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Flat-fee Versus Commission-based Real Estate Business Models

On April 25, 2013, Help-U-Sell Bay Beach Realty broker/owner Dan Desmond and Scott Einbinder, a veteran real estate salesperson and consultant, in Toms River, N.J., will debate which real estate business model is superior: flat-fee or commission-based. Proceeds from the highly anticipated event will benefit the local Habitat for Humanity chapter.

Dan Desmond, Help-U-Sell Bay Beach Realty
Dan Desmond of Help-U-Sell Bay Beach Realty will debate the merits of the flat-fee business model on April 25, 2013.

While Desmond will be speaking on his own behalf and not as a representative of Help-U-Sell Real Estate’s corporate office, we are looking forward to cheering him on in about two weeks’ time.

Since we began operating in 1976, Help-U-Sell Real Estate has practiced the flat-fee (or set-fee) business model. Our founder, Don Taylor, thought the idea that consumers paid high commissions, based on the sale price of a home and not on the actual cost of marketing the home, could be improved upon.

Our brokers, all members of the National Association of REALTORS, offer the same full service as commission-based brokers, but charge a flat fee instead of a variable percentage. The flat fee is always at a savings for our sellers. However, we are not discount brokers. Our brokers determine their flat fee based on solid business practices (the market conditions, their profit margin and the cost to perform services) and not based on what the broker next door is charging.

Last year, our offices saved sellers $12.5 million in commission fees, when compared to a 6% commission. To us, a flat fee just makes sense for everyone: our sellers, our brokers and our brokers’ agents.

If you would like more information about how Help-U-Sell Real Estate’s set-fee business model works, visit our Franchise Opportunity Center website or contact us.

Top Producers for March 2013

Help-U-Sell Real Estate Just Sold postcard
Help-U-Sell Direct Savings Real Estate is tied for second place in our top producers list for March.
It might still be cold in some parts of the country, but spring arrived early for many of our Help-U-Sell offices.

1) Back on top, Help-U-Sell Honolulu Properties closed 14 sides last month. All but one were seller sides.

2) Help-U-Sell Direct Savings Real Estate, in Waynesboro, Va., tied for second place with 12 closed sides. Four were seller sides, two were buyer sides and three were dual-sided transactions.

2) Also with a dozen closed sides, Florence, Ala.’s Help-U-Sell Quad Cities Realty closed seven seller sides, one buyer side and two dual-sided transactions.

3) York, Penn.’s Help-U-Sell Hometown Realty rounds out the top three with 11 closed sides: four seller, three buyer and two dual-sided transactions.

Congratulations to all of our top offices and the ones who almost made our competitive list for March!

[Updated figures as of April 10, 2013.]

Spring Training for Real Estate

It’s that time of year when Major League Baseball comes out of hibernation and spring training begins. You don’t have to have a multimillion dollar contract to take part in your own version of spring training. Invaluable educational opportunities can be had for free or little cost.

Help-U-Sell Real Estate's weekly sales and marketing training
Help-U-Sell Real Estate offers its franchisees a weekly sales and marketing webinar.

Here are a few opportunities to improve your pitch, practice your swing and better your chances for a home run:

* Participate in the weekly Help-U-Sell meetings: Tech Time Tuesday and Wednesday’s Power Hour. Both are from noon to 1 p.m. ET. Help-U-Sell brokers and agents, email us to register for these free online training sessions.

* Attend one of Inman News’ Agent Reboot events. These one-day sessions are fast-paced, fact-packed and feature top real estate marketing and technology experts. The cost is just $49. Remaining locations for 2013 include Orange County (Calif.), Boston, Dallas, and Fort Lauderdale.

* Register for Zillow Academy webinars. The academy offers at least one webinar every weekday on topics ranging from Zillow-specific tutorials to blogging techniques and time-management tips.

* Take advantage of National Association of REALTORS free or low-cost educational opportunities.

