Sell Your Home For No Commission? Changing Face Of Colorado Real Estate
By Brian Maass
ENGLEWOOD, Colo. (CBS4) - A small real estate startup based in Englewood boasts it now allows sellers to sell their home and pay no commission on the sale, another salvo in the ongoing shakeup in the way Colorado residents can now buy and sell homes.
"Theres a lot of different ways to slice up this market. I think consumers are going to have a lot of different choices", said Jon Dobbertin, one of the founders of BlueMatch, which has been in business about a year in Colorado but is now expanding to New York, Minnesota and Washington State.
The company believes the traditional model of a home seller paying about six percent of the sale price to real estate agents involved in the transaction is outdated with more and more homeowners doing their own internet research, diminishing the importance of traditional real estate agents.
"Our model isn't for everybody," said Dobbertin. "Some people really need an agent and they are willing to pay fees and that's perfectly fine. We don't think real estate is a winner take all market."
BlueMatch gets a flat fee from sellers of $2,995 to help in selling the property. But if the seller then uses a BlueMatch agent or affiliate agent to buy their next home, the company rebates that initial $2,995 fee creating the zero cost sale.
"So we are exchanging our listing commission for a buying commission," said Dobbertin. "We're working on very small margins. We have to be efficient and streamlined with our process. You're not having to rely so much on agents trading MLS sheets like they did back in the olden days."
His partner, Solomon Geigle, said the company is able to save sellers thousands of dollars.
"On a $300,000 to $400,000 house, $6,000 to $9,000" in savings, said Geigle.
One of the more controversial entrants into the Colorado real estate market is Trelora, which is disrupting the traditional commission structure for real estate agents, charging homeowners $2,500 to sell their homes and offering buyer's agents a $2,500 flat fee - far from the traditional 2.8 percent buyers and sellers agents are used to receiving.
Trelora founder Joshua Hunt told CBS4 they "are out to change the industry, and every agent who wants to laugh at us - we welcome the laughter."
Trelora's business model, shifting commission dollars away from real estate agents and back to consumers, has created a rift between Trelora and the real estate agent community. Hunt acknowledges that they "believe 40 percent of agents will go out of their way not to show your home if there is a Trelora sign in the yard."
To verify that, Trelora now routinely records phone calls it receives from angry agents.
The company shared a recent recording it made of real estate broker Shelley Hodge, who was considering showing a Trelora home to a buyer, but wanted to make sure she would make more than $2,500 if her buyer purchased the home.
"So you need to ask your seller if there is a full offer from Shelley Hodge is he prepared to pay the 2.8? If he says no, I go. I'm a paid Realtor, commission 2.8 take it or leave it, otherwise I move on," Hodge is heard saying on the call to Trelora. "I'm not going to show this property," Hodge tells the Trelora employee.
The worker says that "by your fiduciary duty you should show it regardless of the commission."
Hodge responds, "I will show the property if I'm going to get paid. I don't work for free."
In a follow up phone interview with CBS4, Hodge called Trelora "ridiculous. I will avoid them like the plague."
She said she ultimately would not show the property to her buyer because she was not guaranteed a 2.8 percent commission. She called the $2500 flat fee offered by Trelora "an insult."
Traditional real estate agents say their personalized service is invaluable and well worth the commissions they receive.
"You don't go out and hire the cheapest brain surgeon - this is your house," said Realtor Denice Reich, who has been in the Denver real estate market for decades. She said the flat fee and low cost models proliferating in Colorado mean "you get what you pay for."
Reich went on to criticize the new flat fee models saying, "you cannot give the service and advertise and do what we do in my opinion. It can't be done".
Other Realtors like Nancy Griffin, say they can offer buyers and sellers information and insight that the newer companies are lacking.
"You need expertise, savviness, technical advice - you need all these things. As a seller you get inundated. If you as a seller need a handyman or a contractor I would know those people and would be able to help you with that."
CBS4 Investigator Brian Maass has been with the station more than 30 years uncovering waste, fraud and corruption. Follow him on Twitter @Briancbs4.