Money-saving real estate business models — time for a mass movement?
Few people in the real estate industry know this month marks the 16th anniversary of the first convention for fee-for-service real estate agents. For consumers, the agenda for that two-day event is less important than the availability of local money-savings options and the track record of those alternative business models. Rather than focusing on how much money Real Estate Cafe has saved clients over the past 25 years, guess who said the quote in the photo above?
“The next major revolution in real estate will be fee-based services replacing the blanket commission pricing that has dominated the industry for so long.”
Would you believe that was the former chief economist of the National Association of Realtors in a cover story in 1997?
Historical Context
From our perspective, there have been five phases of the fee-for-service movement in real estate. Arguably, the movement showed most promise in the 4th phase when SoloPro generated buzz in the real estate industry as well as a Wall Street Journal article in 2016 but their on-demand model failed to scale despite an investment and strategic partnership with Lowes.
In October 2019, fee-for-service was once again held up as the future of residential brokerage when the New York Times published an economist’s description of How to Get a Better Deal From a Real Estate Agent. My hope is that will launch the 5th phase — the mass socialization of fee-for-service through a network of independent real estate consultants who collaborate, as needed, like millions of others in the gig economy.
What will it take to create a mass adoption / socialization?
#RE2020: Idea Bar
Idea Starter / Thought experiment: As @RealEstateCafe turns 25, we’re eager to experiment more intentionally with RECafePRO — a network of fellow fee-for-service pioneers willing to act as consultants on a task-by-task or project-by-project basis. Our goal is to form elite teams on the fly or over an extended period of time to offer high level services “a la carte.’ By working with fellow #RESages — solo entrepreneurs with deep experience, our goal is to EXCEED the level of expertise you’ll find at megabrokers and deliver millions in consumer savings without in-house conflicts of interest.
How can we create awareness of those money-saving opportunities? Gamification may be one way to spread into mass socialization — friendly competitions between rival groups, like alumni, cities or neighborhoods to see who can save the most money
To drive mass adoption, we won’t stop there. Working with a network of partners, we’ll invite friendly rivals to see how much social good they can do by sharing a part of their savings with their classmates, neighbors, etc. Think impact funding or crowdfunding via real estate rebates or #ImpactREbates.
Want to use Facebook’s new Messenger Room to brainstorm how we harness that network power and transform commission savings into a consumer movement to fund grassroots projects? Text your contact into to 617-661-4046 and we’ll invite you to one of our upcoming RE2020 Idea Bars.
EXTRA CREDIT
Want to come to RE2020’s Idea Bar well-informed and prepared to talk?Here are optional readings — snapshots from three or the five phases of the Fee-for-Service movement:
2nd phase of #FeeFS: 2004 Conference, National Association of Real Estate Consultants® (6/17-18/04)
4th phase of #FeeFS: Commissions of 6 percent for home sales once were the norm. That’s changing (WSJ, 4/15/26)
5th phase of #FeeFS: How to Get a Better Deal From a Real Estate Agent (NYT, 10/24/19)