Tell Me Why My Discount Brokerage Idea Is Bad: Calling All Agents

[James Kerson]

I’d like to start a new kind of real estate brokerage. It would dually represent buyers and sellers and charge a total commission of no more than 0.6%. Instead of depending on buyer agents to drive prospects from house to house, prospects would tour houses themselves, and unlicensed “door-openers” would admit them. The listing agreement would include within the commission property photos, a set number of “door-opener” tours, some hours of phone/Zoom consultation with a licensed agent to set a listing price and discuss offers, counter-offers, and closing mechanics. Ideally AI could improve the property analytics that shape listing prices, a competitive advantage over other brokers. While this brokerage would start in Ann Arbor, I would want it to expand to all of Southeast Michigan, then statewide, and ultimately nationwide.

Initial target users would be investors/flippers, in other words, more frequent flyers than typical homebuyers. Yes, this brokerage would eliminate buyer-broker commissions, which are under threat, anyway. Agents would be paid hourly, not by commissions: the brokerage and not the licensed agent-advisors would drive all listing leads. Agent-advisors would merely provide advice, coordinate property photos, and review offers with their principals. 

Agents, tell me why this is a bad idea. Be as blunt as you can.

[Steve K.]

This sounds like a great idea if you hate making money and love being sued.