About 70 people looked at Bruce Otte’s Longmont home during the six months he had it listed for $495,000 with a real estate agent last year.
But he never got an offer.
“We were getting frustrated because we were building a new home (in Longmont), and we had to close on it,” said Otte, whose family had lived in the house for 16 years. “We had two mortgages.”
That’s when he fired his agent and turned to Castle Rock-based Help-U-Sell, which provides the support of licensed real estate professionals to people selling their homes. Help-U-Sell, which has 800 franchises nationwide, helped Otte sell the house within 90 days for $482,000.
And because Help-U-Sell charges a flat fee, Otte said, he saved more than $11,000. Typically, a buyer’s and seller’s real estate agents split a 6 percent commission.
Help-U-Sell is among a rapidly growing number of real estate firms breaking the rules of traditional house sales. They win business by challenging commission structures zealously guarded by the real estate industry.
Some of the new kids on the block allow buyers and sellers to pay à la carte for real estate services, such as providing for-sale signs and placing entries on the Multiple Listing Service.
Traditional agents claim companies such Help-U-Sell can’t provide the same level of service.
“All (customers) receive is copies of the contract, and once you receive the offer, they’ll tell you what to do with it,” said Jeff Harmes, an agent with Re/Max Horizons Group.
“The problem is, there’s no one to help guide them through the showing, the paperwork, or show them how to price their home the right way,” he said.
Judy Spear, a traditional real estate agent until she opened her Help-U-Sell franchise in Longmont last year, said the clients she works with are more concerned about how much money ends up in their pocket.
“I began to see a trend with sellers and my own clients,” Spear said. “Loyalty and friendship are going by the by. It’s all about money. My own clients were saying, ‘We know you’re the best in the business.”‘
Otte saw Spear’s advertisement, and after speaking with her, Otte cancelled the contract with his previous agent and listed his home with Spear. She gave him a list of 26 improvements he needed to make.
“We had a contract within 60 days and sold the house within 90 days,” said Otte, who held his own open houses.
There are 29 Help-U-Sell franchises in Colorado, said Keith Dudley, the company’s regional director. Dudley said his Highlands Ranch franchise has represented more than 800 sellers so far this year – nearly as many as it did all of last year.
Some full-service real estate firms are complaining about companies like Help-U-Sell, but there haven’t been complaints from the public, said Debbie Campagnola, director of the Colorado Real Estate Commission.
“Where is the public harm if the public knows what it’s getting?” she asked. “The commission has not found these new business models to violate Colorado law. With no complaints from the public, we’re not feeling the need to impose more regulation.”
KB Home, the Los Angeles-based homebuilder with many developments in Colorado, said that more than half of its homes are sold by real estate agents. The rest are sold directly to homebuyers.
KB uses a standard contract that’s relatively easy to read, said Barry Grant, president of KB Home Colorado. Grant said that while some people may feel the need to work with a professional agent, others are capable of handling the deal themselves.
“If you’re comfortable and knowledgeable and can read the material, it’s fairly straightforward.”
Companies such as Socrates Media in Chicago provide ready-made forms, kits and software to help buyers and sellers handle deals themselves.
“A lot of the costs built into the whole process will take away from your overall investment or return,” said Michael Kahn, senior director of consumer marketing at Socrates. “With the explosion of the Web, there’s more data and information to help educate people on how to do these things themselves.”
Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.
Do-it-yourself services
The real estate industry is using its political clout to fight an array of relatively new services that could help buyers and sellers save big bucks on home sales:
Bidding websites: Buyers and sellers can enter property information and ask brokers to bid for their business. Examples include and .
Discount real estate firms: These brokers are willing to lower their commissions. To find one, enter a city name and the terms “discount,” “real estate broker” or “low commission” into a Web search engine.
Fee-for-service sites: Buy only the services you want, such as assistance completing paperwork or a Multiple Listing Service listing. Two franchises to consult: and .
For-sale-by-owner sites: Sellers working without an agent account for almost 20 percent of the nation’s annual home sales. Sites such as offer do-it-yourself information and allow sellers to pay à la carte fees for sale signs, property listings on the MLS and phone services that accept messages from potential buyers. Users will have to offer commissions to encourage agents to steer buyers their way.
Referral-and-rebate sites: Potential buyers can connect with agents at sites such as . If they buy, the broker pays the site for the referral. In turn, the site gives part of that rebate to the buyer.
MARGARET JACKSON
