The last few weeks have been extremely busy open house wise for us in Seattle – mostly in the $400,000 and under price range or close to it. Agent hits on the NWMLS for those listings has also soared and the web traffic in general has increased for this price point. The buyers are definitely out there poking around!
Many of my recent open house visitors have been Redfin buyers. They seem to expect to be treated poorly by other agents at opens. Maybe this is just my own perception, but they are physically cringing upon entrance. I guess it could be my outfit or my hair, but more likely it must have to do with the typical reception a Redfin buyer might get. The point of an open house has always been for the hosting agent to meet, network, and possibly pick up new clients. Although it is also great exposure for the listed property, very rarely does the open house sell the home – at least it didn’t used to.
Enter Redfin.
Redfin arguably has one of the nicest real estate search websites and their open house feature is probably second to none. I can’t keep up with their changing business model and have no idea how effective or not they are for their clients, but do love their site and always welcome Redfin buyers to my open houses. Redfin buyers seem to almost always be actively looking for a home. They meticulously schedule and map out the open houses they plan to visit and they come with questions prepared. In short, they are serious.
One little problem:
Open houses that show up on the site are swept from the NWMLS when a listing agent enters the information in the “public open houses” field of their listing and not all listing agents do this. Some companies prefer to hold on to that information and only enter their open houses on their corporate site alone. Soon enough, though, most agents will hopefully catch up and realize that not entering their opens for all to see is a disservice to the seller. Just looking at Seattle stats alone in the NWMLS, Redfin has sold 62 residential properties and 9 condos since the beginning of the year. Redfin buyers are clearly putting a dent in the inventory.
Redfin aside, it is just smart business and good representation to enter your open house into the NWMLS so that you expose your seller’s property to as many potential buyers as possible.
Our company (Coldwell Banker Bain) opened up the NWMLS feature for agents to post public open houses just a couple of weeks ago. It may take a little while for some agents to get used to this and realize the value. But you should start to see a lot more of them.
This is a complete win-win for both the agents and consumers, who have been begging for a centralized source of open house information besides the Seattle Times for years.
HI Jim – I agree! I thought it was one of the best features I had seen in the MLS for years. I know for my brokerage I always insist that the opens are on the public NWMLS feed. The days of guarding that info are long gone and anyone who doesn’t jump on board is really missing the boat..
I was completely unaware of the fact that most “open houses” were open only to other agents of the listing broker (or, more accurately, corporation). I assumed that when an agent held an “open house,” it was open to everyone, i.e. ALL potential buyers. Is it just me, or does anyone else find it apalling that agents would hold an “open house” only for other affiliated agents? And how many sellers were aware of this fact??
Its nice to see the RE broker/agent model move ever-so-slowly towards a “modern” model based on agents as representatives of their clients, not a model based on agents as salespeople. What is amazing is how successful agents/brokers have been at having it both ways during the long transition (and a long transition is understandable — its truly a cultural shift in a business that has been around for a long time). This latest development is the perfect example. I’d wager the vast majority of sellers assumed that their agent’s “open house” was designed to find a buyer, not simply facilitate an “in house” transaction that benefits the corporate broker.
Craig,
Publishing Open House info vs. IDX approved property data display format, is still considered an “advertising” function. Consequently choosing where to advertise that there will be an Open House, is still in Broker control.
The issue of more importance is the commission adjustment that says “agent must be present at initial and all buyer viewings”. In many cases the commission offered is reduced by as much as 2/3rds if the buyer is not accompanied by “their agent” each and every time they visit the property. I know of no company that has that as a strict policy, but many agents input this info in a place where only agents, and not buyers, can see it. This potentially removes the buyer’s ability to see a property at an Open House or other means, and negotiate the full commission offered by the seller with their buyer’s agent, as the buyer’s agent fee is reduced by 2/3rds if the agent wasn’t with them when they saw the house.
