Alternative Brokerage Spotlight: WaLaw Realty

Full disclosure: WaLaw Realty is a Seattle Bubble advertiser

Read the series intro: Alternative Brokerages Flourishing Around Seattle

Next in our in-depth series on alternative brokerages around Seattle is flat fee lawyer-brokerage WaLaw Realty.

WaLaw RealtyMy wife and I used WaLaw to buy our home in 2011. WaLaw co-founder Marc Holmes helped us throughout pretty much our entire homebuying timeline, wrote offers on five homes, and made buying a short sale seem easy. We are very satisfied customers and personally recommend WaLaw to anyone who asks.

Marc’s answers to the series Q&A are presented un-edited below.


What is the single most important advantage your brokerage offers vs. using a traditional agent?

WaLaw Realty has two significant differentiators from traditional agents: a flat fee instead of commission and a real estate attorney handles every deal.

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

The flaw with the traditional commission paradigm is that it charges high fees despite great variation in the services people need or want. Many buyers want to conduct their own search and just need help accessing properties and managing the offer process.

For sellers, the cost of marketing a home has fallen dramatically yet the cost of agents has not. It shouldn’t cost three times to sell a $1,000,000 house as it does a $300,000 house when the services provided by the listing agent are virtually identical.

We solve that problem by charging a flat fee that better aligns the cost of the services required plus a reasonable profit. We rebate the balance of the commission to buyers and sellers avoid paying 3% to list. Moreover, by requiring the client to commit to paying our fee we allow them to self-select in a way that only serious consumers hire us. Thus, we don’t waste time giving “free tours” to people who may never actually buy a house.

Our other value add is legal counsel. Our clients are represented by a person who is both their broker and their attorney. This means they have a seamless experience and get more sophisticated advice through the whole process including negotiating the offer, reviewing title and closing documents, etc.

Our employees are all on salary and the company provides all of the clients. They do not have to sell their services and can instead focus solely on looking out for their clients’ best interest.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

In the first few years we had way more buyer clients, perhaps 80%. It took sellers awhile to believe you could sell a house without using a traditional agent. By 2012 that began to switch and became a little more balanced. In 2013 we took on more seller clients than buyers due to capacity constraints. In 2013 we’ve added another attorney and have not had to turn away buyers as we did last year. So, we’re pretty evenly split between buyers and sellers.

Most of our clients are in King County and we’re evenly split between Seattle and the Eastside. Our clients tend to skew to the higher end. To date our average sales price for buyers is $689,000 and $569,000 for sellers.

What is your fee structure? How much do buyers pay, how much do sellers pay?

$4,995 flat fee for homes priced under $1,000,000. An additional $2,000 for each million over a million.

Is there anything else you would like to share about your brokerage?

Only how much we appreciate The Tim, Seattle Bubble. First, for giving me a great warning in 2006 and 2007 to not buy a house which I completely ignored. And second, for being a fantastic resource that we can direct people to to better understand the market we’re all in.


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.

19 comments:

  1. 1
    ray pepper says:

    Isn’t WA LAW crapped out since the one guy left and started Quiz Realty or something?

    You should have really included MLS4Owners and talked with Chris Nye. They were Pioneers. I drive by their office all the time and get my car washed adjacent. Never really see anyone but its walking distance to…………THE EMPIRE….THAT IS………..500 Realty!

  2. 2
    The Tim says:

    RE: ray pepper @ 1 – WaLaw is doing great. Craig is doing Quill Realty now but Marc is still humming along with WaLaw.

    As for MLS4Owners, I did send them the questions. They ignored me until yesterday when the intro post went up, at which point they sent me back some very short answers that I’ll be posting later this week.

  3. 3

    That’s What’s Good About America

    Like businesses are competing and lowering fees to capture a dwindling buyer pool.

    I see the $5-10K tooth implants of the past decade are recently on sale by dentists for like $1999 with coupons….similar scenario.

  4. 4

    By softwarengineer @ 3:

    That’s What’s Good About America

    Like businesses are competing and lowering fees to capture a dwindling buyer pool.

