Upstart brokerage outs commission offers — again

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Upstart brokerage outs commission offers — again

‘I’m sure we’ll take flak,’ said Trelora CEO Joshua Hunt
Published 2 hours ago
Teke Wiggin
Key Takeaways

  • In 2015, Colorado low-fee brokerage Trelora briefly published the compensation offered to buyer’s agents by listing brokers, and now the brokerage is doing it again.
  • Trelora says it wants to spread awareness that buyer’s agents’ compensation is negotiable.
  • To comply with MLS rules, Trelora is only making commission data available to consumers who fill out a non-exclusive, non-binding buyer’s agency agreement online.

Fresh off a funding round, low-fee Colorado brokerage Trelora has started outing commission data — again.

The company is revealing how much compensation listing agents are offering buyer’s agents through the MLS. Registered users can access the data on Trelora’s website.

The move is likely to rankle some in the industry, just as a previous attempt to display the data did in 2015.

“I’m sure we’ll take flak,” said CEO Joshua Hunt. “The industry is scared to death of us.”

Trelora — which charges all buyers a flat fee of $2,500 to $3,000, depending on service level — closed more than 700 transactions through the MLS in 2016, up by around 30 percent from the previous year, according to Hunt.

He added that the brokerage also did “not a shameful number” of deals off the MLS, but declined to disclose the exact number.

"Expose Commissions" module shown on one listing to an unregistered homes.trelora.com user.

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By shining a light on commission data, Trelora wants to spread awareness that buyer’s agents’ commissions are negotiable.

“This is a step of educating buyers … that you don’t have to let your buyer’s agent receive 2.5 or 3 percent,” Hunt said.

The last attempt, and what’s different

In 2015, Trelora made waves by publishing commission data on its website for all visitors to see.

But the startup quickly removed the data once the local MLS, REcolorado, sent a cease-and-desist letter. The letter alleged that Trelora had violated rules that govern the internet data exchange (IDX) feeds that local brokers use to display listing data on their websites.

This time, Trelora is only making the data available to consumers who sign a non-binding and non-exclusive buyer’s agency agreement by checking a box and registering a name, email address and phone number on the brokerage’s website.

“The argument was that we couldn’t disclose information to people we were not representing, and so we have built a special terms of service and agreement with the Colorado real estate buyer agency agreement,” he said.

Trelora also “built the database and code in such a way that that we’re honoring the agreement with IDX and REcolorado,” Hunt said.

Trelora has been in close contact with REcolorado, and the MLS is aware of how Trelora is showing commission data, he added.

REcolorado spokeswoman Deborah Shipley told Inman via email that the MLS is “currently reviewing” the commission information on Trelora’s site, and doesn’t currently see a violation of the National Association of Realtors’ “model rules.”

“Over the next several weeks, we will be thoroughly reviewing Trelora’s site to ensure it does indeed adhere to our rules,” she added, to include consulting with NAR and REcolorado’s legal counsel.

Visitors to trelora.com listings see a blacked-out number next to text that sits beneath a property’s asking price. The text reads: “Commission Offered.”

Visitors can click a question mark and sign up to unlock the information.

Users are also encouraged to register beneath a listing’s photo gallery, so they can see how much they would save on commission by using a Trelora agent. The site dangles the hidden information with the come-on “Expose Commissions” tab.

Visitors who register often learn that they will purportedly save tens of thousands of dollars if they buy with Trelora rather than with an agent who collects a listing’s full offer of compensation.

For example, a $1.595 million listing that offers a 2.8 percent commission to buyer’s agents informs registered users that they would save $42,160 by using a Trelora agent (assuming the traditional agent wouldn’t rebate any of the buy-side commission to their client).

By serving up data consumers can’t easily access elsewhere, Trelora expects to attract more prospective buyers to its website, potentially generating new business for the brokerage.

Trelora closed a $4.4 million funding round in mid-December and plans to expand, though Hunt declined to reveal any of the markets in its crosshairs.

Email Teke Wiggin.

How to make the most of open houses

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How to make the most of open houses

In our latest research, real estate professionals say how they really feel about open houses — the good, bad and the ugly.
BY GILL SOUTH – Staff Writer – INMAN

Key Takeaways

  • More than two thirds of the respondents think open houses are still worthwhile.
  • Nearly 70 percent of respondents have sold a home as a result of a connection made at an open house.
  • Consumers still want their agents to offer open houses.
  • Two thirds of respondents’ brokerages offer virtual tours, while a quarter do not.
  • More than two thirds of respondents felt that virtual tours replacing open houses was unlikely.

