395 Realty: Consumer Advocates, First and Foremost

The business of real estate can be confusing for both sellers and buyers. Finding an experienced agent you can trust, understanding if a property is priced appropriately, and staging a home for fast sale are all parts of the equation. Then there’s having a real conversation with your real estate agent, whether you’re buying or selling, about the services they provide and the fees involved. 

Seven years ago, 395 Realty partners Kevin Hopkins and Greg Shahan saw the great need in the real estate market to revolutionize the selling and buying process for their clients. “It was truly a move to advocate for the consumer,” Greg said. “We chose to create a competitive fee structure that is fair and reasonable for both seller and buyer and at the same time provide everything a full-service real estate brokerage does.”

Disruptive Innovation
The internet has already disrupted the traditional model of real estate sales. Today, it’s rare for agents to spend a full day showing homes to buyers. Web-savvy buyers have already done their homework, taking on many of the tasks that were previously done by an agent. Expensive print advertising has been replaced by colorful websites with professional photography. Yet the consumer who’s not a customer of 395 Realty may not be benefiting from the savings.

“Before the internet, a seller compared one broker to another and was careful about what broker would advertise their property to give it the maximum exposure,” Greg related. “It was very expensive. Brokers not only earned their commission, they expended a large portion of it on their advertising. With the internet, almost overnight, marketing expenses virtually went to zero. Websites offered free marketing—no more print marketing. We put a house in Multiple Listing Service and in minutes it’s exposed to virtually every buyer in the marketplace. Seven years ago, we saw that there was a better way for the consumer. Plus, we agreed that it’s the right thing to do for our clients.”

“For our flat fee of $1,995 to list your home, we will be your full-service brokerage,” affirmed Kevin. “We go over pricing reports with you. We provide high-quality photography of your property and we provide staging consultations to make your home the one that catches the buyer’s eye. We list your home on the Multiple Listing Service, which gives thousands of potential buyers access to it, and we work with feedback services to make sure your property is getting the attention it deserves. We handle all contracts, documents and details regarding the transaction all the way to closing. Again, we are a full-service real estate brokerage.”

Ahead of the Curve
In March and April 2019, lawsuits were filed in Kansas, Missouri, Illinois and other states that challenge the fee structure that has existed in the industry for years. In the class-action suits, home sellers assert that the National Association of Realtors®’s compensation policies, which require all member brokers to demand blanket, non-negotiable buyer-side commission fees when listing a home on a Multiple Listing Service, is a violation of antitrust law. 

Currently, in most transactions with the traditional percentage-based model, the home’s seller pays a 5 percent to 6 percent commission fee that is split between their agent—the listing agent—and the agent representing the buyer. “For example, if a commission is 6 percent, 3 percent goes to the listing agent and 3 percent goes to the buyer’s agent. Sellers began to ask, ‘Why should I pay 3 percent to the buyer’s agent if the buyer has done much of her agent’s work?’” Kevin explained. “For a $400,000 home, that’s $12,000 the seller would pay the buyer’s agent. With 395 Realty’s model, she would pay $1,995 and any difference would be left for the buyer’s benefit. It’s an equation we feel responsible for educating our clients about as well as saving them money.”

“These lawsuits, which, if successful, could impact the industry in ways that will lead to greater transparency and will allow the buyer to negotiate a reasonable commission that has nothing to do with the seller,” Greg noted. “395 Realty is already at that point in our business model. We advocate for the fact that the seller does not need to offer a buyer’s agent commission. Most buyers need an agent; the confidential buyer’s agent contract specifies the commission that the buyer is responsible for. The sellers are beginning to question why they should offer any commission if the buyer has already agreed to pay their agent. We simply provide clarity for our clients and let them know up front what their costs will be, independent of the negotiated price of the home.”

Kevin and Greg have more than 50 combined years of experience in real estate. “We are consumer advocates working to offer a good service at a fair and reasonable price. That’s it,” Kevin stated.

Greg agreed. “We want to convey the truth. It’s the right thing to do.” ■

To learn more, visit 395realty.com or call 913-944-4000.