black swan were to happen like cooperative compensation to be banned by the government. Can you imagine? It could happen.”
“When all the cards get thrown up in the air and everything changes, that’s when new entrants emerge, and new disruptors emerge,” Rascoff said. “And that’s very much what CoStar is trying to be.”
CoStar became a leader in the commercial space before turning its sights on the residential market. It has become a data powerhouse and emerged as a significant competitor to Zillow. CoStar acquired HomeSnap in 2020. It followed up in 2021 with the purchase of Homes.com.
The concept of “dual agency,” where a broker represents a buyer and a seller in a deal, also came up earlier in the morning on Tuesday, when Zillow’s current CEO, Susan Daimler, subtly knocked CoStar without saying it by name.
“We believe buyers should be represented by a separate agent than the sellers,” Daimler said. “That is a very different philosophy than other platforms.”
Since leaving Zillow, Rascoff has remained focused on the growth and potential of iBuying. He also founded the second home co-ownership company Pacaso.
Rascoff’s most pressing message during the session involved the possibility that the U.S. Department of Justice changes the way that agents are compensated.
After the U.S. Department of Justice appeared ready to settle the dispute around whether agents could share pricing information with each other, it backed out of the agreement last summer and decided to broaden its investigation.
Among its targets were a variety of practices by the National Association of Realtors, including those around buyer broker commissions, access to competitors and more.
Rascoff compared the arrangement to Coke and Pepsi telling each other what they charge restaurants for their products.
“When you look at it that way, it’s not cooperative compensation,” he said, “it’s actually price collusion.”
“If they conclude that that’s problematic for two competitors to share pricing information in a secret database which we call the MLS, they might very well choose to prohibit cooperative compensation information from being posted in the MLS,” he said.
This is one of the biggest stories of what Rascoff called the third phase of modern real estate, which he said began in 2015. The first included bringing real estate listings online during the early days of mass internet. The second included giving consumers access to that online data through companies like Zillow, Trulia and Redfin.
The third and present phase of the real estate industry, Rascoff said, involves reducing friction in real estate transactions.
Rather than slamming CoStar, Rascoff appeared to give the company credit for its attempt to bring what he called the Australian or British model of real estate listings to the U.S.
“CoStar is legit, they’re not to be trifled with,” Rascoff said. “They came into the rentals space, guns blazing, they bought a couple companies, they’ve poured hundreds of millions of dollars [in] to grow the Apartments.com brand, and it worked.”
“They are now trying to bring that same game plan into the residential single-family space,” he added. “Will it work? Nobody knows. I think they have a shot.”
He’s way off base and doesn’t know enough about the MLS to make comments like this. Not only is every buyer-agent’s commission out in the open – even publicly now – they are so varied you couldn’t make the case that there is any collusion.
The listing-agent’s commission is never divulged, but does it need be public to ensure no collusion? No – there isn’t a connection when it’s never divulged already.
But then again, what do I know. From the class-action lawsuit against realtors about commissions:
At the class certification stage, Plaintiffs must demonstrate through evidentiary proof that, if Plaintiffs’ allegations are true, a conspiracy can be proven with common evidence. After conducting a rigorous analysis, the Court finds that Plaintiffs have met their burden. For example, Plaintiffs attach Defendants’ own documents, including Franchise Disclosure Documents and Subject MLS procedures, requiring compliance with NAR policies including the Challenged Rules. Plaintiffs allege these documents demonstrate that Defendants entered a conspiracy to artificially inflate commission rates for the entire class. Whether Defendants entered a conspiracy in violation of antitrust law creates common issues of fact and law common to the class. In contrast, Defendants do not provide any individual issues which would be more important than those common questions.
Crescent House, a California home with a pool shaped like a crescent moon, is hitting the market for $23.5 million.
Designed by the architectural firm Wallace E. Cunningham Inc., the Encinitas, Calif., oceanfront house was completed in 2003 for real-estate developer Arnold “Bud” Fischer and his wife, Esther Fischer. In 2020, the roughly 6,400-square-foot house was featured on an episode of the HBO series “Westworld.”
The current owners, Lance Williams and his wife, Eileen Quinn, bought the four-bedroom house in 2016 for $11.1 million. They use it as a vacation home and live primarily in Florida.
“This house is not just living in a home, it’s living in an experience,” said Ms. Quinn, who previously worked in finance. “You are living in a genius’s mind.”
Mr. Williams, a retired advertising executive, said they are selling because their family is on the East Coast and they want to spend more time with them.
> “The listing-agent’s commission is never divulged, but does it need be public to ensure no collusion? No – there isn’t a connection when it’s never divulged already.”
Unless the two agents arrange quid pro quo on the side. “I’ll throw a listing your way.”
Oh, now that’s old school.
Today we just want to kill each other!