It’s 11 a.m. and brunch is calling your name. But instead of meeting your friends for breakfast tacos, you’ve got to get your game face on — and it’s not to cheer on your favorite football team. Signs and balloons in hand, you’re out the door for this afternoon’s big hoorah: Open House Sunday.

Love them or hate them, to many in the business these regular marketing events are a “necessary evil,” while others put a more positive spin on this opportunity to interact with their community.

With so much of the property search being done online, including some excellent virtual tours in real estate, are they really worthwhile in this day and age? Surely people see a property they like online, then if they are serious, make an appointment to go and see it with their agent.

Download the report with full findings here

Who responded?

But in this month’s research conducted between Aug. 1, 2016 through Aug. 8, 2016, Inman’s 923 survey respondents who participated in giving their take on this contentious topic generally said “yes,” open houses are still worthwhile. This sentiment was expressed by a good majority, with 68 percent giving open houses a rating of five out of 10 or higher.

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And although virtual tours are an extremely welcome add to the mix, the overwhelming response by survey participants (more than half of whom were senior agents and brokers with more than 10 years in the business, and another 12 percent who’ve been in the business for six to 10 years) was that digital offerings are not going to replace the touch, feel and smell experience of an open house, a form of marketing that seems to polarize the industry.

Industry statistics support this research. According to the National Association of Realtor’s (NAR’s) 2015 Profile of Home Buyers and Sellers, open houses remain one of the most popular ways real estate agents market their homes. They come in third, equal with agent websites, after putting the listing on the MLS and sticking up a yard sign.

In the NAR’s 2016 Member Profile, 37 percent of respondents said they received some business from open houses, while 63 percent said they did not.

As one experienced Washington, D.C., broker put it in our research: “Real estate is still primarily a face-to-face, people business. Open houses are one more opportunity to meet more people, make connections and grow your business.”

“An open house gives me the chance to meet people and show them the knowledge I have about the market. Open house contacts are about 20 percent of my business,” said a successful Indianapolis agent.

Of course, it’s well-known that agents find open houses worthwhile, not only to sell a house but to find buyers for other properties.

An active Pennsylvania agent added: “In our market, about half of those looking at open houses are unrepresented. It’s a chance to show your professionalism and engage them in person, which is vital.”

One California owner/agent was strong proponent of the open house. “I have sold over 500 homes from this. The only people who would say open houses are not worth it, are the types that sit there when clients come in and do not engage, connect or take interest.”

Just the advertising alone for the open house generates “tons more activity” on the home that it wouldn’t have received otherwise, said another advocate in the survey.

Why some agents hate open houses

While the research gives open houses the thumbs up, it also made it clear that not all agents like them. A little over 30 percent of respondents gave them a low one-out-of-10 to four-out-of-10 rating, and they spoke passionately about their objections to what they called this “crapshoot.”

An experienced Nashville broker summed up his concerns in these bullet points: “Time consuming. Costly. Unquantifiable. Risk to safety. Risk of theft. Unnecessary in today’s market. A stab in the dark.”

Another agent, who said she came close to being raped at an open house years ago, is understandably against them, and not just for safety reasons.

“When we develop a skill set to educate sellers on the reality that open houses are ‘so yesterday’ and explain to them that they can sleep in on Sundays, have brunch, watch the game instead of open their home for virtually no reason, it makes sense to them. Plenty of buyers will come on any other day of the week, and if they really want to see that house, they will make an appointment.”

There is real resentment about the “come one, come all” side of an open house among those in the anti-open-house camp.

“I have heard the analogy used: it is much like hitchhiking — you are allowing everyone access to your home,” said one respondent.

There’s more and it’s interesting…………………………….

Required Realtor background checks ?

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Required Realtor background checks ?

Daily Marketing Services Nashville

by Marian McPherson Staff Writer for INMAN
  • In November, South Carolina authorities found a woman in a metal container on now-former real estate broker Todd Kohlhepp’s property. He’s been connected to seven murders.
  • Kohlhepp served a 15-year sentence for raping a teenage girl but still obtained a license in 2006 when there was no background check requirement in place by the state commission.
  • This month, Rep. Chip Huggins pre-filed the “Todd Kohlhepp Bill” to require national background checks at the time of application and every two years during renewals.

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Some say “what you don’t know won’t hurt you,” but for the community of Spartansburg County, South Carolina, what they — and the South Carolina Department of Labor, Licensing and Regulation (LLR) — didn’t know about former real estate broker Todd Kohlhepp put them in grave danger.

