Realtor Brandon Alfriend has a bold proposition. Through his discount listing service Common Cents, the rookie realtor charges as flat fee of $2,500 versus the industry standard 3 percent, which he says equates to about $6,400 for the average Central Ohio home.
So why potentially leave money on the table?
“I really think this is the direction that real estate is going,” Alfriend says.
While real estate commissions have remained stagnant since World War II, pretty much everything else about the industry has changed with the advent of the internet. Email, electronic signatures, sites like Zillow – technology has turned once labor-intensive tasks to instant communications.
There’s also what Alfriend dubs the Relator Paradox. Between 1960 and now there are roughly 10 times more realtors per capita. Putting that into perspective, Alfriend says 50 years ago, roughly one in 3,000 Central Ohioans was a realtor. Today that number is closer to one in 300.
Hello, competition. Alfriend sees the flat fee as a way to stand out from the crowd, opting to drop the prices and just focus on the process.
He may be a new agent, but Alfriend gained familiarity with the industry with a dad and grandma both in the biz. After working in operations and logistics, he made the transition to real estate in 2014 working for a group of agents in Dublin as a transaction coordinator and operations manager. His job was to streamline the process from new listing to closing and keep it rolling on an efficient timeline.
“I saw a lot of what works and what doesn’t work,” Alfriend says.
Common Cents combines the what’s working with the price point of a discount listing service, creating a model unlike most lower-fee services.
There are typically two kinds of discount firms. First, there are the internet-based agents licensed in several states that will put a listing on the MLS for a nominal fee. Then there are the flat-fee and lower percentage crowd that offer some sort of full listing process, “But they don’t do everything that a typical realtor does,” Alfriend says.
Through Common Cents he aims to provide a robust list of services at a discount price. The distinction manifests in three main areas. First, Common Cents provides professional photography – one of the things Alfriend has seen to make a big different on listings. He’ll also handle a price analysis and recommendation and wade through contract negations. Finally, a mobile application allows folks to schedule showings directly online, and homeowners to manage things like blackout dates and feedback from showings.
The service just launched in December 2017, but Alfriend has seen some early interest from the $200,000 – $300,000 crowd – Millennials and families with younger kids that are ready to move up. He expects to appeal to a primarily younger audience with a technology-driven solution.
Alfriend thinks the active market in Columbus is good news for a discount service like Common Cents. When houses in many Central Ohio neighborhoods sell practically as soon as the sign is in the yard, many homeowners may be wondering why they are paying a premium commission for something they could have done themselves.
“Certainly in a sellers’ market, people are more receptive to it,” Alfriend says.
Unsurprisingly, homeowners have been excited about the concept. At the end of the day, people want to sell their homes for the most money possible as quickly as possible. But Alfriend says he’s also spoken to lenders that see a future in the flat-fee model.
For more information, visit commoncents614.com.