Thanks to the likes of Zillow, Trulia, and Redfin, the availability of information to real estate consumers has changed profoundly in the past decade…and it needed to. Along with it, the means by which home buyers and home sellers acquire and liquidate property is changing as well. Enter Wall Street backed start-ups to the equation, and now you have a consumer base with a number of options available to them…but are they “new” options? Not at all.
The list is endless, and each new entry is as redundant as another new color of Dawn liquid soap. Rex, Homelight, Open Door, Upnest, Redfin, Zillow, Open Listings, Side Door, Triplemint (no, I didn’t make that up), and a number of alternative brokerages like 500 Realty, Flat fee brokers, Purple Bricks, and I could go on. Millions of marketing dollars are being spent by these start-ups to convince home sellers that they will “save them from those greedy old real estate agents who just want to steal all their equity.” Don’t take the bait. Regarding real estate commissions, they are shared by many people, and they are and always have been negotiable. Always. The bigger question isn’t what will you pay in fees, to whomever you hire, but what will you receive in terms of value? What impact will they be able to have on the financial outcome of a transaction? If an agent charges you 6% and through effective negotiation delivers a result to you that is 6% more than you could have done on your own, that agent didn’t cost you 6%, that agent was able to offset his/her entire fee. They cost you nothing. Conversely, if someone charges you less but costs you more, meaning they didn’t fight to preserve your equity, they didn’t save you anything. They cost you money.
Today, these not-so-new business models will offer you anything from a rebate on commission to lower commission to a cash offer for your home, allowing you to “skip the whole stressful home selling process.” This is a good time to remind you that every single one of these options, and more, are and have been available to home sellers all along by way of a seasoned and experienced real estate agent or Broker. They are not new concepts…although the new marketing tactics might lead you to believe otherwise. The biggest problem that I see with these not-so-new alternatives, is they’re trying to lead consumers away from a real estate agent who can offer them every option under the sun with a flexible fee schedule, to a one-item menu that offers one service only at a fixed cost. Every single one of these “new” companies offers a home seller one option…theirs. A traditional agent of Broker can and should be offering the home seller the best solution for their individual case.
Ironically, one of the things that drove me nuts about the business when I entered it some 17 years ago, is that most real estate brokerages still practiced the “one item menu” approach. Take the listing, stick a sign in the ground, wait for someone else to sell the property, split the commission, rinse and repeat. THERE IS NO ONE-SIZE-FITS-ALL in real estate, and for 17 years now I have tried to educate home sellers to that simple truth. We assess their individual situation…financial leverage, motivation, and personal goals…and offer a short menu of the best options available to deliver the best result. Unfortunately, all real estate investors understand these strategies, but most homeowners do not, simply because they’ve never been exposed to them. Why, as a home seller, would you not want to see all of your options? What if you’re leaving tens of thousands of dollars on the table? What if there’s a more efficient means to get to where you want to be? Ultimately, you should want to know all of them, in a no-pressure setting, and make the best informed decision for you and your family. Right?
None of these new start-ups that are promising to save you from the real estate agent will do that. They offer one solution, and they’ll spend millions to convince you that the solution they’re offering is the best one for you. Either that, or they’re not a real estate company at all, but rather a marketing company simply trying to convert you to a lead, then sell your information back to a real estate agent. Since when does Wall Street have your best interests at heart? They’re focused on one thing…profit. Nonetheless, thousands will take the bait and likely leave a lot of money on the table. Money that should be kept in their pocket, rather than another Wall Street investor.
These folks are offering nothing new. Nothing at all. Use them or use a local agent, it’s clearly your decision. Get a full assessment and a menu of options from us, or a one-option solution from them…it’s your choice. It’s also your equity. Spend it wisely.