home buyers can pay $2,500 upfront to be represented by a realtor

SEATTLE -- Seattle-based Progressive Homesellers has launched a new program in which home buyers can pay $2,500 upfront to be represented by a realtor who rebates their entire commission at closing. Because the buyer's agent commission is usually 3% of the purchase price, the buyer of a typical $400,000 Seattle area home would be rebated $12,000 at closing.

Progressive Affiliated Realtors do not show houses. Instead, buyers are advised to view homes themselves by attending open houses or scheduling an appointment with the agent representing the seller. The Progressive Affiliated Realtor handles every aspect of the transaction including drawing up, presenting and negotiating the purchase contract as well as coordinating with lenders, title companies and escrow.

"There's no reason that an agent selling a million dollar house should receive five times the commission of one selling a $200,000 house," said Progressive Homesellers CEO Jeremy Stamper. "Percentage based commissions don't make sense and consumers deserve an alternative." Stamper explained that Progressive Homesellers' program differs from other rebate programs at companies like Zip Realty and Redfin because these services are percentage based. "These companies give buyers a percentage of the commission back, but it's still a percentage rebate, and individuals buying more expensive homes are still penalized."

Progressive Affiliated Realtors are experienced agents at full service, brand name brokerages like John L. Scott, Century 21 and Prudential. Each has at least five years of experience actively selling real estate.

But Progressive doesn't limit their flat rate strategy to just home buyers, they also offer a similar strategy to home sellers and some local Real Estate companies are very unhappy.

Coldwell Banker Bain, one of Washington State's largest residential real estate brokerages, has threatened to sue discount brokerage Progressive Homesellers, complaining that the Seattle startup is unfairly competing for business by contacting its customers directly with a flat fee commission offer.


In a letter sent through their attorney, Coldwell Banker Bain cites a direct mail piece sent to one of its existing clients by Progressive Homesellers as evidence of the "company's efforts to tortiously interfere with existing listing agreements."

The direct mail piece, signed by Progressive Homesellers Broker Patrick Luckett, reads: "I noticed that your home is on the market for $399,000. If I'm correct, you'll be paying as much as $23,940 in real estate commissions. By my calculation, we will save you $9,470 by introducing you to an experienced Realtor at a brand name brokerage like Windermere or Prudential who represents sellers for a flat $2,500 fee. Please call or email me for a free introduction."

"There's nothing wrong with that letter," said Progressive Homesellers CEO Jeremy Stamper. "The reason that Coldwell Banker Bain is becoming so aggressive is that the six percent commission is being attacked from all sides and traditional brokerages are under tremendous pressure from their agents to do something about it. Unfortunately, it appears Coldwell Banker Bain has chosen litigation instead of open competition."

Progressive Homesellers has stopped soliciting active listings, not because of the lawsuit threat, but because it has recently joined the Northwest Multiple Listing Service, an organization that prohibits the practice.

National Realty News, a BEXT Inc. publication
http://nationalrealtynews.com/