Alternative Brokerages Flourishing Around Seattle

Alternative Brokerages Flourishing Around Seattle

Full disclosure: The Tim was employed by Redfin, and is currently a shareholder. WaLaw Realty and Quill Realty are current advertisers on Seattle Bubble.

For some reason, the Seattle area has become home to the cutting edge of real estate. On the technology front, we’re home to Redfin, Estately, Zillow, ActiveRain (a division of Trulia), and Market Leader (also a division of Trulia).

But it’s not just consumer and agent-facing real estate technology that is flourishing here in the Seattle area. We’ve become a hotbed of alternative brokerage models, as well. If you want to pay someone a three percent commission to take basic photos of your home and list it on the MLS, or to help you see homes as a buyer, you certainly can, but there are a growing number of local choices if you want to pay less or get more for your money.

Here’s a quick rundown:

Alternative Brokerages Around Seattle

  • Redfin – Full service, agents paid on customer satisfaction, great website and mobile apps, commission refund/discount.
  • WaLaw Realty – Real estate attorney handles your deal, flat fee.
  • Quill Realty – Agent + attorney team handles your deal, charges 2% commission.
  • Surefield – Listing brokerage provides unique online 3D tour that allows buyers to get a detailed look at homes.
  • Locality – Full service, four percent listing option for sellers, one third commission refund for buyers.
  • $500 Realty – $200 and $500 basic listing packages for sellers, seventy-five percent commission refund for buyers ($3,900 minimum charge)

I have sent out a Q&A to each of these brokerages to allow them to share their model and the value they bring to buyers and/or sellers. Throughout the week I’ll be posting their responses in full, so stay tuned.

If you’re buying or selling a home in the Seattle area, I really have no idea why you would settle for a “traditional” agent charging three percent. With this week’s series, you’ll be able to determine which alternative brokerage model is right for your specific needs, wants, and buying or selling situation.

Series Table of Contents

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

26 comments:

  1. 1
    Dexter says:

    “If you’re buying or selling a home in the Seattle area, I really have no idea why you would settle for a “traditional” agent charging three percent. With this week’s series, you’ll be able to determine which alternative brokerage model is right for your specific needs, wants, and buying or selling situation.”

    I do. Redfin has great a great website, but when you get tired of bad contract writing, or you lose 3-6 homes, you’ll end up at a traditional brokerage.

    WALaw: Go ahead and use them for those one offs, but never will you win a home if you’re competing. How do they do on marketing your home?

    Quill: Who are they and what do they do? Oh, an attorney helps you fill in the blanks of a PSA. A monkey could do that… That’s not the job of a great agent.

    Surefield: 25,000 photos for you to see on line. Or you could just schedule that with an agent that knows about the neighborhood. Yeah, information overload vs. pertinence.

    Locality: Why pay these guys when you could pay $295 to get your home on the MLS. Seriously, why overpay?

    $500 Realty: There are cheaper alternatives… Let’s race to the bottom! Oh, and expect that you’ll get the bottom of what your home is worth as well…

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  2. 2
    The Tim says:

    RE: Dexter @ 1 – So… I take it you’re a traditional agent?

    Rate this comment: Thumb up 0

  3. 3
    Blake says:

    RE: Dexter @ 1
    I used $500 Realty to purchase my house in 2011 and it went great. Ray was helpful, but I also knew what I was doing since this was my third house purchase. May not be for everyone, but I think it is good for people to take some time and learn a lot about the process and not be as dependent on the real estate agents – – who can be terrific…. or horribly incompetent. (I just think that the 6% fee is ridiculous… and receiving that big check back from Ray at closing was very nice!)

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  4. 4

    Why Use Any Brokerage?

    With listings down to a trickle, the local Seattle/Bellevue/Tacoma job market stagnated at 1.9M since the 2008 Great Depression and the Millenial first time home buyers making like $10/hr on the average….who needs them?

    The few buyers out there better be able to buy with a bag of cash or trade existing home equity; these transactions are the future of Seattle real estate. When this “old money” runs out [it already has begun to], then who will sellers sell to? The tooth fairy?

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  5. 5

    “Flourishing?” This seems to be purely anecdotal (totally unsupported would probably be a better phrase) and completely lacking in any data.

    As to the first comment, I’m not sure what is the basis of the claim that Redfin agents can’t draft contracts. That’s probably their strong suit compared to your average agent. And WaLaw and Quill probably work really well for a buyer who has identified a house.

    Getting back to the first point, The Puget Sound Business Journal periodically publishes stats on sales by agency. I don’t have time to look for them right now, so if someone can beat me to that task it would be appreciated.

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  6. 6

    Here’s more on SureField:

    http://www.geekwire.com/2014/redfin-founder-re-emerges-surefield-new-way-sell-homes-online-open-houses/

    Sweet! IMO a virtual tour that operates like a video game where a buyer can virtually walk through the house is a great idea and better than pretty pictures taken with a camera that stretches out the image to make the rooms look bigger than they really are :/

    Good luck to David, Rob, and Aravind!

