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Would You Pay A Seller To Get Their Listing?

By
Real Estate Agent with The Gasset Group & Get It Done For Me Virtual Services 13253167-SA00

We have seen different real estate business models come and go over the years.

 

Some business models work better in certain geographical locations than others. 

 

Real Estate Agent Training

 

Companies like Zillow, Trulia and Homes.com came on the virtual scene in 2006 and after. Google attempted to do Google Real Estate and had a map with a lot of the istings called Google Base. They closed it down a while ago. 

 

Discount brokers and reduced fee agents and buyer rebate agents started promoting their services online followed by Redfin who has a discount model that includes paying a salary to their agents. 

 

In our market none of these companies have made a foothold. Zip Realty opened up an office here and closed it down not long after they opened. 

 

Flat fee companies have started here but after a few months we don't hear from them again. 

 

Then there is that Craig Proctor marketing strategy of buying the listing if it does not sell in 90 days. That model won't work well in high end markets. 

 

Have you ever thought about paying sellers for their listings?

 

There is a real estate broker in our market who has started this new business model.  What he is doing is offering to pay the sellers for their listings. He pays for the listing on a sliding scale based on the value of the house. The payments go from $300 to over $10,000. Even if the property does not sell, the seller gets to keep the money. 

 

The listings do need to meet with his business model framework, I would think that he has stipulations like motivation to sell and the house can't be a huge mess and smell like garbage or pets or smoke. 

 

If the house does not sell, they seller gets to keep the money that the broker paid to him. There are no strings attached. 


The sellers do have to sign a 6 month listing agreement to qualify for the payment and they also must agree to a commission % he has specified upon selling the property. 

 

He is financially stable enough to be able to carry this model for a few years because he knows it will take a while to return a profit from his model. I am thinking you would need at least $1 Million to work with to make this model work. 

 

He has let the real estate commission know about his business model. He has requested them to give him a declaratory statement which they have not done yet. They also have not said he can not do it. His attorney will have to keep working with the commission on this part of the business plan. 

 

What say you? 

 

 

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In real estate we service Utah County, Salt Lake County, Wasatch County, Tooele County. This includes many towns and cities. Some of which are: Provo, Orem, Salt Lake City, Draper, Springville, Spanish Fork, Payson, Lehi, American Fork, Vineyard, Saratoga Springs, Eagle Mountain, Pleasant Grove, and more. 

Katerina Gasset is a real estate agent who is also a digital marketing strategist, website designer and consultant for real estate brokerages, agents, entrepreneurs and small business owners. She is also the owner of Get It Done For Me Virtual Services. 

Katerina is a Certified AI Marketing Specialist. She can help you with ChatGPT, Content at Scale, Neuronwriter, prompting, and many other AI tools. 

She develops products and online courses to empower real estate agents to reach their marketing, SEO, social media and branding goals. Katerina Gasset is a blogger, author, podcaster, and keynote speaker.  

Text Katerina with your name + number to work with her:

 561-502-1577 

 

 

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Comments (26)

James Dray
Fathom Realty - Bentonville, AR

Good morning, I follow Barbara Todaro so that is how I found you.  Keep us updated on if this works or not.

Jun 27, 2016 08:34 PM
Barbara Todaro

James..... you NEED to follow Katerina.... Nestor & Katerina Gasset .... your following me is like the blind leading the blind, my friend.... take this advice from me....and I never say that to you!!

Jun 27, 2016 08:42 PM
Katerina Gasset

Thank you Barbara Todaro 


James Dray I will be following his model. 

Jun 28, 2016 12:53 AM
Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Very interesting concept, and it's one very few could follow.  I wonder, though, if it attracts the ideal type of client.  (or maybe that doesn't matter since it's a numbers game.)

Jun 27, 2016 09:27 PM
Katerina Gasset

Debbie Gartner  The main issue is that most brokers would not have the financial backing it would take to make this model work. Yes, I also wondered how many sellers would abuse the model just to get a buck. But I am sure his attorney has created some good contracts to try to nip that one. 

Jun 28, 2016 12:55 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I had never heard of this until I read  a reblog by Barbara. Thanks for the post.

Jun 27, 2016 09:39 PM
Katerina Gasset

Thanks for coming over! Gita Bantwal 

Jun 28, 2016 12:55 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Nestor & Katerina Gasset ,

Interesting concept and may work for this Broker. So many new innovative ways to try and capture the market place. I'll stick to my continuing to gain my market share in my way!

Jun 27, 2016 10:06 PM
Katerina Gasset

Dorie Dillard Yes, great ideas can turn into successful business models. 

Jun 28, 2016 12:56 AM
Raymond E. Camp
Ontario, NY

Good morning Nestor and Katerina,

Would be interesting to see the pricing criteria.

Make yourself an astonishing day.

Jun 27, 2016 10:21 PM
Katerina Gasset

Yes, Raymond E. Camp  It would be interesting to see the criteria! I know his commission rate is the same as many of us, however, I would not say that in the post. His length of contract is 6 months. But I would also say there would be criteria such as, keeping the house clean, showing the house on a reasonable notice, etc. 

Jun 28, 2016 01:01 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Hi Katerina, do you know the percentage of the commission the advance payment is? If he pays 10% of the commission then if he sells one in ten he will get his money back. Anything more than one in ten will be profitable. 

I like the idea.

Bill Roberts

Jun 28, 2016 12:04 AM
Katerina Gasset

Bill Roberts Wow! A math man! That is awesome! You just looked at this from a different angle and I am now sure that is how he is looking at his model. I don't know what % it is - he said each house would be between $300 to $10,000. So I am thinking 10% of the commission is being paid up front. 

