LAS VEGAS — Steve Ozonian has seen the real estate industry from all sides now.
A few months ago he joined Help-U-Sell, a real estate franchise that offers services for a flat fee, as CEO. Before that he headed up Realtor, home builder and corporate relocation operations as national home-ownership executive at Bank of America. He is also a former CEO and president of Realtor.com, the National Association of Realtors-affiliated property listings Web site.
He has also worked for industry powerhouses Prudential Real Estate and Coldwell Banker, served as a senior executive for RE/MAX International, and was a regional president for a division of Chicago Title and Trust.
His career path reads like a genealogy of industry change. RE/MAX was once controversial in the industry for it’s agent-centric commission structure that allowed agents to keep the lion’s share of their commission income, but the company has since become a powerful force in the industry, nationally and internationally.
Realtor.com has had some major setbacks over the years, including an accounting scandal and management shakeup at its parent company, but has since improved its financial standing and is one of the most popular home-search sites for consumers.
Ozonian worked for a major banking company amidst a heated battle by the National Association of Realtors to keep federally chartered financial services companies out of the real estate brokerage business, and that battle is still brewing.
Help-U-Sell is one of the oldest low-cost alternatives to the traditional real estate commission structure, and Ozonian has joined the company at a time when other alternative business models and real estate technologies are catching on with consumers.
“A global view of how the industry works is a good thing,” Ozonian said, adding that he prefers to think of the real estate industry as “the home-ownership industry — it’s all one transaction. That’s how the consumer looks at it.”
In line with this view, Ozonian said Help-U-Sell this year plans to offer bundled real estate services to consumers for a flat fee — everything from brokerage services to title and mortgage services. Consumers, he said, will “know what that transaction will cost in its entirety before it’s completed.”
The Internet, he said, has brought the most significant changes to the industry during the span of his career, and more change is on the way. “The traditional model is now broken. The Internet has empowered consumers.”
Consumers are doing more work on their own now, and they’re questioning why they should pay a traditional commission rate when the Internet is taking some of the work out of agents’ hands. Consumer attitudes, Ozonian said, will drive the revolt against the industry’s age-old commission structure.
In his own personal real estate transactions, Ozonian shared a story of a Realtor whom he had worked with on many transactions. His wife called to get advice from the Realtor and the Realtor said he was too busy to talk that day. Ozonian said he began to think about what the agent did and didn’t do for the commission dollars.
“All he does is write the contract and hand that over to his assistant,” Ozonian said. Lawyers and doctors generally give a detailed accounting of the cost of service for the work they perform, though the costs for real estate services are not as transparent, he said.
“I am not attacking anyone who sees value in paying 5.5 percent or 6 percent” for real estate services, he said, though consumers “shouldn’t be forced to use an existing (commission) model.”
While Help-U-Sell, a company established 30 years ago, has a long-established flat-fee business model and has grown to a franchise network of 1,000 offices, Ozonian said the company is still battling misconceptions in the industry and among consumers. Calling the company a discounter, for example, would be wrong, he said, because the company has a completely different cost model than the standard commission system.
And while Help-U-Sell offers a menu of services for a set fee, that doesn’t make it a limited-service business model, he said — limited service is more commonly used to refer to companies that offer very minimal services in a transaction, such as the placement of a property listing in a multiple listing service for a flat fee.
Home sellers who work with Help-U-Sell can choose whether to host their own open house events, for example, and whether to post their property in an MLS — and the fee would be higher for adding these services.
Commenting on the nation’s network of hundreds of MLSs, Ozonian said the MLS system is “not a well-oiled machine on a national basis” and is likely to become more consumer-friendly. Even so, the MLS system essentially is a good tool, he said, and pulling the plug on the current system would be disastrous for the industry. MLSs have come under scrutiny as the National Association of Realtors faces a federal antitrust lawsuit over its policies for displaying and sharing MLS property information on the Internet.
Help-U-Sell was at the leading edge of a trend among brokerage companies to aggregate property listings from many sources and put the listings on the company’s Web site — the company includes foreclosure and for-sale-by-owner listings along with MLS properties and Help-U-Sell’s own listings.
Help-U-Sell is among the fastest-growing real estate franchises, and the company plans to add operations in six more states, giving it offices in every state by the end of the year. Ozonian said the company is more focused on growing its market share than on growing the number of offices and agents in its network.
As the market transitions out of a strong seller’s market, the company’s strength in working with home sellers should be advantageous, he said. Help-U-Sell also works with buyers, and some offices employ agents who exclusively work with sellers and other agents who exclusively work with buyers.
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