    What “America” is about today is making tiny amounts of money off of millions of people, often merely advertising revenue (e.g Facebook & Google). That revenue stream is then capitalized after applying unrealistic growth projections, and then often multiplied further as companies bid on one another in bidding wars. Today an idea can literally be worth billions if some Google-like company is interested in buying it.

    That’s what makes these startups like Redfin and Surefield sort of odd. The don’t fit the typical technology mold because they try to make a lot of money off of a few people. It’s not the road to great riches. It’s like becoming an attorney because $300 a hour sounds good, when people make many multiples more money singing songs or playing football (making a lot of people happy). I wonder how long it will be before the venture capitalists realize this?

  5. 5
    ray pepper says:

    RE: The Tim @ 2 – GOOD! No conversation about alternative Brokerages in Washington should takes place without referencing MLS4Owners. Back when I was even peddling the 6% FIASCO with Pepper Realty they were plugging away quietly with their seller model!

    Always a BIG Hat Tip to Chris Nye!

  6. 6
    wreckingbull says:

    RE: Kary L. Krismer @ 4 – Compared to the traditional model of real estate transactions, companies like Redfin are making less per sale, but hope to make up for it in volume. Their technology platform allows this to be possible. This contradicts your statement.

  7. 7

    By wreckingbull @ 6:

    RE: Kary L. Krismer @ 4 – Compared to the traditional model of real estate transactions, companies like Redfin are making less per sale, but hope to make up for it in volume. Their technology platform allows this to be possible. This contradicts your statement.

    Okay, I didn’t comment on the Redfin thread where it was claimed their technology drives more buyers to properties faster. That type of comment appearing from a traditional brokerage in the Seattle P-I would be part of Tim’s reporting roundup, and not in a nice way. But what technology do you think they have that other major companies don’t have?

    And what volume? Redfin in in Seattle is about the size of the largest single office in the Seattle area, maybe slightly larger. If they’re making up for it in volume, they are failing miserably. In another thread I mentioned that the Puget Sound Business Journal sometimes publishes stats on sales by brokerage. I haven’t looked for that, but I might now.

    Edit: Here’s a link from a year ago: http://www.bizjournals.com/seattle/blog/2013/04/top-5-puget-sound-residential-real.html?s=image_gallery

    Redfin isn’t even in the top 5, and they’re below Keller Williams which started in this area at about the same time.

    So what exactly do you think contradicts my statements? Fantasy?

  8. 8
    ARDELL says:

    RE: Kary L. Krismer @ 7

    I don’t think that is a fair comparison, Kary. Most of those “companies” in the article are bulking several individually owned companies who are using the same franchise name.

  9. 9

    By ARDELL @ 8:

    RE: Kary L. Krismer @ 7

    I don’t think that is a fair comparison, Kary. Most of those “companies” in the article are bulking several individually owned companies who are using the same franchise name.

    So? Like I said, Redfin is about as large as the largest single office in this area, maybe slightly larger, I haven’t run the numbers.

    My point is that people in this board think these alternative brokerages are incredibly successful. They aren’t. They are niche players. There are single agents that do a lot more business than many of the companies mentioned in the original piece.

    That’s why I started my post in the original piece with: “Flourishing?” And commented on the lack of any data. This is a site that posts a lot of data, and the lack of any data on this topic is very telling. I’m just pulling back the curtain.

  10. 10

    RE: Kary L. Krismer @ 9 – I think you’re hung up on semantics, Kary. Per the PSBJ 2014 Top 25 list of real estate firms, Redfin comes in at No. 6 and WaLaw at No. 23. I’m assuming Ray was too busy writing jokes to submit the data for $500 Realty…

    So alternative models are certainly making progress. Are they flourishing? Are they incredibly successful? Obviously those specific terms are debatable. But at the end of the day, alternative models are more than “niche,” and they are growing….

  11. 12

    By Marc @ 11:

    Like Ray, I send people to MLS4owners who want to minimize total costs of sale. I’m glad that alternative exists for consumers.

