Are Consumers Ready For Fee-for-service Real Estate Tranactions?

May 5, 2008 - PRLog -- That is exactly the bet that RT Brokerage Services CEO Louis Herrera is making.  “Using a real agent to buy or sell a house should be like any professional services relationship where you only pay for what you use,” says Herrera.  “And our time-accountable, fee-for-service model gives consumers exactly that opportunity.”  By billing for services throughout the transaction RT Brokerage Services ensures an agent’s time has real and payable value.  “Everyone wins in our model,” Herrera says.  

RT Brokerage offers consumers full-service real estate representation like any traditional full-service brokerage.  However, the difference in RT Brokerage’s model is their agents do not work on commission.  Instead they get paid as service is delivered.  By eliminating the agent’s commission risk in a transaction, RT Brokerage’s pay-as-you-go model allows them to reduce a consumer’s overall transaction costs.  “If consumers are ever going to see lower commission fees from the new informational advantage afforded by today’s web-based real estate tools and services, agent representation will have to move to a fee-for-service model,” remarks Herrera.  “It’s the only way to achieve efficiency in the transaction.”

Fee-for-service is not for everyone.  The model works best for consumers who have a definitive timeframe to buy or sell and are 100% committed to completing a transaction.  In a fee-for-service model everyone stays motivated and on track to close a transaction efficiently.  “We leave the ‘looky-loo’ consumers to the agents who are willing to take the risk of not getting paid for transactions that don’t close in exchange for the lucrative 3% commission on transactions that do” explains Herrera.  “We want real estate to be like any true services profession where consumers pay for the services they use and employees can count on a regular paycheck.”  

Selling a home in today’s declining market is not only challenging, it’s expensive.  The cost of selling a house still hovers around 10% of the home price.  That is a lot of money especially in markets where home appreciation has slowed to single digits or stopped altogether.  The most substantial of these transaction costs is the commission of 4-6%, followed by government excise or transfer costs of 1-2%, title and escrow fees of 1%, and finally any pre-payment penalties of 1%.  Historically, paying 8-12% to sell a house has not been a problem because homeowners have has always seen positive gains in their values.  However, as prices have fallen in the last year, many homes purchased during the height of the market in 2006 are taking on a new dimension: negative equity.  

Watching neighbors voluntarily walk away from their properties because it makes better economic sense than continuing to pay their mortgage is causing homeowners to suddenly take notice of what it actually costs to sell a property.  Sellers have never had to envision themselves writing a check to the bank at closing.  “It is time for changes in the real estate market,” says CEO Herrera.   “A real estate model based on fee-for-service is the only fair, practical, and straightforward option in today’s marketplace.”

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About RT Brokerage Services
RT Brokerage Services, Inc. is a full-service, licensed real estate brokerage in Washington State. We provide consumers with real estate services on a fee-for-service basis. That means we track our time and charge hourly rates for the services provided. The model is like any professional services profession that operates under a fee-for-service compensation basis (e.g., law, accounting, and engineering): you only pay for what you use.
Visit us: www.rtbrokerage.com

Website: www.rtbrokerage.com