Updated 9/13: Quill Realty is now Added Equity Real Estate – but everything else is as true today as when I wrote it! 🙂
I am loving life at the forefront of change in the real estate industry. My firm Quill Realty left the Northwest Multiple Listing Service on July 1. Since then, we’ve picked up some listings and sold a few houses – our first non-MLS sale closed Friday. Congratulations to this beautiful family!!! 
So we’re selling houses at a dramatically reduced cost to our seller clients. In other words, the model appears to be working. Exciting times!
But it begs the question: Is Quill the only non-MLS broker in Seattle? Or are there others, such that a synergy might begin to build. To date, I have yet to find one. I even have a friendly wager with a title representative. He knows lots and lots of people in the local industry, and so far he’s struck out.
Is that right? Is Quill the only voice calling for change in the MLS-bound wilderness? If you know of any others – in Seattle, or Western WA, or even the USA – I’d love to hear about them. Please leave a comment, and thanks much.
Craig I had a few questions which I asked in a post from last July and never had them addressed would you please take a minute or two to address them. I want to understand more about your business model. Here is a copy of my post. Thank you Craig.
“Craig I appreciate coloring outside of the lines. In the 40 years of both active and full time selling homes I’ve seen many different business models come and go. There was John P. Nagle with their flat fee and florescent orange signs. Microsoft tried their hand with model similar to yours called Home Gain. Some business models take hold and some don’t. Perhaps yours will endure and maybe it won’t. I wish you the best of luck.
I find it interesting reading the blog article and posts and it brings up several questions. First time home buyers many times can barely scrape up enough cash for a down payment and closing costs. Maybe your model targets move up buyers instead of first time buyers?
Since this new model is all about paying the buyer’s broker in thinking it through a several questions come to mind. In ellipitco’s post “Why has it been the case in the USA that the home buyer does not pay his agent directly? I suppose you can say he does pay if the seller adds the commission into the selling price.” Ardell wrote about “stacking” as in putting the buyer’s fee onto the sale price “When you “stack” a cost it is not the seller paying it.” In other words, if I understand correctly, the buyers are financing their buyer’s broker fee over the life of the loan because it is included in the sale price. If that is correct then isn’t that how it currently works? I’ve had this discussion many times over the years about who actually pays the real estate fee: the seller from the proceeds of sale or the buyer who includes the fee sale price of the property?
Regarding using the strategy of offering the seller less than asking because the buyer’s broker’s fee is not included, if the buyers deducts the fee from the asking price then the buyer must come up with the cash up front to pay the fee? If that is correct then how is this different from the current system? In addition, does that mean that a pro-active broker representing a buyer must search multiple search engines and sites to find these non-MLS listings? If that is the case that would mean less exposure for the seller?
Btw, I don’t work with a traditional office structure and embrace new ideas as long as they make sense and are an improvement over what is already in place and proven to work.
Once again Craig I sincerely wish you the best of luck!”
Jim, I apologize for my delayed reply! Thanks for being persistent. Your questions from above, clarified and answered by me below.
Q.: Maybe your model targets move up buyers instead of first time buyers [given the cost of hiring a broker directly]?
A.: Quill target all buyers. Even first time home buyers often have 20% down. If that’s the case, they can afford to hire a professional to assist them in such a significant purchase. If the buyers are FHA or equivalent buyers, with a meager 3.5% down and some governmental assistance on top, then those buyers may need to ask the seller to pay their buyer’s agent’s commission. The seller can then decide how to address that request in the negotiations over price.
Q.: Buyers are financing their buyer’s broker fee over the life of the loan because it is included in the sale price. If that is correct then isn’t that how it currently works?
A.: That is one way of looking at it. Would a licensed appraiser agree, though, that you can determine the FMV for a particular property with such certainty that you are able to segregate out the value from the additional fee paid? No way. In other words, your framing of the issue has value as an analytical tool. But in the real world, the 6% broker commission that is a typical transaction cost cannot be pulled out from the “true value” of the home. It’s all in the stew pot, and all part of the meal.
Q.: Who actually pays the real estate fee: the seller from the proceeds of sale or the buyer who includes the fee sale price of the property?