    I’m glad the alternatives exist too, and I particularly like your model. That’s not the issue.

    My point in the original thread that without data (such as some of that provided above), the word “flourishes” is completely unsupported.

    My point in this thread is I don’t think that Redfin is likely to return the type of returns that investors in tech expect.

    And BTW, on the topic of investors, I think the purchase of Realogy in probably 2007 or so, and the purchase of Prudential last year were also rather bizarre, although the former more than the latter. Buffett invests in a bunch of rather old tech, low return companies, and it’s doubtful he overpaid the same as the Realogy transaction. I mainly think it’s bizarre because all these companies have is their agents, and the agents could jump ship at any time. Inertia keeps them in place, but the customer loyalty for those companies is to the agents, not the firms.

    Finally, those Redfin numbers seem high, but I’ve only pulled six month data–so the slower months.

  12. 13

    RE: Craig Blackmon @ 10
    Who’d have thunk it? A lawyer hung up on semantics?

  13. 14
    The Tim says:

    By Kary L. Krismer @ 12:

    My point in the original thread that without data (such as some of that provided above), the word “flourishes” is completely unsupported.

    The primary definition of “flourish” is “to grow well : to be healthy”

    Considering that three of the brokerages I’m highlighting in this series are new in just the last few months (Quill, Surefield, Locality), I don’t see how there’s an argument that alternative brokerages are growing in number around Seattle. Additionally, the individual brokerages themselves are growing in size and transaction volume.

    So I stand by my use of the word “flourishing.” Had I said “dominating,” “taking over,” “skyrocketing,” or something similar, I would understand your complaint. But they are very clearly flourishing, in my opinion.

  14. 15

    RE: The Tim @ 14 – Another definition of “flourish” is: “a bold or extravagant gesture or action, made especially to attract the attention of others.” That definition might apply to these companies. But just focusing on Redfin, that Keller Williams apparently grew at least three times as fast without needing hundreds of millions of dollars of venture capital to do so would suggest it is flourishing compared to Redfin, if flourish means to grow well. That would mean that Redfin is doing something less than flourish.

    Someone who only read SB and the comments on SB might think Redfin was a much larger player than it is. These alternative brokers are a good option for many people, but the data strongly shows not that many people go the alternative broker route (for one reason or another, right or wrong).

    Here’s a link to the 2014 PSBJ data that Marc referenced:

    http://www.bizjournals.com/seattle/subscriber-only/2014/04/18/residential-real-estate-firms-2014.html

  15. 17
    wreckingbull says:

    RE: Kary L. Krismer @ 9 – That is your response? “So?” It is exactly my point. Redfin is a single company with national aspirations, not a franchise. They are growing at a good clip. Note the word ‘aspirations’ and note my choice of the word ‘hope’ in my original post.

    Notch it down a bit Kary, you are emitting a slight smell of desperation.

  16. 18
    ARDELL says:

    RE: Kary L. Krismer @ 15

    In my lingo if you’re not sleepin’ wit da fishes…youse is flourishin’.

    Seriously these newly formed companies survived a very tough market early on in their existence. That IS “flourishing” and not all that easy to do. Many of the largest of companies survived by consolidating offices. The smaller companies didn’t have that luxury…and they still made it through.

    Plus…and no small point…they moved the entire market in a new direction and really had a huge impact on almost every company in the area. No longer is it taboo for buyers to talk about commissions or about not having an agent at all.

    Their success is not merely marked by the growth in their own companies…but the growth in options available to consumers via almost all companies, as a result of their existence.

    You need to look at that big picture. If none survived they would have proved that no one else needed to change. By surviving and growing they have made 100s of other agents and brokers rethink the way they do business. HUGE impact…at least here in the Seattle area.

  17. 19
    wreckingbull says:

    RE: ARDELL @ 18 – Like many on this blog, I have purchased property both before and after online consumer-focused search and analytical tools existed,

    I am quite confident that I could have avoided many of my early mistakes if I had the type of information that is available today, largely due to the new tools that were spurred by alternate brokerage models. So yes, I agree. Huge impact indeed.

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