LAS VEGAS — Help-U-Sell offers full-service and limited-service real estate options for consumers at a reduced cost compared to traditional real estate commission rates, though you won’t likely hear company agents, brokers and managers refer to Help-U-Sell as a discounter.
Bill Ouelette, broker-owner of a Help-U-Sell office in Coon Rapids, Minn., said the term “discount” or “discounter” can carry some negative connotations — “It’s like Wal-Mart,” his son Marty chimed in, adding that some discount companies compete only on price while providing few real estate services.
People might think you’re scrimping on service if you use the “discount” terminology, Bill Ouelette said.
Steve Frerichs, an Oregon Realtor who has worked as a Help-U-Sell agent and is now pursuing a franchise office, said of the company: “We’re not a discount brokerage, we’re a value brokerage.”
But the bottom line is that the Help-U-Sell business model cuts traditional commissions, which typically range from 5 percent to 7 percent of a home’s selling price, by offering its services for a flat fee rather than charging a commission based on the home sale price. Sellers who work with the company can choose to do more work for less cost by hosting their own open house events, for example.
Pressure on real estate commissions has been a hot topic for the industry, as new business models and discount practices ranging from rebates to reduced commissions have ruffled the feathers of traditional brokers who say that real estate businesses should focus on quality of service rather than cost-cutting.
Help-U-Sell, which launched in 1976 and has about 1,000 franchise offices nationwide, has been around the industry longer than most discount real estate business models, and its agents and brokers say that the old line is eroding — as are the costs of real estate services.
Ouelette, who this week is attending a Help-U-Sell conference in Las Vegas along with his sons, who are Help-U-Sell agents, said that reduced-fee real estate companies still face some push-back from other industry participants, though the market segment has gained traction with consumers. A 30-year veteran in the industry, Ouelette opened a Help-U-Sell franchise office about three years ago. Some of his old friends in the business didn’t sound too pleased about his new affiliation, he said.
He heard the comment, “If the market gets tough you guys aren’t going to be around.” Also, some agents seem to have misconceptions about what Help-U-Sell is and what it isn’t, and on occasion there have been agents who seem to think Help-U-Sell is a for-sale-by-owner enterprise and attmept to solicit home sellers who are already working with Help-U-Sell. But, he said, “Most … companies see it as a segment of the industry that’s growing. You can’t do away with us.”
Many traditional companies are focused on individual agents, whereas Help-U-Sell is a company-driven model: employees are paid a salary, the company has agents who specialize in working with buyers and agents who specialize in working with sellers. The company’s offices tend to run with fewer agents and staff than traditional brokerage offices.
Alice Andrews, broker-owner at Alice & Associates Real Estate, a Help-U-Sell office in Madera, Calif., said a brokerage company that operates in her market paid for several billboard advertisements that show a man gripping his hair in hands, with a slogan suggesting that discount brokers are not all that they’re made out to be. “They feel very threatened that the cash cow they had is disappearing,” Andrews said.
Adam Basila, who works with Andrews, said he sees brokers in his area offering lower commissions, and he believes cost-cutting practices in the industry will continue, regardless of market conditions. “It will be tougher to get back to 6 percent,” he said, which has been a historical benchmark for industry commissions.
Frerichs said he has seen what agents at other companies do to sell houses, and it’s not worth the money they are charging. “These guys don’t know as much as an attorney and they’re getting more money than (attorneys) do.” Consumers today seem to be more educated about commission rates, he added, “I think they understand that $20,000 to sell their home is too much money. I think they’re just sick of it — they feel it’s just a rip-off.”
Steve Ozonian, Help-U-Sell CEO, echoed those comments in an address to employees during the Las Vegas conference. “The Internet and home prices have really caused people to think about the value they’re getting from traditional business models. The disparity between the relationship of the price a Realtor charges for services and the cost for delivery of services … it’s hard to find anybody who doesn’t say, ‘It’s gotten ridiculous.'”
Ozonian shies away from the “discount” word, too, referring to the company as a leader in providing “set-fee real estate services.”
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