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  7. 7

    By Jillayne Schlicke @ 6:

    Sweet! IMO a virtual tour that operates like a video game where a buyer can virtually walk through the house is a great idea and better than pretty pictures taken with a camera that stretches out the image to make the rooms look bigger than they really are :/

    Virtual tours vary, but most I think stitch pictures together, like you can do on a lot of cameras/smartphones. So they won’t impact the apparent size of the room unless maybe a wide angle lens is used.

    It would be an interesting poll to see how many people even look at virtual tours. Personally I’d rather click through 20 pictures than spend 5 seconds looking at a virtual tour, but I know some people like them.

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  8. 8
    The Tim says:

    RE: Kary L. Krismer @ 7 – Have you actually looked at what Surefield is doing? It’s nothing like most “virtual tours” which are usually little more than an auto-playing slideshow set to music. Their tech totally blows anything else I’ve seen out of the water, and it’s far beyond anything you could do with a smartphone.

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  9. 9

    RE: The Tim @ 8 – I saw the demo on Geekwire. I was unable to see it in actual practice though because as far as I can tell they’ve only been involved with one listing on the NWMLS, as a co-listing agent, and ironically that listing didn’t have any virtual tour.

    In any case I wasn’t suggesting using a smartphone–just describing how some VTs work. Surefield is more advanced than most VTs, and I like the additional user control. And I like that they seemingly have a floorplan layout–in the demo. That IMHO is more valuable than the VT.

    I’m just not a big fan of VTs, so let’s just say I won’t be part of a venture capital group funding Surefield. ;-)

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  10. 10

    A “monkey could do that”? Ouch.

    We’re great agents, just like any “traditional agent”. But we also recognize the limits on what an agent can / is allowed to / should do. So every one of our clients also is represented by an attorney to lend a hand when necessary and appropriate. Is there an underground storage tank? Do you want to actually understand the contents of the title report? Are you looking for a true advocate who has a strict duty of confidentiality? Anyone in those or other situations will appreciate working with a Quill attorney.

    Kary, please check out my NEW model, it differs from my old one. The fee is 2% with unlimited tours, etc. Yes, you are correct, we won’t troll listings for our clients. But that just means we believe in empowered and educated consumers. We’re good for anyone, not just those who’ve already found “the one.”

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  11. 11
    Gerhard says:

    Different strokes for different folks. We are all smarter AFTER we’ve purchased something. Competition is good because it challenges everybody to provide the best possible service that’s commensurate with the customer’s knowledge, time and expectations. You can eat out by going to a drive-through, stand in line and order, or sit down and be served.

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  12. 12
    Rob McGarty says:

    RE: Kary L. Krismer @ 9

    Hi Kary, try this link to see our demo homes: http://www.surefield.com/tour-homes

    Once you click on a home you can start interacting with the “virtual tour,” which I promise is unlike any virtual tour you’ve seen.

    If you want a direct link, check out http://www.surefield.com/property?h=aac or http://www.surefield.com/property?h=aad which are both really fun homes to explore.

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  13. 13
    wreckingbull says:

    It is the marginal six-percenters that get their panties in a bunch about the new sales models. They are the ones who survive by clinging to an outdated system. I have to imagine that the good full-service/full-cost agents are not concerned, since they will continue to have a viable business model: helping those who need a very hands-on experience.

    This is good for everyone. The bad agents get flushed down the loo, the good agents remain, and more choices exist for the consumer.

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  14. 14
    ARDELL says:

    RE: Rob McGarty @ 12

    I wish you luck with that, Rob! Love the all inclusiveness of the effort.

    I popped by Ameripact the other day to meet Haresh Sangani. Love exploring new biz ideas born out of the consumer experience. Basically Ameripact is a full due diligence report as to inspection and appraised value for the seller controlled by an unbiased 3rd party to be given to the buyer and a lender guarantee for the buyer to be given to the seller.

    While he is not advertising it as such, I think it has the potential to be a game changer. A for sale by owner on steroids. A better way for buyers and sellers to connect with more info on the table at the outset.

    Haven’t seen a lot of new ideas since the market tanked. Glad to see some innovation!

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  15. 15
    mike says:

    RE: The Tim @ 8 – Does it let you see the old galvanized plumbing, spider webs of home done electrical wire, half-arsed unfinished remodels, sloped floors, sunken ceilings, and other things typical listing photos screen out?

    Joking aside, this is pretty cool for visualizing the actual layout, another thing typically missing from traditional listings. You can see some reflections of the camera in a few shots – looks similar to the setups used for google street view.

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  16. 16
    Jay says:

    My experience with Redfin was awful, and I didn’t buy anything with them. I hope that I won’t have to hire them for selling/buying real estate in the future. The field agents weren’t interested in helping you at all because they got paid already. The brokers were annoyed with you if you asked too many questions because they had tons of customers to deal with. Redfin refunds approximately 1/3 of the commission, but they do less than 2/3 of the work that they get paid for. For the biggest purchase of your life, I thought they would have provided better customer service. Well, if I were to run this company, I would have hired better field agents who can actually help people to buy a house/condo/townhouse. If Redfin were such a good deal, everyone would be using them!

