Iggys House is an interesting concept. Sign up as a seller and you can list your home on the MLS for free. There is really no catch. You are not obligated to sell through their agency.

This service is currently available in Oregon, but not in some other States. Specifically, Midwestern and Mountain States. States that apparently nobody wants to move to…Woops, I didn’t mean that Heartland. We love you!

They also put your home on Realtor.com, Wall Street Journal, etc. Isn’t that the result of listing with MLS? Iggy, please correct me if I’m wrong..

Basically, IggysHouse is a lead generation tool for BuySideRealty, an innovative realtor that operates in a similar fashion to Redfin. The primary difference being that Redfin refunds 2/3 of the 3% buyer’s agent traditional commission to the buyer. That amounts to 2% of the final sale price. BuySideRealty will refund you 3/4 of the buyers’ agent commission that they receive, so the BuySideRealty offer is slightly better.

Redfin requires a minimum $3000 comission payout, so the home you buy needs to cost at least $300k. The advantage to BuySideRealty is that you receive the comission as a check, within 14 days. You can apply it to closing costs, but since most buyers will have a lender lined up in advance, the majority of buyers will opt for the cash rebate option.

IggysHouse.com is a brilliant lead generation tactic that provides a valuable service to sellers. Their buyer’s side business isn’t a new concept, but they clearly know who their competitors are, and how they plan to differentiate.

Agents need to move faster to adopt new ways to compete with this kind of efficiency. The human touch will always be necessary, so I doubt that commissions will disappear altogether, but the cost of buying and selling a $400k home through a traditional agency is over $24,000. The paperwork, legal process, and due diligence are practically the same whether the home is $400k or $200k. The stakes are higher for sure, but if the homeowner took the original risk in buying the home, so why should that risk be transferred to the agent as a % of the home price rather than as a flat rate or negotiated rate?

I’d like to get comments from agents. How can a seller create a contract with agents that provides the agent with a fair reward for service, above-and-beyond? Possibly finding the right buyer at a max price, and keeping 50% of the difference between sale price and “walk away” price? Are there other options there?

Traditional agents’ pricing model is facing significant risk. How do realtors adapt without selling out their fellow agents? How does an entire industry shift at once? Some tough challenges for an industry that clearly prefers to ignore or protest the future, rather than lead it.

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