IpayOne Out of the Listing Business: RIP

By
Managing Real Estate Broker with San Diego Previews Real Estate CA BRE# 01101958

 

 

High-profile real estate discounter ipayOne has posted a notice on its website that they are no longer accepting new listings. 

Their website bears the following message:

To Our Community:

ipayOne will no longer be accepting new listings. If you are an existing client, please contact Alana Yardley@ipayOne.com

If you are contacting us regarding buying any other property using our Buyers Reward Program please contact us at info@ipayOne.com

If you are contacting us regarding financing a new or existing home, please contact us at info@ipayOne.com 

The ipayOne employees, real estate agents and management team want to thank you for all your support over the past three years.

Michael Jackman

CEO 

ipayOne is/was headquartered in Carlsbad, CA and specialized in taking one percent listings and offering buyer rebates. They spent heavily on advertising, and bought naming rights for the San Diego Sports Arena. Look for a name change there too....

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Rainmaker
1,765,221
John Novak
Keller Williams Realty The Marketplace - Las Vegas, NV
Henderson, Las Vegas and Summerlin Real Estate
Hi Roberta - Interesting news. One of Inman News' predictions for 2007 was that tough markets would squeeze many discount brokers out of business as sellers realize it takes more to get a home sold.
Apr 07, 2007 06:28 AM #1
Rainer
54,515
Dave Cheatham
INC Financial - Bartlett, IL
Well this is what many people say would happen.  I would like to know why they are doing this for sure.  Anyone think it might be the sub-prime market?
Apr 07, 2007 06:35 AM #2
Rainmaker
197,711
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes

The discounters fared well when the market was booming. Commission was an issue then

Now that the market has slowed, commissions are rising and sellers are returning to experienced agents who can sell homes in all markets. Additionally, it is impossible to make money and stay in business with that steeply discounted business model.

Redfin, beware. 

Apr 07, 2007 06:44 AM #3
Rainer
51,935
Christina Ethridge
The North Idaho Dream Team powered by SKE Realty Group - Coeur d'Alene, ID

Definitely related to the market.  When it's a sellers market, proper pricing, marketing and experience are not needed as much.  Now that it's a balanced to buyers market across the country, sellers are finally realizing that it takes more than just slapping a property in the MLS or putting a sign in the yard to sell a property.

In our business none of this is related to the sub-prime market - although some deals are harder to hold together because underwriters are spooked.

And I agree with Roberta, unless you are simply slapping the listing in the MLS and dealing in bulk quantities, it is impossible to make money with the discounted business model.

We've been raising commission rates - we have too - it takes a strong offering to buyers agents to get properties seen with the competition that's on the market. 

Apr 07, 2007 06:54 AM #4
Rainmaker
197,711
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes

John: I recall Inman's prediction. Many of the discounters and fair weather agents will be leaving the business.

Dave:  This isn't a subprime issue. It is a market and business model issue. 

Christina: I recall email blasts from ipayOne during the last six months. Each was titled: ipayOne Now Co-ops!  Most probably ended up in the spam pools.  

Apr 07, 2007 07:08 AM #5
Rainer
155,621
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

Roberta:  I own ValueList Real Estate Services, Inc. and we're a St. Louis discount real estate company.  Traditional realtors have been predicting our demise since the beginning over 11 years ago.  I'll admit that last year sucked, but I think that it did for a lot of real estate companies.  

I found your post to be straight forward, "discount real estate company bites the dust" or something to that effect.  I don't have a problem with that except that it is evidence of a hostility that many traditional real estate agents have against discounters.  If you have a minute, please read my post http://activerain.com/blogsview/57865/Don-t-Be-Afraid  on why traditional agents don't need to be afraid of us discounters.

Regarding your comment above, I disagree on a couple of points.  1) Commission was an issue then; commission was an issue during the boom and it will be an even bigger issue in a normal or slowly appreciating market.  If someone bought a home 2 years ago and it's only worth a small amount more than it was then or even less than it was then, a 6% or 7% commission could sink them.  In the boom when prices were appreciating rapidly I actually had people say, "I know that you're a better deal Bob, but my Mom would be pissed if I didn't list with cousin Jill and even paying her the 7%, we'll still be making money" or something to that effect.