In November, Kohlhepp was arrested after a missing South Carolina woman was found in a metal container on his property. Shortly thereafter, the bodies of a 25-year-old woman and a 29-year-old man were also found.

In light of the Todd Kohlhepp case, South Carolina Rep. Chip Huggins pre-filed the “Todd Kohlhepp Bill,” which would require real estate agents to pass a national background check during their initial licensing application, and again every time they renew their license, which is currently every two years.

The discovery of the missing woman and the bodies catalyzed other disturbing details about Kohlhepp to resurface, such as a 15-year jail sentence he served for forcing a 14-year-old into his bedroom (at gunpoint) and raping her.

Police connect him to at least seven other killings, including a quadruple murder at a motorcycle shop that has gone unsolved for years.

One of the most chilling aspects about Kohlhepp was that clients, who gave him a bevy of five-star reviews on Zillow, were completely unaware of his gruesome history. He also had nearly two dozen recommendations on realtor.com.

Zillow reviews of Kohlhepp before his profile was removed.

Furthermore, the South Carolina LLR real estate commission was oblivious to the broker’s past — at the time he applied for the license, the department didn’t perform background checks to verify an applicant’s criminal history (or lack thereof).

“If someone is a known criminal, maybe they will reconsider trying to get a license for something they know they’re going to have an issue with if that background check is going to show something that they’ve done,” said Rep. Huggins in an interview with WSAV News.

“That person that calls you to buy a home, buy a property or whatever, they’ll hopefully have a little better feel that this background check’s been done so I’m dealing with someone that at least has been checked out as best we can.”

Huggins also said he might consider tweaking the bill to require real estate license renewal every year instead of every two years.

Email Marian McPherson

Agents beware of Opendoor’s business model.

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10 ways the startup could change the game for agents and brokers.Key Takeaways

by Teke Wiggin Staff Writer  INMAN

Opendoor’s deployment of $320 million in equity funding and $400 million in debt will send shockwaves across the industry.

An event for and by the real estate tech community

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Property-exchange platform Opendoor just bagged what is probably the largest funding round ever for a real estate tech startup, with a reported valuation of at least $1 billion only two years after launch.

The startup is overhauling the traditional real estate business model in a fundamental way. It buys and sells homes itself, giving it unprecedented flexibility to improve speed, convenience and customer experience.

Opendoor’s deployment of $320 million in equity funding and $400 million in debt will send shockwaves across the industry, perhaps most by popularizing new technology and business practices.

“If we can innovate in the space and have other people mimic or reproduce that innovation, that’s a huge win for the consumer and that’s what customers are going to demand,” said Opendoor CEO Eric Wu.

Here are 10 ways Opendoor could impact the industry in the next year or two.

1. Expansion

Opendoor only operates in Phoenix, Dallas and Las Vegas but plans to expand to 10 cities in 2017. By 2018, it wants to be in 30 cities, according to Forbes.

Wu wouldn’t confirm the reported 2018 target, declining to provide more details on expansion plans.

2. New opportunities for agents

Opendoor sells properties through a brokerage subsidiary, but it also lists some inventory with agents at other real estate firms.

For example, Jake Shuler, an agent at Plano, Texas-based Keller Williams Realty Plano, is a member of the Opendoor team, according to Opendoor’s Zillow profile.

Enterprising agents may be able to win new listings when the startup lands in their market.

It also will offer opportunities to buyer’s agents.

Its keyless-access technology eliminates the need for agents to accompany clients on visits to Opendoor listings if they’re tied up. And the startup could theoretically generate more inventory, nudging some would-be sellers off the fence.

Opendoor pays agents the going rate for bringing a buyer to a sale. And it offers a 1 percent discount to consumers who agree to sell their home to Opendoor and purchase their next one using an Opendoor “partner agent.”

Two Opendoor customers say the ‘discount for buying direct,’ clear communication and simplicity were what they liked most about the startup.

3. New competition for agents

That said, Opendoor is an alternative to listing with a brokerage.

Homeowners can sell directly to the startup and close in as little as three days, rather than sell through an agent and close at an unknown time — if at all. And although it currently works with buyer’s agents, it’s building machinery that can encourage buyers who purchase its homes to work without agents.

Opendoor offers a discount to consumers who “buy direct” from the startup.

But Opendoor’s goal “isn’t to displace Realtors,” Wu said. “It’s to build the best possible customer experience.”

“There’s also a world where we help work with agents to build the best experience,” he added.