A new rule coming out on July 15 will prevent the agent from adjusting that policy in an offer to purchase. Member agents will be prohibited from counter-acting the reduction via the offer, as it will become an mls violation to do so on July 15th.
These issues are connected in that if a broker “advertises” their Open House on another Broker’s site, and then refuses to pay the agent the full fee when that other broker’s client’s accepts the invite to come to the Open House and wants to buy it as a result…well, I think you can see the connection. A bit complex for a blog comment.
In my opinion, those ridiculous commission restrictions should have no spine to hold up, and like you except in new construction with registration policies, I haven’t seen them highly enforced.
Buyers Agency Agreements that state a particular commission agreement between a buyer and their agent should be taken into account somehow for this. After All, the buyer is making the offer and if they want their agent paid what they agreed to pay them then the MLS shouldn’t step in to say they can’t ask for it.
That being said, you can get around this by asking the seller to pay a set amount of closing costs. The buyer can then have the agent’s fee in the the closing costs from their side at escrow… unless it is a VA loan of course:)
You have other ideas on that ARDELL?
Courtney,
The method you suggest has long been the approved method via the Realtor Code of Ethics, but only for agents who are also Realtor Members. The problem with that is the offer looks “odd” if there are multiple offers, and your client can lose the property as a result. The only way to possibly do it that way is to get listing agent approval to personally present your offer with a net proceeds sheet directly to the seller.
When I was a Broker of a Company whose agents were all required to put that goofy commission clause by the previous Broker, I demanded they all be removed. When some objected, I responded “Show me how you verify for EVERY offer you may receive, when the buyer saw the property and with whom they saw it.” Technically you can have that goofy clause, but when you enforce it ONLY on alternative business models, and keep no records of all offers from anyone, you obviously reveal your intent to boycott a business model. Since no agent wanted to keep such records…nor could they since the buyer’s name is not noted in the lockbox entry system, they had no choice but to offer the same fee to all cooperating agents and brokers.
The same issue of potential boycott exists for “needing written permission to advertise another broker’s listing”. This gives the “good old boy” network a leg up on new and alternative business models. It should be yes or no…not “with permission” as we know who will give who permission…and who will never get permission. These subjective rules that support boycotting individual offices, need to go away…for good.
But what about taking it completely out of the seller’s hands and making it part of the buyer’s closing costs? It would not be part of the Seller’s side of the HUD at all. It is very common for buyers to ask for closing costs anyway and seller’s never seem to ask for a break down at offer time. I know they will get it later on the HUD, but they shouldn’t care in most cases as long as the SOC on their expense side is whatever commission they offered in the listing. Just trying to think outside of the box. Like I said before, though – I know it wouldn’t work for VA – not sure about FHA though. To me, it would be the same as if you sold your clients a FSBO not offering buyer agent payment at all and they still agreed to pay you at close per the terms of your buyer’s agency agreement.
Craig,
Broker opens are not exclusive to agents of your own brokerage. However, because its easiest to announce your broker open to people in your own office (via needs and wants meetings), that’s who usually shows up.
This thread appears to be talking about both broker opens and public open houses.
Tom,
Easy to put your Broker Open in the mls same as Public Opens. My experience is that they are not attended by “own office” as much as agents from other offices, as “own office” usually does a separate “office tour”.
The Broker Open will not carry in the Open House feed to the public, but easy to pull up this week’s Broker’s Opens from the mls. Each area has a fairly consistent day and time, so easy for the public to “go” as well.
Tom — oh, right, of course, the Broker Open vs. the Public Open. Its a distinction that every seller recognizes. When the listing agent says “I’ll stage an open house!” the seller knows to ask, “Broker, or open? I want open because I want maximum exposure!”
In reality, I suspect most if not virtually all sellers do NOT appreciate this distinction. Rather, most sellers think an “open house” is advertised to ALL potential buyers, i.e. the public. This “broker vs. open” distinction is just one more example of the “old” model of RE agents as salespeople — a model that, while fading, certainly has some legs left.
