Greg Watkins thinks real estate agents today don’t do enough for consumers and that the traditional brokerage model needs to be disrupted.
Watkins is the founder of NetStarHomes, a Contra Costa County-based, three-agent brokerage that is working for sub-3 percent commissions.
Specifically, the brokerage sells homes priced below $1 million for three percent commission. The brokerage charges a 2.5 percent commission for homes listed above $1 million.
Avoidance of MLS, unnecessary services
NetStarHomes is able to charge lower commissions because it doesn’t use the MLS when listing homes and only provides specific brokerage services that are chosen by the consumer.
“Ninety-eight percent of buyers and sellers go to Trulia, Zillow and Realtor.com,” Watkins said, adding these are the only sites where NetStar lists homes.
“They’re the de-facto MLS of the nation,” he continued, explaining that by not listing homes via an MLS his brokerage is able to charge commissions that are half of traditional fees.
The brokerage also allows consumers to pick and choose what specific services they need during a transaction.
Once those pre-listing, listing and contract, and escrow services are selected a consumer is given a “define service agreement” from the brokerage, which “details what I’m going to do for you and what I won’t.”
As consumers become more fully-engaged in the home buying/selling process, Watkins is banking that more individuals will seek out more cost effective brokerage models.
“Today’s buyers and sellers require fewer brokerage services from agents,” Watkins said, adding a number of consumers take an almost self-service approach to buying and selling.
Buyers can find a place to live and go to open houses all without agents, he said, pointing out that nine of ten interested buyers at his open houses are typically without an agent. Additionally sellers can price their home, comp it, inspect it and list it for free all without an agent.
When this is the case he questions, “how much costs do agents really have?”
