As Real Estate ‘Disruptors’ Abound, Let’s Hear It for the Traditional Brokerage  

Disruption is happening in every industry, spurred on primarily by internet-based technology. Amazon is disrupting brick and mortar retail. Uber and Lyft have disrupted the taxi industry. Tesla disrupted the auto industry’s dealer model. Travel agents have suffered from online ticket sales by airlines, cruise lines and related businesses.

Now companies like Zillow, Open Door, and OfferPad are disrupting the real estate industry with their “iBuyer” model.

But those and other disruptors have not killed off the older business models. They are grabbing market share, but of an increasing market. You can expect to see brick and mortar retail stores, taxi companies, travel agents and, yes, traditional real estate brokerages such as Golden Real Estate thriving for years to come.

We ourselves have not suffered from these disruptors. Indeed, while 2020 and 2021 have seen huge growth by these new real estate enterprises, they have also brought record growth for our brokerage and other traditional brokerages, and it is easy to see why.

Buying and selling a primary residence is typically the biggest financial transaction we all deal with. Yes, buyers increasingly utilize the internet to search for homes, but they end up calling us to see them. Sellers also use the internet to monitor the market — many taking advantage of the MLS alerts that we set up for them — but they want someone they know and trust to bring their real estate savvy to bear in listing and marketing their home when it’s time to sell.

The “full-service” real estate agent is being redefined, and I like to think that my broker associates and I epitomize that evolution. Some of the services we provide can not be obtained from those other companies.

Full service goes beyond providing our free moving truck, moving boxes and packing material, which we’ve been doing since 2004. Here are some other services you can expect from us.

We have an in-house handyman who can help with preparing a home for market, such as repairing drywall damage, washing windows, and doing light plumbing and light electrical tasks such as installing a new toilet, faucet or light fixture. He’s also there to address many of the issues which arise from the buyer’s inspection. And he’s also there if needed to drive our truck for moving, or even for a dump run or for taking a load of possessions to Goodwill or Arc.

We also have a certified home stager who provides our sellers with a free consultation to help their home show its best.

You’re familiar by now with how we create narrated video tours of each listing, including drone videos, but we also serve out-of-state buyers by shooting videos of other agents’ listings that interest them. Last June I did that for a Minnesota couple who felt they had “seen” an Arvada home well enough through my narrated video tour of it to go under contract, not visiting the home in person until they came for the inspection.

Speaking of inspection, experienced agents like us from a traditional brokerage can be counted on to recommend a good inspector who has a track record with them. Other specialists we know and trust — giving our clients the comfort to employ them — include estate sales companies, structural engineers, electricians, plumbers, HVAC companies, and more. The real benefit from these trusted vendors is that they will make sure you’re satisfied with their work, because they want to be referred to future clients.

“Full service” also implies availability and responsiveness. My broker associates and I are available 7 days a week, and we answer our cell phones on evenings and weekends. Although I have associates who can be my “boots on the ground” when I go on vacation, I take my cell phone (and laptop) with me, and I answer it when it rings.

Often we provide service for which we don’t expect or receive any compensation. For example, this past Sunday I got an inquiry from a man who had inherited his mother’s house and wanted an appraisal for tax purposes. I explained that only licensed appraisers can do appraisals but offered to do a free market analysis, which he happily accepted.  He may call me about listing it later on, but that’s not the point. I’m happy to be of service.

I follow a policy that I came to embody many years ago: Concentrate on giving and the getting will take care of itself.

As Real Estate ‘Disruptors’ Abound, Let’s Hear It for the Traditional Brokerage  

Disruption is happening in every industry, spurred on primarily by internet-based technology. Amazon is disrupting brick and mortar retail. Uber and Lyft have disrupted the taxi industry. Tesla disrupted the auto industry’s dealer model. Travel agents have suffered from online ticket sales by airlines, cruise lines and related businesses.

Now companies like Zillow, Open Door, and OfferPad are disrupting the real estate industry with their “iBuyer” model.

But those and other disruptors have not killed off the older business models. They are grabbing market share, but of an increasing market. You can expect to see brick and mortar retail stores, taxi companies, travel agents and, yes, traditional real estate brokerages such as Golden Real Estate thriving for years to come.

We ourselves have not suffered from these disruptors. Indeed, while 2020 and 2021 have seen huge growth by these new real estate enterprises, they have also brought record growth for our brokerage and other traditional brokerages, and it is easy to see why.

