Combining Virtual Offers with Buyer Rebates
Broker offers a new model to appeal to tech-savvy and cost-conscious consumers.
(Boonton, NJ, November 15, 2013) — In a business model that harkens back to the rebate offerings of a decade ago, Minneapolis broker Empower Realty is offering thousands of dollars to buyers who purchase its listings.
Chief Executive Jim Lesinski says his approach is to cut costs from a process that he says is simply too expensive for consumers.
The market is rather inefficient, Lesinski says. I know that might not be a popular thing to say, but brokers dont make a ton of money on the transaction, agents don’t make a ton of money on the transaction — yet we have high costs.
A seller who lists with Empower Realty pays a commission of 4.75 percent to 5.25 percent.
Thats about what Realogy reports as the national average collected by its agents, but Lesinski said the typical commission in Minneapolis is 6 percent to 7 percent. Empower Realty bases its commission on how aggressive the seller is about pricing.
To keep costs down, Empowers electronic offerings include paperless negotiation, automated real time progress updates, and an electronic deal room to coordinate activities through closing.
We only have to get involved when people are pretty far along in the process, and thats where the efficiency comes from, he says.
Details and pricing examples for Empower Realtys approach appear in the November issue of Real Estate Brokers Insider.
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