Flat- fee brokerage firm enters market
Metro Denver yards will start sprouting a new kind of for- sale sign, ones from Homie, a Utah real estate brokerage that charges a flat fee of $ 3,000 to sell a home rather than the typical sellside commission of up to 3% of the sales price.
“We view ourselves as a disruptive real estate company that uses technology to streamline the process and reduce the fees,” said Melissa Millan, the company’s general manager in Colorado. “We want to have your back as your homie would.”
Several brokerages — including Trelora, Redefy and REX — have entered the fray in metro Denver, offering a flat- fee or heavily discounted listing commission. So far, they haven’t overturned the conventional commission structure, which runs 5% to 6% on a sale.
Homie, by contrast, got its start in Salt Lake City in 2015 and is now that state’s leading brokerage in sales volume, Millan said. It hopes to repeat the pattern in Colorado, where it will officially launched on Tuesday.
Homie agents are employees rather than contractors and a customer is given a dedicated agent, avoiding the practice at some flat- fee brokerages of handing consumers off to different specialists through the process. Except for home showings, now out of favor anyway during the pandemic, the brokerage is full- service, rather than a la carte or bare- bones, Millan said.
Buyers using Homie can receive a rebate of up to $ 5,000 and Homie sellers are allowed to determine what commission they want to pay the agent who brings in a buyer. The company recommends paying 2.5% to 2.8% of the sales price, which should help keep the buyer agents engaged.
If a Homie seller completes a deal with a buyer represented by another Homie agent, they pay a flat fee of $ 2,500.
At October’s median home sales price in metro Denver, a 6% commission rate would cost about $ 31,000 versus the $ 5,500 paid by a Homie seller who stays “in- house.”
Millan said technology has streamlined the homebuying process and allows consumers to do more of the legwork, adding that over time, it is getting harder to justify a commission structure established years ago when agents carried more of the load.
Homie is not just looking to get both sides of the sales transaction when it can. The brokerage will help its clients obtain mortgage, title and insurance services in one- stop if they want.
Real estate trends analyst Mike Delprete said in a blog post that the next generation brokerage models such as Orchard and Homie, which employ full- time agents, are seeing clients use mortgage services at an 80% rate.