Dirty Little Secrets Behind White Picket Fences:

The Good, the Bad, & the Ugly about all things Real Estate

The Red(fin) Scare May 18, 2007

If anyone was fortunate enough to catch the 60 Minutes piece on 6% commissions in the real estate market on Mother’s Day Sunday, you may be aware of the upheaval the piece has caused amongst the real estate industry. (If not, I am sure it is available on YouTube and through CBS ). Although I applaud 60 Minutes for having the courage to expose the American public to what is ultimately harmful and unfriendly consumer practices by traditional agents/Realtors, as well as the NAR in many cases, it only managed to reveal a small piece of the puzzle.

Redfin, a newer discount real estate company offering limited-service options, low fees, and rebates on commissions for both Buyers and Sellers, has caused traditional agents to yet again reiterate their old sayings and yet again to justify their high commissions (remember, here is where the disclaimer must go that all commissions are negotiable by law, or ELSE ). Meanwhile, Redfin is riding a tidal wave of success and exposure.

Yet, the model is not that new. Sure, there are some new tactics, but companies like Assist2Sell have been quietly offering lower commission fees than the national average (5.1% according to NAR on their website) for decades. And, the icing on the cake is that we are FULL-SERVICE, whereas many discount companies—especially those that are internet based only— are not. That is not to say they are not a viable business model, they just do not provide the traditional service many consumers expect to receive. Assist2Sell does, and charges about half the “going rate” (see above) to do so.

60 Minutes Logo

So, it would seem like a no-brainer to list with a company like us. I am not tooting my own horn here—it simply makes no cents to list with anyone else who charges more, or a discount company that charges the same, but offers less value and service. I honestly feel that we are the best value PERIOD; I would say the same if I didn’t work here. Plus, we have agents who are very, very good in our office. Think about it, our concept is simple: lower fees=more listings=more buyers=more volume. The average agent in NH may close 3-10 homes/year and make a very good living doing so. The Owner/Broker of Assist2Sell, Vivian Sarlo, closed over 100 properties in both 2002 and 2005. She was ranked number one in the area for closed sales during those years(excluding new construction) as well. The other listing agents in the office, myself included, typically sell 30-45 homes a year, allowing our rankings to be in the top 5% of closed sales within the area. In short, we know what we are doing and we do it very well (as the numbers show). Plus, we have never had a single complaint in over 13 years with the Better Business Bureau. So, we do things right. How many other brokerages can boast a no-complaint record? My guess is not many.

So then, if we are so great, why doesn’t everyone list with us? I ask myself that question every day. One explanation may be that some may not know of us. It is true that we don’t have the brand name recognition that other big-name traditional companies do. We saved sellers over $1 Billion dollars in commission fees nationwide though, so we have less money to toot our own home on national television, etc. We spend our money advertising our homes for sale, not ourselves. Another reason may be the bad-mouthing we receive by traditional agents on a daily basis. They are scared–more like terrified–of us, they can’t compete with us, and so they lie–blatantly–to our clients, customers, and the public in general. Funny how we have had numerous calls from agents asking us to list their own homes for sale since their brokerages charge too much, or they don’t have a lot of equity in their home to pay a high commission. Yes, you read that right. We have sold other active traditional real estate agents’ properties. If that isn’t proof we are the best of the best, I don’t know what is.

The Blue Collar Agents Blog has a recent posting discussing just what kind of lies are said about discount companies throughout the country: It’s a short read, but it makes a point. Click here to read more.

I do want to point out that in this day and age, Realtors and agents do not facilitate the buying and selling of homes as much as they used to in the past. Instead, people do; consumers do. And, most of them find the home of their dreams WITHOUT any agent telling them about it. They use the internet, drive by listings, and are members of e-mail update services that tell them about every home to hit the market, regardless of the listing agency. For example, through our website you can be alerted of all new listing and price changes of all homes throughout the state without ever speaking to me via an email. It is done automatically. Then, when you want to see a home, you call the agent or your choice to schedule an appointment. The data is in real-time, too, so consumers see what I do immediately with no lags.

It is like we have always said: Regardless of whom you list you home with, if it is priced correctly and marketed effectively, it will sell—the difference is how much you will pay in commission fees. Don’t be a sucker, and don’t let high commissions take a bite out of your home’s equity.