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  17. 17
    Erik says:

    RE: Craig Blackmon @ 10
    Having a lawyer on your side is a good thing. Since our last conversation, I thought about it some more and having a lawyer throughout the process does add a lot of value. I would still use Ardell, but I think you have a great business and I think you will be successful.

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  18. 18
    Erik says:

    RE: Jay @ 16
    I totally agree. As far as I’m concerned, redfin is a great place to look up houses for free. They have a great website other than my computer keeps freezing lately when the agent’s data pops up on the screen. It use to be a good website atleast and I think they will eventually fix that problem and it will be a good free data search again.I

    There is no way I would let Redfin sell my home. They would not put a fraction of the effort and time Ardell puts into a sale. I am conviced Ardell got me $20k extra or more. Maybe buy with a website like Redfin, but I would never sell with one. You would not get as high of a sale price because you are just a number to them. I imagine they aren’t the highly skilled agents that really understand the process.

    Some of the great David Losh’s last words were bad mouthing Redfin. In his lifetime in real estate he was able to leave us with those final words of wisdom.

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  19. 19

    By wreckingbull @ 13:

    It is the marginal six-percenters that get their panties in a bunch about the new sales models. They are the ones who survive by clinging to an outdated system. I have to imagine that the good full-service/full-cost agents are not concerned, since they will continue to have a viable business model: helping those who need a very hands-on experience.

    This is good for everyone. The bad agents get flushed down the loo, the good agents remain, and more choices exist for the consumer.

    Choice is good, but one thing that gets overlooked here is the agents. I’m sure some agents prefer Redfin’s salary and corporate structure, and some probably wouldn’t like that at all, preferring the additional independence of the traditional broker model.

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  20. 20

    RE: Erik @ 17 – Thanks Erik. And I’m totally happy with Ardell’s overflow. For now… ;-)

    Rate this comment: Thumb up 0

  21. 21
    Erik says:

    RE: Craig Blackmon @ 20
    Ha ha ha!!! :)I had a nice laugh at that one.

    You haven’t been doing it as long. You will find clients that will be loyal and you will appreciate it.

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  22. 22
    Someone says:

    I don’t really understand why anyone who is not a new buyer would want to use a RE agent/broker wasting huge amount of money for a commission. On a $500K it is $30K out of the window if you know what you are looking for and know where. Most of the agents I dealt with don’t even have higher education, let alone trusting them with a legal contract and only thing they know is how to sell. I think it is overdue to change the landscape of the crooked industry and make it similar to the investment brokerages when there is a full service brokerage charging you 2-3% or $50-200 min charge in buying stocks or Scottrade, which charges you flat $7 regardless of the amount of the investment transaction. If I was selling my house I would never use an agent (provided I have some free time to deal with buyer visit schedules), same if I was buying. Just hire an attorney for a flat fee of under $1000 to write up a contract according to your taste or have him review it before accepting any. At the end of the day if you know what you want it is a few steps process – Liked – >Made/accepted offer->Home professional Inspection ->Mortgage. I don’t see any reason why anyone would leach $30K in average when the process involves buyer who knows what he wants.

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  23. 23
    Someone says:

    And of course, an agent will tell you: “Buying a house “”is free”” for buyer… ” without telling a buyer that a house would be at least $30K cheaper if it was not agent’s commission.

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  24. 24

    RE: Someone @ 22 – I always find it fascinating how much people on the Internet think they know because they’ve been involved a few times in a transaction in the past.

    I’ve changed brakes on cars and other vehicles a few times, and I’ve paid a mechanic to do it several more times. Guess how much I learned about changing brakes from having a professional do it for me?

    I’ve yet to see any significant correlation between buyer knowledge of the process and number of prior houses bought. Signing a contract you don’t fully understand and attending a closing you don’t fully understand is not the same as understanding something.

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  25. 25

    RE: ARDELL @ 14

    Ardell – thank you for the vote of confidence.

    Our goal at Ameripact (www.ameripact.com) is to bring about huge gains in efficiency for all sellers and buyers, this is especially true for buyers and sellers who have agency representation. For sellers this means more $$’s, for buyers this means the right house, and for all it means a quick, easy and stress free transaction cycle.

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  26. 26
    ray pepper says:

    I used to have OLD bowling shoes called Dexter. I threw them out as well.

    Advice…If your a Seattle Bubble Reader, and you still don’t get it, then there is simply no hope and you are virtually brain dead.

    To sum it up: Never pay anyone more then 1% to LIST your property and EVEN WORSE don’t give YOUR MONEY AWAY BUYERS….Good God! Those still using Buyers Agents and not getting a % back of the Buyers Agent commission are OBVIOUSLY still using VCR’s and have home rotary telephones.

    That is ALL!

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