Gary Greene launches service to advise sellers
Brokerage will let clients compare offers from iBuyers, the companies that buy houses without a traditional listing
Houston real estate brokerage Gary Greene launched a service last week that allows clients to compare offers from iBuyers, the techcentric companies that buy houses directly from homeowners who want to avoid the traditional listing process.
The initiative, Offer Optimizer, uses data from past iBuyer purchases in Houston to estimate how much each company will offer on the home and charge for repairs and fees. The seller can then compare those numbers to offers and costs they would incur if they put the home on the market.
The move makes Gary Greene, one of the largest residential brokerages in the Houston area, the latest to embrace iBuyers.
While traditional real estate agents at first criticized the iBuyer model, which allows homeowners to sell without an agent, many are now pursuing a cut of iBuyers’ business by making the case that agents are needed even when selling directly to a large company.
A recent study from the Houston Association of Realtors suggests homeowners may be receptive to doing just that. It found that 41 percent of all sellers would consider an iBuyer offer; of those, 92 percent would still want to be represented by a real estate agent.
Brokerages including Gary Greene and Keller Williams are betting homeowners will want expert guidance enough to pay a little more than they would have had they gone directly to the iBuyer. In addition to iBuyer fees, which typically range from 6 percent to 9 percent, agents are asking for their own commission.
Pattie Huey, Gary Greene’s director of business development, said the additional fee is worth having an expert to navigate the sea of iBuyer offers. “When people just click, and they never have a real estate agent enter the conversation, they have no clue what they’re leaving on the table, if anything. … We’re going to show them all the offers, line by line by line. And we’ll show them what they’ll sell for on the market, line by line by line.”
She said that while iBuyer offers often come in around market value, the fees and repair costs can add up. “We’ve been studying this for a long time. And we’ve seen a lot of sellers get caught up in the details of the contract — they didn’t realize how significant fees could be.”
Specialized software
Gary Greene is leasing the software behind the optimizer from zavvie, a company that provides similar services to other brokerages, including Berkshire Hathaway.
The software provides estimates on offers and costs for Opendoor, Zillow Offers and Offerpad. It is still gathering data on Redfin’s iBuying program, which it plans to include as well. If a client decides to sell to an iBuyer, the agent will be paid a full listing fee, which typically range from 2.5 percent to 3 percent.
Meanwhile, Gary Greene’s parent company, real estate giant Realogy, has entered a partnership with Home Partners of America, which is piloting in Dallas and slated to roll out in Houston within the next month. Home Partners of America, a home rental company known for giving renters the option to buy, will make an offer on a home after it is listed; the agent will make the same commission he or she would make if the home sold to another buyer.
Another national brand, Austin-based Keller Williams, rolled out a similar initiative on Oct. 7. Through a partnership with Offerpad, Keller Williams agents will present Houston clients looking to sell their homes with two numbers: an estimate of how much their home will go for on the market based on sales of similar houses in the neighborhood, and one telling them how much Offerpad will pay for the home.
If a client chooses to sell to Offerpad, Keller Williams’ clients will pay their agent a commission, often around 1 percent of the sales price, in addition to Offerpad’s fee, which is typically around 7 percent. Offerpad also pays Keller Williams; the broker gets a 1 percent fee upon closing, which goes to the agent. Then, when Offerpad sells the home, a Keller Williams agent will list the property, resulting in a separate commission.
Stefan Peterson, co-founder of the company that created Gary Greene’s Offer Optimizer, was so sure of the need for brokerages to participate in iBuyer transactions that he pivoted his company last year to focus on the service.
“When iBuyers came to the forefront, we saw that sellers working with iBuyers still needed representation,” he said. “Very few people know enough to make an informed decision.”
Still, some homeowners are skeptical about the need for an agent. Matt Sprague, who helped his mother sell her home to Opendoor last year, was readying on Monday to sell another. He did not intend to use an agent to determine which iBuyer would make him the best offer.
“I think people can just do their own research and save the money,” he said. “I mean, why would you pay if it would be cheaper to do it yourself ?”