I recently had a potential client e-mail me and tell me her home was on the market. She was very proud to have her home "listed" and was wondering if I could assist her with finding a buyer and a home. Usually, I play along with these e-mails. If the potential client is with a discount broker (no offense to those who discount) then 9 times out of 10 I will end up with the client because the home fails to sell. I'm clear on ethics here because the client pursue me and I do not offer advice while they are under contract, (rambling now) which in turn makes them want to talk to me more.
Here in the Atlanta Real Estate market there are several discounters. Although, they have heralded success in listing vast numbers of homes, their Sale Price to List Price ratios are awful and their days on market are horrendous. Dealing with these companies can range from pleasurable to a pain as they are non-existent during the transaction. Overall, the transactions work out great for my buyers. On average, I save my clients over 6% on homes listed with a discount broker (It's half that with home listed with a Real agent).
I wrote all that to bring up Iggy's House (I'm not going to link to them, do a search, you'll find them). Here's a snippet from their website:
why we do it for free
It's simple. We're out to change the real estate industry. We believe people who want to sell a home themselves should have free access to the same tools real estate agents use to reach millions of buyers.
We don't think sharing information should come with a price tag.
how we do it for free
In April 2006, we started to change the real estate industry by launching BuySide Realty, a revolutionary real estate company. We believe that people who find the home to buy should get paid for their effort. So BuySide actually shares with the buyer 75% of the commission it receives. In 2006, the average BuySide customer received over $11,000that they otherwise would never see. BuySide keeps the other 25% for providing expert advice from the offer through the closing.
We realize that most sellers are in the market to buy a home as well. By giving people free tools to sell their home, we believe many will turn to BuySide Realty when they are ready to buy.
Legal and ethical ramifications aside. Heck, I really want to ramble on about how minimum standards is actually protection of the public, but hey, companies like this make my job easy. Here's why, as I go on a long ramble and tangent.
Whenever I am competing with a discount broker, I bring along MLS statistics on home sold. It's a pretty awesome presentation when the seller sees, "The Jarvis Team nets you 98.1% of your home price, vs. the average discounter who nets the seller on average 93.7% in Gwinnett County." Furthermore, on a cynical note, the discounters weed out my C and D clients that wouldn't value my service anyway. In the end, when most of them fail, they will be ready to have someone walk them through it.
What's unique about Iggy is that they're doing it for free. This sets up a whole new situation for consumers as well as Realtors. In my marketplace, Realtors have started to identify discounter listings and either attack the consumers or avoid showing them due to the hassle.
This new company has transactions where everything takes place on-line (ala Redfin too). One writer to Inman wonders what the company will do in California where the agents sign a disclosure about the property there. Talk about customer no service. I'm also wondering about the precedent here. If they can do this for free, why wouldn't we just open our MLS services for free to the public, in essence that's what this is. Except, now the consumer is trapped to use a company for buying services and doesn't have any real representation.
What do you think?