395 Realty: The Flat Fee Model That Saves Clients Money

With nearly six decades of combined experience in the real estate business, Kevin Hopkins and Greg Shahan knew they could create a better way of connecting homeowners and buyers. Eight years ago, the pair formed 395 Realty and transformed the selling and buying process for their clients, who pocketed thousands of dollars in savings with this innovative business model.

“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.”

The 395 Realty business model is focused on selling hundreds of homes at a flat-fee rate, not a few houses sold at the typical six percent commission that other brokers use. Clients are delighted with the thousands of dollars that stay in their pockets.

“For our flat fee of $2,495 to list your home, we will be your full-service brokerage,” Kevin affirmed. “We go over pricing reports with you. We provide high-quality photography of your property and 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.”

Changing the Real Estate Marketplace
The internet has transformed the process of selling in the real estate market, allowing Kevin and Greg to offer the 395 Realty concept to homeowners. Most clients turn to the internet and the convenience of their desktop or phone to review homes in the KC-metro. Much of the work that years ago was completed by an agent is now done by the buyer. Also, in the past, a large portion of the cost of selling a home went to an advertising budget for newspaper ads, brochures and more. Kevin and Greg claim that as most of those expenses have been eliminated, the savings are largely not passed on to the customer.

Currently, in most transactions with the traditional percentage-based model, the home’s seller pays a five percent to six percent commission that is split between their agent—the listing agent—and the agent representing the buyer.

“For example, with a commission of six percent, three percent goes to the listing agent and three goes to the buyer’s agent and many sellers are beginning to ask, ‘Why should I pay three percent to my listing agent and also three percent to the buyer’s agent, especially if the buyer has already agreed to pay the buyer’s agent themselves?’” Kevin explained. “For a $400,000 home, that’s $12,000 the seller would normally pay their agent and $12,000 to the buyer’s agent. With 395 Realty’s model, a seller would only pay $2,495 and the buyer agent’s commission is negotiable.”

While 395 Realty passes these dollars on to the client, the services you receive aren’t shortchanged. When you work with Kevin and Greg, rest assured you’re receiving the best real estate experience, knowledge and tools available in the KC-metro.

Customary Ways Facing Lawsuits
Now, the traditional way of doing business is under fire. In 2019, lawsuits were filed in Kansas, Missouri, Illinois and other states, challenging the fee structure that has existed in the industry for years. In the class-action suits, home sellers claim 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.

“These lawsuits, 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 doesn’t 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.”

“We are consumer advocates working to offer a good service at a fair and reasonable price. That’s it,” Kevin stated. “At 395 Realty, we’ve created a fee structure that’s fair and reasonable for both parties. It’s not a gimmick; it’s not intended to be some type of a discount service. It’s a full-service listing real estate company with fees and structure based on what is fair and reasonable for the consumer and our company.” ■

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