Louis Herrera

Did anyone else catch the interesting note towards the end of the call that Zip Realty plans to go the independent contractor route with agents in Long Island? They are going to "test" the concept and see how it works. Louis Herrera CEO/Designated Broker RT Brokerage Services, Inc. www.rtbrokerage.com

At RT Brokerage Services we let consumers choose the model that works best for them. Instead of only paying for real estate services in the form of a percentage based commission, we give consumers the option to pay on an hourly, fee-for-service basis. In offering consumers a choice for how they pay for their representation, it allows us to present the real estate commission for what it is: a risk premium, and shifts the discount burden from the agent to the buyer or seller. The real estate commission has remained a fixed percentage of the sales price because it is a risk premium, not a prescribed methodology for service. The risk in the traditional practice of real estate is that a client may walk away from representation for any reason, at any time, thereby yielding no return on the agent’s investment of time. The correlated premium, in a successful transaction, is the market rate commission charged by the agent to the buyer or seller for a guaranteed result under no-money down terms. In our commission-based (traditional) model, where we assume the commission risk of a buyer or seller closing or not closing a transaction, we charge the market rate real estate commission based on a fixed percentage of the sale price. A client only pays if a transaction closes. In our hourly-based (fee-for-service) model, where the buyer or seller eliminates our commission risk because he or she is sure of closing a transaction, we track our time and charge hourly rates for the services provided. The model is like any professional services profession that operates under a fee-for-service compensation basis (e.g., law, accounting, and engineering): clients only pay for what they use, and never more than 3% for their side of the transaction. Our hourly model differs from most fee-for-service or al la carte brokerages in that it is 1) full-service only; 2) services are invoiced and payable semi-monthly; and 3) recommended only to consumers who are sure they will close a transaction. A consumer-choice model gives each side the ability to bear the risk and reap the associated reward. Louis Herrera CEO/Designated Broker RT Brokerage Services, Inc. www.rtbrokerage.com

We launched RT Brokerage Services with two principles in mind. First, full-service real estate is here to stay. Second, in rethinking the traditional full-service real estate model, any complementary models would need to embrace new consumer-centric practices to attract and accommodate the growing segment of savvy, online real estate consumers. In shifting from a purely agent-centric model of full-service in which the agent was the exclusive facilitator for real estate shopping to a broader consumer-centric model in which the consumer shares in the search for properties, we took a time-accountable approach, very similar to the a la carte model. This led us to our consumer-choice strategy for full-service real estate. We are the first full-service, consumer-choice real estate brokerage in the US. We provide consumers with a choice of two full-service models to close their real estate transactions. The option is an innovative consumer-choice strategy called reConsidered™. In reConsidered™ the consumer decides how their brokerage and agent will be compensated. They can go traditional with a commission-based model, or they can go hourly with a fee-for-service model—whichever works best for them. It’s fair, simple, and straightforward. When you look to the future of real estate, don’t limit yourself to one model. There is no reason for it. Your limiter should be consumer demand, not how the national brokerages operate. Louis Herrera CEO/Designated Broker RT Brokerage Services, Inc. www.rtbrokerage.com