I received an interesting call today at 2.5% Real Estate Direct. It went like this. “I understand that you provide most of the services of a traditional real estate broker.  So what is it that you do not provide?” Ken asked. “Why do you think we provide something less then other full service real estate brokers, Ken?” I responded.  “Lets face it,” he said. “You charge so much less so you can’t be providing as much.  Just let me know what it is so I can evaluate your service.”

“Ken, to the contrary.  I submit that we provide a more professional level of service than any real estate broker in the area.  Our real estate agents are highly trained, knowledgeable and utilize cell phones rather than voice-mail so they are more responsive.”

“But, you must provide less in advertising, or something” he insisted.

“No, Ken.  In fact, I challenge you to find any broker who provides more advertising.  Lets go over what we provide to every seller, every time:  Buffalo News, Rochester Democrat & Chronicle, Erie Times or Syracuse Post-Standard Newspaper Advertising, full color photo advertising everyday in Your New Home magazine distributed in the expensive Wegman’s, Tops and P&C racks, strong Internet advertising on www.keepequity.com which is optimized on Yahoo and Google.”

“Ah, its the Mulitple Listing System. You are not on that!”

“No, Ken, we are on the MLS.  We are full members of all the Board of Realtors in the markets we serve.  Our homes are on the MLS.  You get full exposure on sites like realtor.com, homesteadnet.com, buffaloniagarahomes.com, etc.”

“Really?” he said.

“Really” I said.

“How is it that you can charge only 2.5%,” Ken asked.

“Ken, it is simple. Really.  The biggest change in real estate did not occur with the advent of the Internet.  Rather, the change occurred much later when the National Association of Realtors decided to allow the public to have access to real estate listings through the Internet.  Before that, buyers had access to homes listed with no commission real estate companies like America’s Choice, but they had to call a real estate agent to find out which homes were available through the realtors MLS systems.   It was a closed system.  So it was hard for the listing broker to sell lots of homes directly to the public.  Typically, a buyer would call any agent who was a member of the MLS to find out the available homes.  After the public was granted access through sites such as realtor.com, buffaloniagarahomes.com and homesteadnet.com everything changed.   Buyers simply conduct a two-fold search when looking for a home: (1) they look for homes listed with America’s Choice and (2) they look to those MLS linked sites mentioned above.  That is all it takes to see just about all the homes in our area.  Simple.  Fast.  Now a good listing broker sells the vast majority of their homes directly to the public.  That is also why America’s Choice is so successful.

Research has shown that the overwhelming majority of buyers conduct their own research on the Internet.  Since our homes are on the MLS the buyers contact our agents directly.  It is that simple.  The buyers not using the MLS linked sites are captured through our expensive print advertising in supermarkets, in the newspapers, and through americaschoice.com or keepequity.com.  Both sites receive thousands of visitors daily.  In essence, a seller gets double the exposure with us for less than half the price.  We simply do not charge the seller 6 or 7% for our service.  We could and I submit most of our competitors would like us to charge  6 or 7%. We just don’t.  There has been no other company as successful as us because we are willing to spend the money advertising our homes and we couple it with the MLS. Double the bang for your buck at less than half the price.”

“But I’ve been told other agents won’t show your homes.  What do you say to that.”

“Really, Ken.  First, does it matter?  We just discussed that the research is clear that the overwhelming majority of buyers are conducting their own search on the Internet.  We capture all those buyers.  The rest are captured through advertising.  No stone is left unturned.  However, you are free to to offer a commission to a buyer’s agent over our 2.5% commission.  In fact, offer any amount you want.  Or, if any agent approaches us with a buyer let us work it out depending on the circumstances of the offer.  In either case you win.  Simply, we will not earn over 2.5% for ourselves.  Look at www.keepequity.com.  There you can see some of our sold homes and the commission paid.  See for yourself how most of our homes sell for only 2.5% commission. ”

In my  next blog article I will tell the story about a home listed with two successive 6% real estate companies at $399,000 that did not close.  The homeowner had accepted a contract for $379,000 towards the end of his second listing but that deal fell through.  The net to the seller would have been about $356,000 after paying commission of about $23,000.   The home owner listed with America’s Choice and Real Estate Direct in mid-April 2008 after expiring with the other real estate firms.  This is our exclusive agency program. Through negotiations by our agent on behalf of the seller we were able to obtain a sales price of $382,000 in about two weeks.  The buyer was working with an agent.  The deal came together at 2% commission for the buyer’s agent and 1% to Real Estate Direct.  The seller walks away with over $370,000.  Remember, this same seller had agreed to walk away with $356,000 when he was listed with a 6% company.  This example illustrates the point we have been making for so long.  Without the high commissions in the way, you will sell faster and put more money in your pocket.  You will receive true professional service from well trained agents and from our entire staff.