2) Just because an agent works for a discounter doesn't mean that they don't have experience.  I've been in the business for 22 years and counting!

3) Additionally, it is impossible to make money and stay in business with that steeply discounted business model.  I'm not sure about the other discounters out there, especially the ones who don't have additional income streams connected to their business, as ValueList does, but ValueList has only had one year in the past 11 where we weren't in the black.  Granted that year was LAST YEAR, but I'd attribute the bad year to the market, but more so to some mistakes that I made with the company.  Those mistakes are in the process of being corrected and I actually expect 07 to be a pretty good year!

Didn't mean to be so critical, but wanted to post my 2 cents worth!  Hoping that you have a great year too!

R.B. "Bob" Mitchell

ValueList Real Estates Services, Inc. 

Apr 07, 2007 07:10 AM #6
Rainer
36,982
Richard Parr
ADT Security Services - Slidell, LA
Home Security Specialist - Greater New Orleans, Louisiana
I have been hearing about this like the rest of you.  It does not come as any surprise from a business mindset.  If you operate on such slim margin it doesn't take much to put you under.
Apr 07, 2007 07:23 AM #7
Anonymous
Stephanie McCarty
I'm not surprised that a discounter is going bust in this market - it's a tough market and the public is finally catching on to the fact that when the going gets tough a full service agent is the way to go.   I hate to see anyone have financial difficulty or lose a business, but, many full service agents just getting started were doomed a couple of years ago due to discounters.   I guess what goes around. . . .
Apr 07, 2007 07:25 AM #8
Rainmaker
197,711
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes

Bob: This market will squeeze "many" discount brokers. It is definitely squeezing fair weather agents.

You have proven to be a survivor over the past 11 years and will likely continue to do so. 

In our market, sellers have increased commissions when and where they can in order to attract buyer's agents. An expanded commission, though, won't sell an overpriced property. And just like you, we have clients who are underwater. We do everything we can to help in their difficult transitions--including reducing commission. And in short sale conditions, both the listing and sales agents are forced take what the lender is willing to pay.

 

Apr 07, 2007 07:28 AM #9
Rainmaker
246,926
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699
Roberta, glad to hear it and see you blog about. I really didn't keep up with them...perhaps they should be added to the "Another One Bits the Dust" blog.
Apr 09, 2007 05:57 AM #10
Ambassador
3,912,547
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Thanks for sharing this, Roberta. I am not surprised. Seems to me that every listing I saw of theirs was overpriced and ended up getting listed by someone else who ultimately sold it.

Jeff

Apr 10, 2007 09:18 AM #11
Rainmaker
197,711
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes
Gena: LOL! Why don't you start a new AR group with that name? ;-)

Jeff: And towards the end, we were seeing fewer and fewer ipayOne listings. A year or so ago, I ran a check on their licensees. The majority had had their licenses for less than two years and several of those who had been in the business longer had had their licenses suspended at one time or another--usually over education issues.
Apr 10, 2007 09:40 AM #12
Rainmaker
246,926
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699
Roberta, are you referring to the goddess or are you referring to the Dust?
Apr 10, 2007 10:32 AM #13
Rainmaker
311,264
Brian Brady
San Diego VA Home Loans/858-777-9751 - San Diego, CA
858-777-9751
Having had a bad personal experience, I can't say that I'm weeping for them.
Apr 10, 2007 05:00 PM #14
Rainmaker
197,711
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes

Gena: Goddess only!

Brian: You are not alone (including the folks at San Diego Sports Arena)

Apr 11, 2007 04:18 PM #15
Rainmaker
311,264
Brian Brady
San Diego VA Home Loans/858-777-9751 - San Diego, CA
858-777-9751

You are not alone (including the folks at San Diego Sports Arena)

They invested in ipayone 

Apr 13, 2007 05:44 PM #16
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Roberta Murphy

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