A.: Again, you can’t pull them apart. “Fair market value” is itself an artificial construct. The “value” of a property is known when it sells, and not a moment sooner. And sometimes it sells for more than “value” which, from an analytical perspective, is impossible. “Value” is determined by what is agreed between a willing seller and a willing buyer, neither being under any compulsion to buy or sell. So who pays the fee? The seller, out of the proceeds of the sale. It cannot be traced any further. Except from a purely academic, analytical, or rhetorical perspective.
Q.: If the buyer deducts the fee from the asking price then the buyer must come up with the cash up front to pay the fee, [right]? [So] then how is this different from the current system?
A.: I don’t understand the question. But maybe this answers it: The buyer of a Quill property can of course hire their own professional to assist in the transaction, whether another broker or an attorney. After all, if the buyer has found the house, the buyer needs legal services, which can be provided by an attorney as well as – or hopefully better than – what a broker would provide. The buyer can then in turn ask the seller to pay the fee charged – everything is negotiable in real estate! How does this differ from the current system? The seller did not offer up front a fee to the buyer’s agent. The buyer must ask for it. I hope that clarifies things.
Q.: Does that mean that [in the Quill model] a pro-active broker representing a buyer must search multiple search engines and sites to find these non-MLS listings? If that is the case that would mean less exposure for the seller?
A.: Well, first and foremost the days of an “active broker” are fading fast. More than half of all buyers today find the home they want to purchase searching themselves on the internet, and surely that number will continue to increase over time. However, your point is valid. For buyers who want a “designated shopper” of a broker, those buyers probably will not see the Quill listing because the broker will be searching MLS data, where the listing will not appear.
So yes, I fully admit that Quill does not provide its listings with the same exposure as an NWMLS listing. But I firmly believe that Quill’s exposure is sufficient that it will lead to a sale for fair market value. The “marketplace” for real estate is a broad and amorphous thing. A house can sell for fair value with simply a “for sale” sign out front, and obviously the market exposure there is WAY less than what Quill provides. Particularly in this market of limited inventory, the Quill model will work just fine.
And here is the heart of my point: Yes, you get broader exposure via the MLS. But you pay for it. Specifically, sellers routinely and most commonly – 85% of the time, or so – pay 3% of the sale price (and pretty much pay a slightly reduced 2.5% the rest of the time). That’s $15k on an average priced home. Does that “pencil out” in the seller’s favor? If you can answer that one, Jim, then you also need to tell me next year’s Super Bowl winner, ‘cuz you must have a crystal ball, or something…. 😉
Thanks again Jim!!
I appreciate your thought out reply. Thank you. I hope you have success. However, it does remind me of the previous models mentioned in my first post which have come and gone. The roles of the listing broker and selling broker have changed drastically since I started back in 1975. It will always be changing. There are always those entrepreneurs, the thinkers, who come up with new ideas. Some new business models work and are integrated into the real estate business.
Some of your points make sense, some get lost in the schematics. To answer your question in the final paragraph. A home which is properly and professionally prepared for the market and placed in the MLS is exposed to many more potential buyers. In this current market multiple offers are common in the city. These multiple offers more than make up the difference you have cited. I don’t have a crystal ball. The experience of almost 500 transactions over the last 40 years gives a unique perspective. As far as predicting the Super Bowl……Go Hawks!
You remind me of a famous quote by Robert Kennedy, “There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?” I do hope you have success in your niche market, Craig.
Yup, you and I will never agree. But consumers, and the marketplace for broker services, are just learning about Quill and it’s unique non-MLS offering. Let’s see how they respond to a true MLS alternative that saves them 67% of the broker fee. Needless to say, I don’t think it’s going to end up being a “niche market”….
And thank you for those kind words. A comparison to RFK is indeed high praise. And thank you for the well wishes!! They mean a lot, it’s not hard to find real estate professionals far less supportive of Quill. Thank you.
Hello Craig, I am wondering what you charge per hour or transaction for your real estate services.
Thanks!
Debbie, I charge a simple 2% to sell your home. Please feel free to call me to chat further! 206.512.8883 Thanks much.
Oh my god.. Is it Really just 2% ? Craig.. Really Craig. Lol
Yup, 2%!!! 🙂