Offering fee-based, a la carte services to increasingly independent consumers.
By Megan Craig
From fee-for-service brokerage models and unbundled services to marketing packages, there are several ways buyers and sellers can get around hiring a full-service real estate agent.
While 87 percent of homes are purchased with a real estate agent or broker, 44 percent of buyers found the home they purchased online and only 33 percent found their eventual home directly through an agent, according to the National Association of REALTORS® 2015 Profile of Home Buyers and Sellers.
In recent years, businesses have begun catering to these tech-savvy consumers who want to spend less and do most of the buying and selling work themselves, but who need some professional guidance along the way as well.
But some REALTORS® are concerned that the pay-for-services model leaves consumers open to bad deals and without the expertise they need for a successful real estate transaction.
Business Evolution in the Internet Age
For buyers, the process of buying and selling a home is different from what it once was. Now, consumers can find nearly endless information online-available listings with dozens of pictures, comparable homes in the same area, detailed information on creating closing paperwork and more. That means more customers are trying to go it alone.
In the last 18 months, more than 1,500 agents in 47 states have signed up to offer services through SoloPro, a network of real estate professionals offering a la carte services for pre-set fees that founder and CEO Tommy Sowers calls “a nationwide army of agents.” Those agents are available on-demand to perform specific tasks chosen by the buyer, including posting a listing, in-person consultations and closing paperwork, among other services.
REALTOR® Silvia Dukes, CRS, of Tropic Shores Realty in Spring Hill, Florida, sees that business model as too much solo, not enough pro.
“Unbundling inherently produces an element of low commitment on the part of the consumer as well as the agent,” Dukes says. “And while in a traditional real estate customer-agent relationship not all customers are committed to the agents, many agents do feel committed to their customer and work to establish a relationship that will be a win-win for all in the end.”
Paying the Price for Expertise
Just because a seller can pay a flat fee to put his or her property in MLS doesn’t mean the seller will know how to talk to people who react to the listing, adequately advertise the home, know how to show the property to attract the best offers or be able to negotiate the contract. That’s why selling a home should be left to the experts, says Denny Grimes, CRS, in Fort Myers, Florida.
People outside the business think selling real estate is easy, and it would be in a perfect world, says broker Caroline York Mortell, CRS candidate. But in many transactions, the buyer will find something wrong with the house or something wrong with the contract—problems that agents can handle swiftly but would stump someone who lacks training or experience.
It’s dangerous for consumers to look online and assume they’ll find out everything they need to know about a property, she says.
“You know what the internet can’t give anyone? The internet can’t give anyone skill,” Grimes says. “Consumers now have more information, but they still don’t have the skill that comes from being in this business a long time. The nuance of this business is incredible.”
Giving in to Consumer Demands
Web forums on sites like Trulia and Zillow are full of questions from consumers about fee-for-service models—where they’re available, where to get the best prices, what parts of a transaction can be done alone and which parts absolutely require a professional. Some consumers see unbundling as a way to save big on one of life’s costliest transactions.
Susanne Flynn, broker and founder of ResultsMLS, based in Nashville, Tennessee, offers her services in that way, having formed an unbundled business model in 2006 after selling a couple of her own properties mostly on her own. She says she realized she was paying a 3 percent commission to her seller’s agent, but selling and showing the home herself. She based the model on travel agencies, which had to switch to a fee-based model after travelers gained access to much of the travel information they needed online.
Flynn offers several full-service packages for flat fees, as well as a couple of options for listing a home in the MLS without the full service.
“Why pay 6 percent selling your home when you can pay thousands less? Today’s buyers are very savvy, and 90 percent of them start their search on the internet before they ever contact an agent,” she says. “The real estate industry is changing, so why not reward people who do some of the legwork themselves?”
Unlike Flynn, broker Caroline York Mortell, CRS candidate, who works in St. Petersburg and the Tampa Bay area in Florida, says she found that buyers and sellers aren’t interested in the menu of a la carte services she offers, and that most people (at least in her area) want to hire a traditional agent.
Denny Grimes, CRS, based in Fort Myers, Florida, says he won’t be offering a menu of unbundled services anytime soon because he thinks buyers and sellers are doing themselves a disservice by attempting to dissect the services of a REALTOR® as if they were mutually exclusive services.
But Grimes does see one positive to what companies like SoloPro and REALTORS® like Flynn are doing: “I think there’s a niche for people out there who have a need and a desire to basically go it alone and have some expertise, some sort of ability with selling real estate—they can win. They can benefit,” he said. “And there are agents out there who can and should serve that niche.”
For the vast majority of consumers, though, paying for the expertise of a full-service agent is the least expensive option, he says. Attempting to save money without expertise can be very expensive.
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