4. Lower fees

More funding may help Opendoor reduce its service fee, which ranges from 6 to 12 percent, allowing it to edge closer to competing on price.

In fulfilling its mission of the best possible experience, “part of that is how much customers have to pay,” Wu said.

But Opendoor is focused, first and foremost, on investing further in the automated valuation models (AVMs) it uses to make fast offers on properties.

“We want to first use that capital to improve accuracy, building a world-class pricing model so that people get a fair market price,” he said.

‘Coming soon’ listing on opendoor.com

5. Imitators

Opendoor’s success has not gone unnoticed in Silicon Valley. Knock has launched a similar business model in Atlanta, and Opendoor’s latest cash haul may spur others to follow suit.

Venture-capital firms that weren’t able to participate in Opendoor’s latest funding round will hunt for imitators.

“I’m sure there’s going to be competition at some point,” Wu said.

Opendoor mailer

6. More showings without real estate agents

Some agents don’t think buyers should be able to access listings without agents present.

But Opendoor lets buyers visit its listings anytime from 6 a.m. to 9 p.m., seven days a week. The startup’s keyless-access technology has delighted consumers and helps the startup purportedly attract three times as many visits as the typical listing.

Not wanting to be outdone, more listing agents may adopt similar technology. Some options offer a custodial role to agents, including Toor and Prempoint, which was unveiled at a recent National Association of Realtors (NAR) conference.

MLSs may need to loosen their rules to accommodate agent-free showings.

7. Growth of home-sale guarantees

Some agents promise to sell a listing for free if they don’t sell it within a certain timeframe.

“I’m leaning toward Opendoor because it guarantees a sale at a fair price,” a consumer might tell an agent.

Agents with guaranteed-sale programs could respond: “So do I, but for a lower fee.”

8. Foster streamlined underwriting

Buyers who use Opendoor’s “preferred lender” can close faster and for a lower fee (they get 1 percent off closing costs if they work with the preferred lender) than they can by working with many traditional lenders.

The startup will continue to look for ways to streamline the underwriting and closing process, innovating with lenders or perhaps even offering seller financing.

This will put pressure on the mortgage industry to up its game.

9. More mortgage financing by private equity and hedge funds

Opendoor can snap up homes so quickly, in part, by drawing on a line of credit from at least one private-equity firm.

The payoff of this arrangement for both Opendoor and its financier might prompt more non-bank financial firms — such as private-equity companies and hedge funds — to wade further into the mortgage space.

Such companies have already been increasingly funding mortgages through online lenders and real estate crowdfunders.

Buyers might be able to more easily qualify and close on such mortgages than traditional home loans. Opendoor’s growth could catalyze acceleration in this arena.

10. Simplified title services

Opendoor uses Fidelity National Title to facilitate a majority of its transactions.

The two companies are presumably collaborating to simplify title transfer, insurance issuance and escrow services.

Other title companies would try to replicate successful innovations. Blockchaintechnology could help drive this, such as by undergirding e-signing.

Email Teke Wiggin.

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You should be selling while others hibernate

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You should be selling while others hibernate.
By Richard Courtney – Christianson Patterson Courtney & Associates

(As seen in the 11/25/16 Ledger column)

With Thanksgiving hovering, listings usually go into hibernation this time of year as sellers do not want to be inconvenienced with showings over the holidays.

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Once the leaves fall from the trees and the green abandons the grass, the city switches from color to black and white. Some feel that backdrop is not conducive to the home-selling experience.

Based on the Greater Nashville Association of Realtors sales data, the number of transactions will drop substantially to a number that is half the monthly sales that the area amasses in the spring and fall markets.

Many sellers feel that by awaiting the spring market, they will receive more money for their homes than in the dark, cold winter months.

While the market comes alive in the spring – spring now being late February on the real estate calendar – the volume increases and the prices are higher than those of the previous year.

However, sellers should be advised that there are as many people relocating in the area in the winter as there are in the spring.

Additionally, with many of the would-be competitors waiting for the robins to sing before marketing their homes, the competition is significantly reduced. Showings slow as only serious buyers are braving the elements to shop for housing.

Many successful, veteran agents will testify to the fact that they make their hay when the sun is not shining, selling while the competition is taking a break for the holiday.

Houses cannot sell when they are not on the market.

There are several groups of people that start new jobs in the beginning of the year.

Many of those come to town and lease, beginning their searches in January with plans to buy, close, move and bring the family after the end of the school year.

Sellers should not be deterred by dropping mercury.