Craig,
Never had a seller not understand the difference between a Broker Open (usually on a weekday) and a Public Open (usually on a weekend).
Hey Craig – Most sellers do understand this concept believe it or not. I prefer to just make the brokers opens regular opens. Might as well get more foot traffic while I am there anyway.
Hi Craig – They hold them open to everyone, but many still refuse to advertise the open houses on the MLS which then is swept to other websites. I have heard it said that they don’t like their competition to have that information and would rather have the consumer visit their site to see what houses are open. For instance, if you go to my corporate website, you can see open houses advertised for all listings where the listing agent from whatever company has inputted their open house into the MLS in the public open house field.
Sellers should seriously look at whether or not their open houses are being input into this field in the MLS (vs only in the agent’s corporate input site) because it greatly increases traffic at the house on that day. Isn’t that what the point should be? More exposure, sell the house, etc., rather than trying to freeze out the competition by not letting them have access to that information…
Courtney said: “…if you go to my corporate website, you can see open houses advertised for all listings where the listing agent from whatever company has inputted their open house into the MLS in the public open house field.”
Courtney, that is not the case. The listing agent input does not release the open house info to your site, if their broker has blocked the release of that data. Open house feed is not contained in the normal IDX feed, so while the general IDX data will show on your site, the open house will not.
Because it is a separate feed, the timeliness of data transfer is not the same either. Your site may have an hourly or a 15 minute data sweep for price changes and status changes, but that general sweep does not pick up the Open House data. So agents should put their Sunday opens in the mls before Friday, when and if possible.
Suffice it to see that until about 10 days ago, the 3 top brokers with the most listings and the most Open Houses, blocked the Open House info for getting to your (or any other )site. The agent had no control over getting it there. As Jim menitoned, Coldwell Banker Bain changed that policy for the better, but to the best of my knowledge, the other two have not.
OK, see that makes more sense, but was not what the MLS told me when I asked. I know I am sweeping open houses from the NWMLS, but have no idea what that sweeping interval is.
Where is your pretty face on this comment? All I see is a little angry bug icon:)
I’m using Firefox on a different computer than usual. It’s taking the site a few moments to recognize me 🙂 It put my comment into the spam filter initially.
The block is up at the broker level and can’t be seen necessarily by the average mls employee you may be speaking with. I think the block is initiated by the logon of the individual agents working with the blocking broker. Those that block the field from your site will also not show your Open House on their site. The two pretty much go hand in hand. So look for your Open House on other sites, and you will have your answer when yours does not appear on theirs.
I wrote a post on this last year when many agents were trying to organize an Open House Tour in Bryant. Many agents responded that the field was blocked by their broker, so we couldn’t print out a tour sheet from the mls for an interoffice coordinated Sunday Tour.
awwe there she is:) I know mine are on the Redfin site – LOL I can’t find where I opt in or out (AKA block them or not) on my office broker menu, though….
I missed your post last year – sorry. I think with all the changes happening it is definitely worth a revisit. How was your Capitol Hill open?
Sorry Dustin, still learning – I see I should have hit reply under Craig:) LOL I love that – it will make it easier to follow the comment stream!
JLS will be releasing the public open house field shortly as well…possibly next month.
“How was your Capitol Hill open?”
There is no reply button on that question where it appears, so answering it down here. I had 3 Open Houses in an 8 day period. Sunday, Thursday, Sunday. The first was the most attended, even though the Open House did not appear on other Broker sites the first Sunday and did on the second one. Consequently it would appear that buyers were able to find the Open House equally as well, with or without the “advertisement”.
Seems most buyers will come from the signs, and most buyers will go to their area of interest and follow the signs.
I know, but I love looking at those little maps and printouts the really prepared buyers bring:) Glad you had good traffic. I need to see it (and you!).
“It is very common for buyers to ask for closing costs anyway”
Courtney,
Again, have to answer you down here as we are smacking into the 4 reply limit again.