Buying and selling a primary residence is typically the biggest financial transaction we all deal with. Yes, buyers increasingly utilize the internet to search for homes, but they end up calling us to see them. Sellers also use the internet to monitor the market — many taking advantage of the MLS alerts that we set up for them — but they want someone they know and trust to bring their real estate savvy to bear in listing and marketing their home when it’s time to sell.

The “full-service” real estate agent is being redefined, and I like to think that my broker associates and I epitomize that evolution. Some of the services we provide can not be obtained from those other companies.

Full service goes beyond providing our free moving truck, moving boxes and packing material, which we’ve been doing since 2004. Here are some other services you can expect from us.

We have an in-house handyman who can help with preparing a home for market, such as repairing drywall damage, washing windows, and doing light plumbing and light electrical tasks such as installing a new toilet, faucet or light fixture. He’s also there to address many of the issues which arise from the buyer’s inspection. And he’s also there if needed to drive our truck for moving, or even for a dump run or for taking a load of possessions to Goodwill or Arc.

We also have a certified home stager who provides our sellers with a free consultation to help their home show its best.

You’re familiar by now with how we create narrated video tours of each listing, including drone videos, but we also serve out-of-state buyers by shooting videos of other agents’ listings that interest them. Last June I did that for a Minnesota couple who felt they had “seen” an Arvada home well enough through my narrated video tour of it to go under contract, not visiting the home in person until they came for the inspection.

Speaking of inspection, experienced agents like us from a traditional brokerage can be counted on to recommend a good inspector who has a track record with them. Other specialists we know and trust — giving our clients the comfort to employ them — include estate sales companies, structural engineers, electricians, plumbers, HVAC companies, and more. The real benefit from these trusted vendors is that they will make sure you’re satisfied with their work, because they want to be referred to future clients.

“Full service” also implies availability and responsiveness. My broker associates and I are available 7 days a week, and we answer our cell phones on evenings and weekends. Although I have associates who can be my “boots on the ground” when I go on vacation, I take my cell phone (and laptop) with me, and I answer it when it rings.

Often we provide service for which we don’t expect or receive any compensation. For example, this past Sunday I got an inquiry from a man who had inherited his mother’s house and wanted an appraisal for tax purposes. I explained that only licensed appraisers can do appraisals but offered to do a free market analysis, which he happily accepted.  He may call me about listing it later on, but that’s not the point. I’m happy to be of service.

I follow a policy that I came to embody many years ago: Concentrate on giving and the getting will take care of itself.

New Report Reveals the True Cost of Selling Your Home to an ‘iBuyer’

Perhaps you’ve heard about the new concept in home selling called iBuyers. Open Door, Zillow Offers and OfferPad are offering this way of selling your home. Basically, these firms use their own cash to buy your home and then re-sell it for a profit.

If you’re a seller who needs to sell quickly and you’re not worried about getting top dollar (or paying less in fees), the iBuyer model is an option that may not otherwise be available to you. You avoid the uncertainty of not knowing how long your home will sit on the market — or whether it will sell at all.

A company called Collateral Analytics has published a study of 4,000 iBuyer transactions in Phoenix which outlines the costs to sellers and the earnings vs. risks for these iBuyer companies. The report’s title is “iBuyers: A new choice for home sellers, but at what cost?”  It was released two weeks ago. To read the full report, click on this link.

   The last paragraph in the report is a good summary of their findings: “These preliminary empirical results suggest that sellers are paying not just the difference in fees of 2% to 5% more than with traditional agencies, and a generous repair allowance, but another 3% to 5% or more to compensate the iBuyer for liquidity risks and carrying costs. In all, the typical cost to a seller appears to be in the range of 13% to 15% depending on the iBuyer vendor. For some sellers, needing to move or requiring quick extraction of equity, this is certainly worthwhile, but what percentage of the market will want this service remains to be seen.”

In May I got a call from a couple which was under contract with OpenDoor for $548,500, but with a 7% “service charge” and $38,563 for “repairs found in assessment.” This way of doing business annoyed them enough that they terminated with OpenDoor and listed with me at $498,000, selling for $507,000, which netted them more.

Above is one of 3 charts in  the report. The analysis is from Phoenix, where OpenDoor began buying homes in 2016, because they didn’t come to Denver until 2018.

I’ve written in the past about companies which will buy your home “as is” for cash without putting it on the MLS. Then they flip the property to a new buyer for a profit — profit that you gave up  by doing business with them. The same is also true with iBuyers.

Bottom line: Unless money is no object for you, you’ll do better listing your home with a full-service traditional brokerage like Golden Real Estate. Call any of us at the phone numbers below!