Jun 28, 2016 01:08 AM
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

Nestor & Katerina Gasset, Real Estate Agent at (561) 753-0135 to Port St Lucie, FL Real Estate with International Properties and Investments.

Jun 28, 2016 12:22 AM
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

This is an interesting business model!  But not for me.  He would have to pick up a lot of buyers off each listing to make it work, and I'm not sure how I would feel about lisitng my house with someone whose business model meant my agent would use it for buyer bait.

Jun 28, 2016 10:42 AM
Katerina Gasset

I had not thought of that Patricia Kennedy  But don't many agents get buyers from open houses they do for their sellers? :) 

Jun 28, 2016 11:08 AM
Patricia Kennedy

Many do, but picking up buyers isn't usually the primary focus of their marketing efforts.

Jul 03, 2016 06:08 AM
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in Southern RI and beyond

Katerina, what will they think of next!  Fascinating & deep pockets involved especially with higher end properties.

Jun 28, 2016 09:46 PM
Katerina Gasset

Yes, Ginny Gorman  you would need a healthy bank account to make this work in the higher end market. 

Jun 28, 2016 11:36 PM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Not long ago, I closed a sale with an agent who offers to sell his client's homes for free. No commission charged. The only requirement is they must also buy with him. I thought for sure there was a catch. That is, until I saw the closing disclosure with zero commission paid to him. He carries a lot of listings. His team will probably close over 500 transactions this year.

Jun 29, 2016 09:48 AM
Katerina Gasset

Yes, I have seen that model before. My question is what if the seller is moving out of the area? I can see it being very successful if they move up or down in the market he works.  Thanks for sharing. 

Jun 29, 2016 01:03 PM
Tammie White, Broker

I've often wondered that myself but have never asked. The next time I have a transaction with this guy, I'll do that.

Jun 29, 2016 01:09 PM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

I would be interested to see how long this brokerage is in existance. The appeal to the home owners could be great. Whether it works or not would be another.

Jun 30, 2016 01:32 AM
Katerina Gasset

Evelyn Johnston  Yes, I am interested to see that too. 

Jun 30, 2016 11:08 AM
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

This is a very interesting concept. It's not for me, and I'm still pondering how this would go over with sellers in my rural market. I think most would like it. 

Jun 30, 2016 09:00 AM
Katerina Gasset

Debbie Laity  I think they would like it in your area. It is a great concept. But you have to have deep pockets to stay with it until it pays off. 

Jun 30, 2016 11:09 AM
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

In a way, this reminds me of the early days after AT&T was broken apart. Various long-distance carriers would pay you to switch to their service - $50, $100, or more. A few months later, another offer to switch would arrive, and more bucks could be earned.

Jul 02, 2016 11:38 PM
Katerina Gasset

:) Lottie Kendall  Happy Independence Day! 

Jul 03, 2016 09:10 AM
Matt Brady
Watermark Capital - Del Mar, CA
One of San Diego's Best Equity Advisors

I do not see any difference in paying up front or discounting your commission. Redfin is in fact buying the listing by offering to sell it for 1%.

 

Jul 02, 2016 11:52 PM
Katerina Gasset

Matt Brady  Very interesting! I like how you related the two. 

Jul 03, 2016 09:09 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

This is called cash advance.  An new agent signed a listing with the condtion she foot the bill for staging. 30 days later it was cancelled. The agent got clubbered with a staging bill. Spending $300 cash to get a listing is not bad....

Jul 03, 2016 01:16 AM
Katerina Gasset

Not bad at all. It is definately interesting. Sam Shueh 

Jul 03, 2016 09:09 AM
Robert Vegas Bob Swetz
Las Vegas, NV

Hello Nestor & Katerina

Great post and what a privilege to be included on the same post as your for Pat Kennedy's weekly favorites.

Jul 03, 2016 04:35 AM
Katerina Gasset

Thank you Robert Vegas Bob Swetz 

Jul 03, 2016 09:08 AM
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Nestor and Katerina, I included this post in today's Last Week's Favorites.

And I hope you enjoy the rest of your holiday weekend!

Jul 03, 2016 06:06 AM
Katerina Gasset

Thank you Patricia Kennedy  for including my post in your Last Week's Favorites! 

Jul 03, 2016 09:04 AM
Patricia Kennedy

You're welcome!

Jul 03, 2016 09:17 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

That's definitely an interesting approach. It certainly gives the broker a good incentive to get the job done! 

Jul 03, 2016 06:38 AM
Katerina Gasset

I think so too. It is very interesting. Marte Cliff 

Jul 03, 2016 09:08 AM
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Wow, that is an interesting concept!  I can see how that could work and be profitable.  Paying between $300 and $10k, I wonder the range of home values in the area.  I can't see $300 being enough to really interest a seller though. 

My thoughts on this is since you mentioned the "seller must agree to a specified commission %" are that he charges a full rate or higher and passes on less than half to help offset the cost of the listing, which he can also write off.  Pretty ingenious.  Wonder if it'll work for him in the long run.

Jul 03, 2016 08:35 AM
Katerina Gasset

Ryan Huggins - Thousand Oaks, CA  He is in a very high end area but not all his agents work the high end. So I am thinking $300 would be for small condos that sell for $30,000 and then $10,000 would be for a million dollar listing. I think you are right. Since we can't talk about fees, let's leave it to say its a "full rate". The newspaper gets to quote that that is, but we cannot, which I don't agree with of course, but that's another topic:) Katerina

Jul 03, 2016 09:08 AM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Nestor & Katerina Gasset -  now I'll have the same question for this broker....WHY?

(And yes, one can say it's a business model - but why that model?)

Jul 03, 2016 02:42 PM