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onny Ballesteros and his fiancée, Jen, were first-time homebuyers in the competitive San Diego market. They needed guidance but found traditional real estate agents too busy to provide it. Instead, they turned to TurboHome, a company offering flat-fee brokerage services for buyers. This approach not only saved them money but also provided the support they needed, including suggested homes and online chats about the process.
The residential real estate industry has been slow to adapt to changing consumer attitudes. A landmark lawsuit changed how commissions are negotiated, educating buyers that high fees don't make sense. New technology allows companies like TurboHome to deliver personalized service at a lower price point.
TurboHome's fee was less than half of what the buyer's agent would have traditionally earned on their $679,000 home purchase. The seller agreed to pay the reduced commission, saving the couple thousands of dollars. This shift in consumer attitudes is attributed to increased awareness and attention to real estate information displayed online.
The industry has seen little change despite the lawsuits, with commissions remaining high. However, new companies like TurboHome, ShopProp, and Arrivva are offering alternative services for buyers. These "fair fee brokers" provide a more personalized experience at a lower cost, challenging traditional agents' claims that low-cost service means sacrificing quality.
Douglas Miller, an attorney who instigated the commission lawsuits, argues that these new companies offer a better value proposition than traditional agents. Many real estate agents do few deals per year, making them part-time professionals. In contrast, companies like TurboHome likely have more experience handling transactions.
While some argue that traditional agents provide valuable relationships and expertise, others see advantages in working with low-cost brokers. Lisa Gill from Consumer Reports notes that buyers may benefit from a representative who's tapped into a network of agents, but also acknowledges the benefits of companies like TurboHome, which don't require exclusivity and can offer flexibility.
The evidence suggests that for many Americans, a "bare-bones" approach to real estate transactions works well. Miller, a licensed Realtor himself, charges half the traditional agent's fee and has seen success in facilitating dozens of sales per year. A recent report by Consumer Policy Center highlights companies like Clever, which offers experienced agents at a lower cost, as viable alternatives for home sellers.
