List Your House For Free! That's Right. No, You aren't seeing things.

By
Real Estate Agent with Virtual Properties - Atlanta Real Estate 255736

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?

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Location:
Georgia
Tags:
mls
free
atlanta real estate
brokers
listing services
realtors
homes for sale
gwinnett real estate

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
33,573
Nalliah Thayabharan
Expert Building Inspections Ltd - Markham, ON
Home Inspector - Commercial Building Inspector Toronto

Hi    Joshua!

Thanks for sharing this info with us. Keep posting !

Nalliah Thayabharan

Commercial and Residential Building Inspector

Expert Building Inspections Ltd

Jun 20, 2007 10:12 PM #1
Rainer
15,745
Doug McAnally
RCP Realty Group, LLC - Calera, AL
Working Hard to Make your Experience Easier

Joshua,

This was a very good post. The public can only see the fee and they jump on it. The problem is when it goes bad they blame the real esate profession as a whole which further damages our reputation. Minimum services is being stretched to the max and the commissions have to step in and say enough is enough.

Doug

Jun 20, 2007 10:28 PM #2
Rainer
116,771
Paul Renton
Qualitas Property - Cape Coral, FL
ABR, e-Pro, CDPE, RERA, Prince 2, SMSTS

Joshua,

 

I am in Douglasville GA. I find out from my clients who come from discount brokers that they are paying $3000 - $4000 up front for a MLS listing,Sign & Flyers. I had a 7% commission objection, so I asked the client would he rather pay less upfront for minimal service or pay 7% and receive truly full service. His words 'No brainer,where do I sign."

Good post

Jun 20, 2007 11:17 PM #3
Rainmaker
224,127
Laurie Mindnich
Centennial, CO
Joshua- many consumers have had it with the bad real estate agents, so the online offerings are a way to avoid them.  If they've "had it" due to a few bad experiences, this is a good alternative for them (and for the agent- no one needs a seller with an anti-Realtor mentality).  While the numbers may prove contrary, for some, they may find success.
Jun 21, 2007 12:10 AM #4
Rainmaker
177,431
Lori Lincoln And Associates
Top Agent Serving Dighton Taunton, Rehoboth and more! - Taunton, MA
Top Agent Taunton,Dighton Rehoboth &more
I concur, most of them sit there overpriced.  Because of the lack of showings, offers are scarce. The sellers have  very little or no direction. You can spot them a mile away with the faded phone number on the yard sign.
Jun 21, 2007 12:23 AM #5
Rainmaker
190,655
Joshua Jarvis
Virtual Properties - Atlanta Real Estate - Duluth, GA
Moving Families Forward.

Laurie,

I don't have a problem with the offerring (I see that you are a discounter as well), in fact there is a place for that - as stated in the blog.  What I have a problem with, is the consumer goes into it blindly with no help and no obligation from the agency to say, "Look, this is NOT in your best interest."  At the end of the article I almost talk myself out of the post's point anyway. Again, you can represent yourself in court if you want to.

Other things you can do on your own:

Toothe Removal
Removing Your Own Tonsils
Fan Belt Replacement on your own vehicle
Dent Repair on your own vehicle

The list could go on of things most of us should not do ourselves... The point is that while there is a place in the marketplace for cheap service, there should be a disclaimer as there is in the legal system.

Jun 21, 2007 12:35 AM #6
Rainmaker
89,332
Paul Moye
Benchmark Realty - Franklin, TN
Broker, GRI, SRES

I tell my clients the truth we all "LIST FOR FREE" I get paid when I sell your property. If you think someone is going to work for free than let them and look at the results.

You are right Josh the statistics are the key to the success of winning this listing objection

Jun 21, 2007 12:38 AM #7
Rainmaker
224,127
Laurie Mindnich
Centennial, CO
Joshua- a DISCOUNTER?  HMMM.  Careful with the phrase.  We offer full service for fees that we deem reasonable to the consumers in our area.  You charge what you feel appropriate, we'll do the same.  Our disclaimer would simply read:  In following our own moral compass, we provide services that meet and exceed all present methods of marketing for a fee that we deem reasonable.  You're sounding a bit paranoid about companies that offer alternatives- let the consumer decide- it's not your call.  It's theirs.
Jun 21, 2007 01:43 AM #8
Rainmaker
190,655
Joshua Jarvis
Virtual Properties - Atlanta Real Estate - Duluth, GA
Moving Families Forward.

Laurie,

If you offer the same services I do then either your average price per home is much higher - and it would appear that it might be true or you're not making any money or working like a dog.

It may also be that in your market, your role is a diminished one.  From my understanding, specifically of buyer's agents in new york, their responsibilities are to show and write the offer.  Whereas in Georgia it's start to finish, no attorney to handle the closing coordination.

I was specifically talking about the - list your home on the MLS and be done - companies.  If that's you, be offended...  To not tell consumers that potential downfalls of having to represent themselves, is like walking into an attorneys office having them file the suit then getting to court and defending themselves.

I'm not paranoid.  I'm not targeting you, your response sounds defensive.

The no service companies allow me to stand out of the crowd when they come to me after failing and they also allow my current clients me to see what a drawback it is to use a company like that.  My current clients would all stand up in unison to say that not only did they get the best deal on a home but that their agent worked twice as hard as anyone they know (which is usually the case).