You can also find free webinars through Inman News and other online entities. If you have any courses to recommend, please tell us about them in the comments.

The Broker-Centric Business Model

In the past few weeks, two opinion articles touting the merits of the smaller, broker-centric business model have appeared on renowned real estate news websites, AGBeat and Inman News. We couldn’t agree with these sentiments more. Help-U-Sell Real Estate’s business model has been broker-centric since the company’s founding in 1976. We believe that it’s the best real estate model because:

    1) it’s more efficient.
    2) it creates agents who have had more transactions and, therefore, more experience which enables them to better serve buyers and sellers.
    3) it’s more cost-effective.
    4) it creates a more manageable workload for agents.
    5) brand consistency is better controlled when one person (the broker) is in charge of all advertising and marketing.

The entire staff of one of our most successful offices, Help-U-Sell Direct Savings Real Estate
The entire staff of one of our most successful offices, Help-U-Sell Direct Savings Real Estate in Waynesboro, Va.

Most importantly for us, however, a broker-centric model enables our offices to offer consumers choices, ultimately saving the consumer money compared to the old-fashioned agent model. That model, while slowly fading away, seems to exist only to support the inefficiencies of that old business model.

If you would like to learn more about our business model, we invite you to visit our Franchise Opportunity Center website.

We also encourage you to read the two articles, if you haven’t already, and leave your comments as to how the broker-centric business model works for you.

Broker Focus: Steve Vincent

Steve Vincent of Help-U-Sell Triad Realty in Greensboro, N.C.
Steve Vincent of Help-U-Sell Triad Realty

As a licensed broker for 11 years, and an active real estate investor for about 16 years, Help-U-Sell Triad Realty’s Steve Vincent knows a thing or two about long-term commitment. He says this consistency is the key to marketing success, too, especially on Facebook.

Triad Realty’s Facebook page has existed for maybe two years, but he didn’t concentrate on it until recently. “It’s become essential to stay in touch,” Vincent, a former Facebook skeptic, says. He now counts it as one of the important spokes in his marketing wheel. This new commitment has produced some results already.

The page has increased its number of fans by 60 or 70 since early February, and Triad Realty has acquired two seller clients through Facebook. One client saw his seller’s photo of her “Under Contract” sign on her Facebook wall and contacted Triad Realty about listing with the office.

The other client, who’s likely to sign this week, is friends with one of Vincent’s personal friends. She has been keeping track of Triad Realty’s activities on Facebook and recommended the office to her friend who’s getting ready to sell.

“Over the last two years, I’ve been communicating with her [Vincent’s friend] without even knowing I was doing it,” he says.

Vincent is still in the learning stage and doesn’t consider himself a Facebook expert, but he has discovered a few methods that have worked for his audience.

    Be willing and able to post often. You can’t post once or twice a month and expect something to happen. Over time, you build your brand.
    Personal posts are best. Congratulating clients, with or without an accompanying photo, seems to get the most reach and interaction. New listings are second best, and third-party blog post links get the least response.
    Keep posts shorter and simpler. These get more interaction and views.
    Ask friends and clients to like your page. “We’re not shy anymore about asking people to like our page,” Vincent says. Triad Realty is promoting the page via email, in person and through other methods.
    Make your page sticky. Vincent has contracted with a third-party company that supplies his page with up-to-date real estate information, including school reports and recent home sales. It also links fans to his website to search for homes.

Next on Vincent’s Facebook marketing agenda is soliciting more client testimonials. So far, the page has received a few glowing posts from happy buyers and sellers just by happenstance.

While Facebook is the newest marketing tool, he remains loyal to his first method also. “The most effective marketing we do is our arounds postcards – our just listed/just sold postcards. They are a staple from the beginning,” Vincent says. As an extension of those, he has added the new co-op postcards to his marketing plan for this year. He intends to send to the same carrier routes at least six times this year, continuing with his belief in consistency.

Tell us about your marketing successes or ask us for Facebook tips in the comments section.

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