Remember, the alternative business model’s client would be the ONLY one with the disadvantage, if all other agents with offers didn’t have to ask the seller’s “permission” for the identical fee arrangement. Under the new rule which will apply on July 15, they will not be able to explain that to the buyer and seller as part of the purchase and sale agreement.
The only way to proceed would be to write the offer without regard to the commission limitation, as that is the ONLY way to best represent a buyer client’s best interests. They would then submit the Commission Disbursement Form to escrow for the full amount, and only have a dispute if the payment was reduced by the limitation clause via the listing broker’s instructions to escrow.
My guess is those putting these awful clauses in the mls won’t have the chutzpah to enforce it during escrow.
If the Open House shows on the buyer agent’s site due to actions by the listing company, their defense to the dispute would be negated by an articulate and intelligent person’s appeal. That is one of the reasons for the Open House block by some member brokers. I don’t think they can unblock the data AND keep the goofy commission reduction clause. They kind of go together.
If no other buyer has to adjust their offer for commission issues, only the boycotted firm(s), that is not appropriate. Pure and simple.
We just talk too much:)
I understand what you are referring to in regards to trying to cut out those alternative business models, but what about when you see really ridiculous substandard commissions being offerred in the SOC and your buyers have agreed to pay you more via the buyers agency agreement. I show everything as it is no matter what the commission being offered on it is – this is because I know what my pay will be based on what the buyer and I have agreed to in a buyers agency agreement. It is one of the up front discussions we have. The buyer will make up the difference to me at close when the seller only pays me part of that agreed upon fee. This hasn’t happened yet and I probably would just write off the difference in most cases, but I have seen some really screwball things on the multiple lately so I could see where it might happen down the road or at least has the potential to.
Look at the pdf regarding new rules effective July 15, 2009 which you can access via the notice on the Discover site.
Technically the buyer has to pay you the difference outside of closing. As a member of the mls, you agree to accept the amount offered, without trying to modify the offering via the purchase and sale agreement. There is reference to methods using other means. I didn’t pay much attention to it as my fees have never been in excess of the amount offered.
The method you describe would be using the Purchase and Sale agreement, so read the new rule before it becomes effective on July 15.
There is one really good new rule about condo photos not having to be an exterior photo as the main! There are about a dozen changes coming on July 15.
Great post Courtney!
I tried to follow what you and Ardell were chatting about but got a little lost. Bottom line is that I think whatever we can do to make it easy for as many buyers to see a house as possible and make an offer would be the best thing to do in this market. Putting encumberances and commission reductions on a listing doesn’t benefit the seller.
Also though you might be interested in this Active rain post of mine about how Seattle listings on Redfin with open house times get 2.5x more views than listings without!
Best would be if ALL sites showed ALL Open Houses as part of the normal IDX feed…I think that day is coming.
Hey Matt – I did just go in and checkout your post on Active Rain – sorry I had missed that. Like ARDELL, I think all the info should be on all the sites. Hopefully other brokerages will wise up to what the consumer wants.
RE: ” Like ARDELL, I think all the info should be on all the sites. Hopefully other brokerages will wise up to what the consumer wants.”
I agree, Courtney. I think the brokerages are waking up and seeing that even though the door is closed, the horses have already left the barn.
Great post Courtney!
I tried to follow what you and Ardell were chatting about but got a little lost. Bottom line is that I think whatever we can do to make it easy for as many buyers to see a house as possible and make an offer would be the best thing to do in this market. Putting encumberances and commission reductions on a listing doesn’t benefit the seller.
Also though you might be interested in this Active rain post of mine about how Seattle listings on Redfin with open house times get 2.5x more views than listings without!
Ardell & Courtney,
I think you are missing the best solution. It is great if ALL sites are required to show ALL open houses if they display this part of the IDX feed. But why not have the MLS REQUIRE that all open houses be entered in the database as well? They require us to enter # of bedrooms, price, etc. If they require open houses, then we would truly have a comprehensive open house list.
