R+K Real Estate offers full-service real estate at a fraction of the typical costs. Is it too good to be true? Fair question! It may seem a little shocking at first, and I certainly don’t fault anyone for asking “What’s the catch?”. There are very good reasons for why we do what we do for our home seller and home buyer clients at R+K, and very good reasons for how we do it as well. Let’s break it down a little!
Let’s start with the question of “why?”: Why do we offer Flat Fee listing commissions, Buyer Gift Rewards, transaction brokerage and other things designed to lower commission costs? Two reasons come to mind: because we can and because we should! I’ve been in real estate for over 7 years and I’ve watched as the industry has increasingly altered the way that real estate is transacted. The way home buyers and sellers find and choose their Realtor has changed. Technology has improved the public’s access to data that was previously held only by real estate agents and government entities. The result has been a downward pressure on the cost of real estate services.
In most industries, a downward pressure on cost due to an increase in competition is seen as a good thing for consumers. Yet, many in the real estate industry seem to want to hold on to the past and find new ways to justify inflated costs. In a way, it’s hard to blame them. Over the years, it’s what worked and they’ve made a handsome living off of it. But, this is where I diverge from the majority of those who hold a real estate license. Technology has moved the role of the agent further away from the traditional model. From website syndication of house listings to electronic signatures and cloud data management, the focus of an agent’s daily workload looks very little like it did 20 years ago.
So, why charge fees as if nothing has changed? This is precisely the business model of any number of companies that have entered the real estate world recently. And many of them have changed things for good. Take Zillow, for example. Consumers have access to things that only agents had access to 20 years ago. That data may not be as good, or as accurate and timely, but it would be hard to argue that consumers are not better informed today with all the access to that data now at their fingertips. Some of these tech companies are seeking to find ways to cut out real estate agents altogether. In the industry, they are known as “disruptors.”
As technology has improved, it’s plain to see that across many industries, consumers are demanding a more fluid, transparent, and easier way to do business. Like any economy, consumers tend to want more service for the same price or less. Why should real estate be any different? This concept drives straight to the heart of my “why?” Technology has made my job easier, in some respects. I can transact real estate from anywhere at anytime. I have no need for an official office space. I can meet clients in a coffee shop or a park on a sunny day. I have access to the internet wherever I go! Transaction management and CRM software reduces the need for paid or salaried staff. I’m capable of doing my own marketing or hiring it out contractually.
Further, there are many observers who contend that the way real estate commissions function, housing costs are inflated for buyers. In an age when housing affordability is increasingly an important topic of discussion, this can make real estate agents look tone-deaf. In fact, this is precisely the argument made by the United States Department of Justice. This past year, they and the National Association of Realtors came to an agreement to increase the transparency of buyer agent commissions to home buyers. Many have ventured to guess what effects this will have on buyer agent commissions, but few have predicted that they will increase due to the change.
If I’ve managed to create a real estate company that has all but eliminated any overhead costs, should I keep charging the same-old fees to my clients? Or, should I share my cost savings with my client and provide the same level of excellent service at a large reduction in the cost of commissions and services? It’s probably not hard to guess which way I decided to go. My goal has been to provide my clients with a smooth and transparent real estate experience and to share my cost savings with them!
So, if you ever hear someone refer to R+K Real Estate Solutions as a “discount broker,” you know this is clearly not true. We are a full-service company that leverages technology to the benefit of our clients. Pure and simple. And an answer to the question of “why?” I think most people would agree it’s a pretty good one!
All of this should make it quite clear as to “how” I do what I do as well. I’ve already discussed how we eliminate most of our overhead. If you ever ask another agent to justify their commission, we have a pretty good idea of the laundry-list of reasons they might provide. Some are at a franchise and a certain percentage always has to go to the franchise company. Others might mention things like having to pay taxes or health insurance. But don’t we all do those things? A big reason many will give is that they have to split their commission with their broker. Fair enough. But here at R+K, I am the broker. I don’t split my commission with anyone. It’s simply a “cost” that I don’t have.
I hope this paints a picture that describes “how” and “why” we can provide full-service real estate at a cost well below the industry averages. And, I also hope that this provides a great answer to the question, “Is it too good to be true?” There is a part of real estate law that I take very seriously, and that is an agent should represent their client to the best of their ability. What it does NOT say anywhere is that an agent should work only so hard as in proportion to what they get paid in a transaction. A Realtor should work 100% for every client, whether they make a $100 commission or a $10,000 commission. That is why it is indeed not too good to be true, and why we refer to R+K Real Estate as the “transparent alternative” to high-priced real estate commissions!
Through it all, I believe strongly in two things: I believe in the law of abundance and that there is room in the local market for all real estate models, and I believe that consumers benefit from having access to choose among those models.
-Ryan Desch, Broker/Owner, REALTOR