 

Jun 21, 2007 05:08 AM #9
Rainer
41,337
Endea Thibodeaux
Lanham, MD
Solar Energy Consultant, CDPE, CLHMS
I'ts amazing that people still fall for that free stuff!  Also they are willing to pay up front money for discount no service but most Sellers do not want to pay a Realtor a marketing fee.  If more Realtors ask for a marketing fee Sellers will be more loyal. Why is it ok for Realtors to put up all this marketing money for your home in the hopes that it will sell.
Jun 21, 2007 05:30 AM #10
Rainer
60,655
Dan Homan
Coldwell Banker Ellison Realty, Inc - Ocala, FL

My issue is with NAR.  The code of ethics says we are required to cooperate but not to compensate.  There are several out of area discounters who make their money by offering a $300 co broke with a $295 fee to be paid to them by the selling office - net to selling agent $5 - before split, E&O contribution and gas.  I am in the hole selling one of their MLS listed homes - is that ridiculous co broke ethical?

When the NAR tells me it is ok to decide what I will be paid then and only then will the playing field be level.  If I sell a home for a $5 co-broke, and have to do the work of the listing agent as well, I have a problem, particularly when the listing isn't doing their job because the consumer didn't pay them for it and to make the deal work I have to do what I'm not being paid for plus what the listing agent wasn't paid for.  These are problem sellers, who are going to be cheap and cranky throughout the entire escrow.

I have no problem with discounters, I just want to be paid what I am worth, and not have to bring a buyer broker agreement in and make it oart of the deal just because some slime bucket has a business model that says they work cheap, dosen't mean they should be able to make me do the same.

 

Jun 21, 2007 05:35 AM #11
Rainmaker
190,655
Joshua Jarvis
Virtual Properties - Atlanta Real Estate - Duluth, GA
Moving Families Forward.

Dan,

Unfortunately, that's why we need a buyer's brokerage agreement.  In Georgia, you have to have one with a CLIENT. 

$5 Co broke - Yikes, that means, "Mr & Mrs Buyer, this home is a special home, let's go over why we shouldn't see it and why if we really, really have to see it, what it will cost you."

You're worth your time and it's time to stand up.  There's nothing wrong with bringing up the Buyer's agreement, in fact, you should do that up front. 

We as agents will go on any appointment if we don't have enough people.  The trick is getting enough so you can make the people jump through your hoops. Then you're working with who you WANT to work with.  This market makes that a true luxury though.

I'm with you Don!

Jun 21, 2007 05:42 AM #12
Rainmaker
224,127
Laurie Mindnich
Centennial, CO
Joshua, you're actually right on one count (the properties pretty much begin in the 4's here), so we CAN afford to charge less.  I was simply responding to your discounter description.  I learned RE in a different state.  NY is actually worse than you assume.  The agents don't write contracts or anything to do with the transaction except for what they call a "BINDER"- takes two minutes.  I have done it "all", as you are currently doing, so understand it completely.  The thing is, an attorney and an internet company WILL get the job done (albeit, perhaps not in the way that diligent agents would like to see it done).  No problem agreeing that the internet is a dicey proposition for the consumer; just be careful with blanket "discount" statements, as not all companies are alike.  If a consumer wants that kind of service, we all have to offer up our own advantages, and hope that they see the benefit.  If they don't, the internet services provide another way to market a home.
Jun 21, 2007 06:56 AM #13
Rainmaker
468,988
Alexander Harb
Knights Investing - Mesquite, TX
Dallas, Texas Real Estate Investing

I think they at some point are going to get sued......... customer no serivce is prob a highlight for their company.....

Great post and a warning to show we NEED to give top notch service to our clients!!

Jun 21, 2007 10:30 AM #14
Rainer
103,309
Armando Rodriguez
QUEST REALTY SERVICES - Orlando, FL
Orlando Homes 4 Sale, Real Estate Broker-GRI

Our MlS systems lets us choose what type of agency gets paid. I only offer co-ops to transaction and Buyers agents. No sub-agent or non-rep get paid from us.

 

Jul 08, 2007 02:27 AM #15
Rainer
20,396
Mike Gambino
Prudential Patterson Realtors - Florissant, MO
GRI

Buyer Beware Seller beware, Realtors beware.  It would be sad to be out of business, because people believe that the job can be done cheaply.  Then when the market turns to where have a year or mores inventory.  Marketing costs soaring, just to try to find that 1 buyer out there, and only cheaper  more reasonable priced companies left; who now can't afford to market reasonably, who wins?  If the general population buys into all of this, it won't take long for there to be no real estate profession and the publics only choice for help would be lawyers.  ??????  Maybe lawyers are behind this!!

Disclaimer: None of the above statement should be considered visible and should be stricken from the record.

 I think that should cover me.

Feb 04, 2008 12:43 PM #16
Rainer
4,230
Andrea Steele Atlanta, GA Realtor
Jenny Pruitt & Associates - Marietta, GA
Great Post! People think because they are being charged less that they are walking away with a steal and that all Realtors just put a sign in your yard and put your home on MLS/FMLS and call it a day.  If a Realtor is truly representing their clients then they will market that home till it is sold in other ways other than putting it on MLS.  I really think people have this false notion that Realtors have the easiest job in the world and all they do is put a sign in the yard and then the home is sold and they have earned their comission, but as we all know oh how they are so wrong.
Mar 20, 2008 01:44 AM #17
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
190,655

Joshua Jarvis

Moving Families Forward.
Ask me a question
*
*
*
*
Spam prevention

Additional Information