Kudos to Matt & team at Redfin for being a pioneer in displaying everyone’s open house data, even if it is still incomplete data today. It is somewhat foolish of the bigger brokerages to allow Redfin to get an upper hand in open house marketing. They will become the de facto open house database, increasing their web traffic at the expense of larger brokers, unless other brokers follow suit quickly.
Hey Kevin – I don’t see how that would practically work. I would say half my opens are spur of the moment when the seller calls me up and says it is okay. In a more perfect world it would be easier to get all those in, but some sunny days I might feel like plopping down a few open house A-boards to see if I can get any traffic. I would hate to be in violation because I did something on the fly. I think the better solution might be not allowing for the blocking of the information.
Kevin be very happy for Red Fin. The bigger they get the bigger you will get. Ride the coat tails but always be a step ahead of the big brother in terms of pricing and customer service.
When the masses begin to realize that this money exists in Washington State, and how to obtain it, the flood gates will open for Findwell, 500, Shop Prop, HandSpring, and the hundreds more that will be arriving.
I look forward to the day that we no longer have to sit in the Seattle Home Show and defend our model as NOT being “illegal” and “there must be a catch.” The masses are being forced to learn quicker now due to the economy on the sensible way to buy and sell.
We are all enjoying the benefits of Red Fin’s venture capital and I could never thank them enough. I’m a fan for life and would wear a Red Fin shirt if someone mailed me one………..hint hint Matt!..or a hat…anything?
Kevin,
Not possible to “require” it, as that would prevent an agent from having an Open House impromptu. Say the seller didn’t want one, and then decided to go out of town and asked to have one. Your method would cause an agent to say “No, sorry Mr. Seller, I can’t have an Open House because I didn’t tell everyone via the mls that we were going to have one”.
Not a good idea…but keep thinking! 🙂
Lake and Company and Gerrard, Beattie and Knapp both had public open houses before any other brokerage.
I have never restricted that feed from others either. I didn’t know I could at the broker level until ARDELL pointed it out. Where do you find that data to show they were actually first?
Marlow,
They were the first to hold public open houses, as in “back in the day”? Or the first to show them on their websites?
Sorry to enter the conversation late. Thanks Marlow for pointing out our websites. Mike Skahen worked hard at the board level to get approval for website display of the NWMLS Public Open House field and LakeRE.com was indeed the first to provide this data to the public on the day it was authorized. This was I think early in 2006? Some brokerages did not participate and so a site I might host for, as an example, a CBBain agent, would not be allowed to display the open house data provided in the IDX feed. I’m pleased to hear that will change!
OK, I’ll bite: Why would an agent hold a “broker” open house in the first place? As I understand the post, a “broker” open house is only advertised to other “corporate” agents (e.g. John L Scott). Why would an agent limit the open house to only SOME agents? Why wouldn’t an open house be “open” to everyone, ALL agents and ALL potential buyers? What is the advantage TO THE SELLER of limiting the scope of the “open” house”? Thank you in advance for any insight you can provide.
Hi Craig – Broker’s opens have been around for a long time – long before me and are a bit traditional – they are held on certain days and times depending on what area your listing is. They are a great way for a local agent to pull up inventory and run around during those hours seeing all of the properties without having to make appointments when occupied. We tend to serve up food and treats at these to try and whoo as many agents as we can to come see our broker open. We want them to remember our listing for a particular buyer or if they get a new one that might fit the bill.
It is also a great way for agents to pick up tons of Starbucks gift cards which are offered frequently at these things. I don’t do a lot of broker’s opens, but when I do, I advertise them publicly and hope to get buyers through as well.
It sounds like a broker’s open is very beneficial to the agent — but I still don’t understand the benefit to the seller. Your follow-up comment is also intersting: What’s the advantage to the SELLER of Windermere’s agents being very familiar with the “office inventory”? The real benefit accrues to Windermere: when a potential buyer calls the brokerage out of the blue (that’s a “floor call,” right?) that buyer can be steered to Windermere listings — regardless of whether the best house for that buyer is actually listed with Windermere or not. Another artifact of the “agent as salesperson” days…
Craig you keep grinding away and you already know the answers to these questions………….
