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'Your Business Model Sucks. I Hope It Burns': Fear & Loathing In Real Estate

DENVER (CBS4) - Rocks thrown through windows, cars keyed and furious voicemails. The CEO of a startup Denver real estate company says that's some of the collateral damage of his business model after five years.

"I think a lot of agents are fearful so some have come to the solution that threatening or harm is the best way," said Joshua Hunt of Trelora, a disruptive real estate company that has traditional real estate agents angry and refusing to show homes listed for sale by Trelora.

"I think we are out to change the industry", said Hunt. "We're coming and every agent who wants to laugh at us, we welcome the laughter."

Joshua Hunt
CBS4's Brian Maass interviews Joshua Hunt.(credit: CBS)

Trelora -- a play on the word realtor with the letters jumbled -- offers home sellers the opportunity to list and sell their home for a flat $2,500 fee as opposed to the traditional 2.8 or 3 percent commission selling agents typically collect.

Joshua Hunt
CBS4's Brian Maass interviews Joshua Hunt.(credit: CBS)

Trelora also says home sellers can decide to offer agents representing buyers just $2,500 in contrast to their typical 3 percent commission.

Hunt acknowledges that as many as 40 percent of buyer agents are refusing to show Trelora listings, an expression of their displeasure with the low Trelora commissions.

"We believe 40 percent of agents will go out of their way to not show your home if there's a Trelora sign in the yard ", said Hunt. "It's a disservice at the highest level to your client."

Multiple Denver realtors confirmed to CBS4 that real estate agents are not showing their clients Trelora homes.

CBS4's Brian Maass interviews Nancy Griffin.(credit: CBS)

"There are some buyer agents who don't show that property," said Nancy Griffin, a RE/MAX realtor. "If you do a job and do it well you expect to be paid for it."

RE/MAX Nancy Griffin
Nancy Griffin (credit: CBS)

Trelora believes the customary 2.8 to 3 percent commissions are a relic of the past, as so many buyers identify homes they are interested in by searching online themselves and the company believes there is less for real estate agents to do. Likewise, Trelora believes sellers would rather skip spending money on marketing campaigns and pocket those savings themselves.

Hunt said last year Denver real estate agents collected $1.2 billion in commissions on home sales. He said those commissions should have been around $200 million.

Denice Reich, who has been a Denver realtor since 1974, says she typically spends $5,000 marketing a new listing.

(credit: CBS)

"How do they expose those listings with $2,500 fees? You can't do it. Impossible," said Reich. "You get what you pay for. You don't go out and hire the cheapest brain surgeon. This is your house."

How angry are traditional real estate agents with the disruptive Trelora model? The company shared with CBS4 several recordings of realtors who called the company to express their displeasure at the business model that is cutting into commissions.

Denice Reich
Denice Reich (credit: CBS)

"You're pissing off every broker that wants to show your house so nobody wants to show your house," screamed one realtor in a phone call taped by Trelora.

"I don't give a (expletive) what happens to your company. I hope it burns. It will. I don't even have to hope for it. Your business model sucks," yelled the broker.

Hunt said that call was not unique and he wants realtors and agents to know their angry calls will be taped and disseminated.

"We will record them and make it public. We absolutely will," said Hunt.

investigation (2)
(credit: CBS)

Realtors contacted by CBS4 said for the most part their full-service approach justifies a higher commission.

"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," said Griffin. "If you're making the minimum on something, are you giving your all to the cause?"

Reich said her experience in the market is a difference maker for clients.

"Experience in my opinion is everything -- and marketing."

Hunt says after five years in the Denver market his company is doing well and is considering expanding to other states.

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