Help-U-Sell, a big franchiser of a discount brokerage model, has filed for bankruptcy protection. Inman reports on it here.
It really doesn’t surprise me that a discounter is having troubles at this time…in a tougher market for sellers, which we’re experiencing here in Seattle for the first time in nearly 15 years, a seller wants to be sure they’re doing all they can to move their homes. Help-U is a specific, very low priced option. I wouldn’t put Redfin, for example, or Sutton Real Estate, which offers a similar lower priced option to its sellers, in that same basket. I think they provide a service that’s somewhere between nothing and “full,” and their pricing is in that range as well.
A counter argument for a discounter’s success might be that in tough times, with declining prices, a seller needs to preserve as much equity as possible. I don’t buy that. I think the demise of Help-U-Sell, and I’m sure soon-to-be other similar models, shows that most sellers recognize or at lease perceive that they’re getting what they pay for when they enlist an experienced, conventional (for lack of a better word) broker. That way, even if the house doesn’t sell, they won’t feel like they didn’t do everything they could to fully market their property.
Like it or not, the current brokerage system works pretty well to sell property for its market value, with relative transparency to all parties.
Wow, your short article is filled with misconceptions and errors. Help-U-Sell offers more services then most “traditional” offices. The idea that another company does more in the line of service, knowledge or marketing is laughable. And the idea that seller’s would need to lower the price of their home is crazy. I have in the last 6 months told at least 2 sellers that I would not take the listing unless they raised the price from the previous Realtor’s listing. (Just so you know one home sold in 16 days for $965K instead of sitting on the market for 34 months at $925K, the other sold for $682 in 36 days for $55K more than two traditional agents said it would sell for.) Obviously not all sales go this route but many do, because of the marketing.
As for the charges to the seller. I do not go nearly as low as Sutton or Redfin. Do not know how they do it. I push for a 6% commission when possible. That means that the SOC is 4%. In this market sometimes it is hard to get the seller to go there. And I refuse any listings that the SOC is not at least 2.5%. Just this week I lost a listing to a JLS agent because of a lower commission then me. I presume that John L Scott will be your next target.
What is not understood is what is feared.
Comment by Ted Barrans — August 19, 2008 @ 7:17 am
Ted, thanks for this comment. My experience is limited with your francise as we’ve not done a deal with Help-U-Sell (there are no Seattle offices, although the website lists offices in Everett and Bellevue), but the link to the Inman article where I referenced the problems for your francisor seems to be factual.
When I went to the national site, this is what it says:
“Mistakenly, many consumers believe that Help-U-Sell is a For Sale By Owner company, or, that we provide consumers with a menu of services to choose from. However, none of this is true. Just like traditional real estate companies, we offer full real estate services, but we give you something more: The freedom to choose if, and how much, you want to participate in the sale of your home. Thanks to our set fee model, whether you do some of the work or we do it all, you still keep more of the equity in your home. Our choices are simple, although they do vary by office. In general, you can save the most amount of money by showing your home yourself and conducting open houses.”
I also went to your website and it look very professional, and I’ll take you right at your word that you’re doing all (more?) for your clients that any “conventional” broker can do. But the “Help-U-Sell” name and even messaging on that national site sure led me to believe that it was more of a Assist-2-Sell or Redfin listing model.
I’m not targeting anyone, by the way, nor am I fearful of any innovative approaches to real estate. We’ve also long structured our commissions based on the work involved in a deal, not just on a set percentage. I think it only makes sense.
Congratulations on your sales and good luck with your continued success.
Comment by seattlebroker — August 19, 2008 @ 9:49 am