More importantly what do you have up your sleeve? Something that trumps 500 Realty and gives even more value to the consumer?
I wanna hear it! Be prepared for me to criticize it for I have been working on different models for years.
I’m in!!
I am referring to when they are calling the brokerage on a sign from one of the office’s listings for a floor call, Craig. No steering involved in that – they just want the office agents to know what listings the office has so that when they call if the listing agent is not available for some reason another office agent can at least say they have been in the house.
Now where it would pay off for the company: The office tour has the extra added benefit that another office agent on tour might think, “hmmm I have someone for this”, and then sell it in house. But again, why not let the seller have another avenue for exposure.
Why do you think the slant has to be so agent centric? All exposure is good for sellers.
Courtney — I agree that any exposure is good for sellers. However, the greater the degree of exposure, the greater the benefit. My issue is that the agent limits the exposure (by a “broker’s open” or an “office tour”), thus reducing the benefit to the seller/client. At the same time, this limited exposure benefits the agent (or the broker, or the corporation) by increasing the odds of an in-house sale.
You’re looking at this issue as a “salesperson” and not as a “representative” (similar to, but thanks to RCW 18.86, distinct from a fiduciary). As a salesperson, it makes sense to get some additional personal benefit (“personal” referring to the agent and broker and corporation) at the expense of the seller. It’s easy to think that its OK because the seller is still getting some benefit, so what’s the harm? However, this is entirely inconsistent with truly representing the seller. It is a form of self-dealing that is prohibited in a truly fiduciary relationship (such as attorney/client, for example).
We can argue the point ad nauseum, but in reality agents must either (a) defend the indefensible, i.e. seek to preserve the “old” ways of doing business (salesperson) while at the same time asserting that the agent is a representative, or (b) concede that the old model is inconsistent with the modern role of RE agents (representative and advocate), as Ardell has done (I think — she’ll correct me if I’m wrong ;)).
Hi Craig – Broker’s opens have been around for a long time – long before me and are a bit traditional – they are held on certain days and times depending on what area your listing is. They are a great way for a local agent to pull up inventory and run around during those hours seeing all of the properties without having to make appointments when occupied. We tend to serve up food and treats at these to try and whoo as many agents as we can to come see our broker open. We want them to remember our listing for a particular buyer or if they get a new one that might fit the bill.
It is also a great way for agents to pick up tons of Starbucks gift cards which are offered frequently at these things. I don’t do a lot of broker’s opens, but when I do, I advertise them publicly and hope to get buyers through as well.
OH! And no – you are thinking of the office tours. When I was at Windermere, we toured all of our new office listings every Monday so we knew the inventory in the office in case we got a floor call. Brokers opens are different and they are for all agents and the public as well if they feel like dropping in. We use the same A-boards as we do for public opens so anyone can come in.
My final thought: Redfin has not “sold” anything. Rather, Redfin has represented buyers of 62 residential properties and 9 condos. Again, the notion that the buyer’s agent “sold” the property is an artifact of an era that is drawing to a close (but hopefully not before I am able to launch an alternative model much better suited to the modern world ;))
Good luck with that, Craig:) I like alternative business models. I used the term “sold” because that is the status of the listings in the MLS. They are “sold” and the “selling brokerage” identified in the MLS is indeed Redfin, but I will agree that they also represented them if that would help clarify. It is just a term.
As far as your comment on the broker’s opens being better for the agent vs. the seller, I do agree that the agents visiting them probably do get a lot more out of them immediately, but the sellers benefit because those agents have or might have buyers for their house and any exposure is good exposure. It really isn’t a self centered thing for an agent to host a broker’s open and just one more faucet of exposure if they find that they are useful.