Selling or buying a house in this market could be a challenging experience. Real estate in the country is a complicated subject to grasp if new, plus a thriving market, hike in real estate agent commissions, and a demand for affordable housing has led to buyers, sellers, and agents wanting to make the most of a property deal. It is interesting to note that it is predominantly a sellers’ market and one has a lot many options to hop and shop for services they need rather than sticking to a full-service estate agent who would charge a 6% commission on a single deal. For Sale By Owner (FSBO) sellers now can look for either Flat Fee MLS services, discount real estate brokerage, or low commission real estate agents.
1: What are agent matching services?
National Association of Realtors has surveyed that more than 90% of the buyers and sellers go online to find leads. Also, more than 40% of buyers’ first instinct is to first surf the web for desirable properties to buy. Post pandemic world has enabled more and more people to go online and conduct their business using advanced technology and Artificial Intelligence (AI). There is an advent in the popularity of online real estate companies that offer all services ranging from free agent matching services to closing assistance. Sellers typically key in their property details and sign up for a package or pay a flat fee to the company. This company then assesses the requirements of the sellers, the kind of property which is put up for sale, and then matches them with a few agents who would suit the bill. The sellers then interview the agents already shortlisted by the real estate company and then go ahead with one. Numerous companies claim to offer these services free of cost but there is a catch generally associated with this. Clever Estate Company gathers all the classified data from the seller and passes it on to the agents who in turn pay Clever a service fee after locking in on a client.
Sellers, especially the ones new in this field, need to be smart in selecting a suitable agent matching company online.
2: Advantages and disadvantages of using an agent matching service
Agent matching services have equal pros and cons. Individual experience, type of property, and market condition are the deciding factors while using an agent matching service.
A: The best part about using an agent matching service is that it gives you a variety of options. Sellers can interview shortlisted agents and select one.
B: Companies like Homelight study the agent’s profile before deeming it suitable for the particular seller. Homelight reviews suggest that they look up the local real estate trends and individual needs to finalize an agent.
C: Agents referred through a service like this have in-depth insight into local market trends, which is crucial for buyers and sellers.
D: There is a danger that you could be stuck with the wrong agent who is not a good fit for your needs. In this case, the real estate company does not take any responsibility after the agent takes over.
E: Agents might give no discount which is unaffordable for a seller at any cost.
3: Top Agent Matching services
Homelight has an automated system that provides the sellers with agent options after basic property details are typed in. They have a concierge service that helps in the process and addresses the grievances of the clients in the matter. Homelight also gives freedom to walk away from the service free of cost. If the seller matches with an agent, the fee charged is 5-6% depending on the market rate, which is a full charge without any discount. In addition to this, Homelight charges 25% referral fees to their agents and 30% for the houses that are worth $4 million and more.
Homelight reviews suggest that the company, which acts as a mediator between buyers, sellers, and agents, is expensive. There is no chance to cut costs with this company.
Redfin takes a 1% commission on the total sale. If you take their concierge package, you have to pay a 2.5% commission, which is not budget-friendly at all. The company has an agent finder tool that is used by the sellers to find what they are seeking in an agent. The catch here is that all the agents working with them are salaried and hence have no additional incentive to sell your house at a higher price. Plus, the reason Redfin can afford to charge just a 1% commission is that one agent overlooks two or three sales at a time. Redfin reviews state that there is no personalization in services. Also, first-timers think that there is a DIY approach by Redfin which is not suitable for all.
UpNest’s agent matching service is free of cost and automated. Sellers get proposals from different agents once they have put in their details on the company website. One of the salient features of UpNest is that they have an in-house expert have a look at the agents and shortlist them further based on the seller’s need and demand. After this, the seller interviews potential agents and finalizes one. There are no upfront fees to be paid to the company. UpNest has a huge pool of experienced agents and they are strict with the fact only the top 5% of them cut through their network. Having said this, the agents do not offer any discount to the seller on commission as they have to pay referral fees to the company on closing the deal. One of the cons of choosing UpNest it is not pocket friendly. You can look more into their business model by going through the Upnest Reviews.
Ideal Agent provides the seller with an agent matching service but according to the reviews, it takes around 2 weeks for an individual to finalize an agent and then another few days to get the property listed on MLS. The reason is that the website is not technically sound with a weak algorithm. The only saving grace is that the agents associated with the company are well qualified, mostly. But having said that, the company does not do a proper quality assurance check after the seller has finalized an agent through them. In addition to this, Ideal Agent charges 25% referral fees.
4: Alternatives to agent matching services
The problem with agent matching services is that it does not come cheap. Even if the service in itself is free, there is seldom any discount given in the agent commission department. The best alternative then is to go for a Flat Fee service like Houzeo which does your listing in a quick and efficient manner. It is ideal for FSBO sellers for they have to pay a fee of only $329 and get their property listed in a matter of a few hours. The listing is given nationwide exposure by spending just a few hundred dollars as opposed to a staggering 6% commission. Plus, you pay only for services on an a-la-carte basis and enjoy full control over your sale.
HomeLight and Redfin reviews suggest that agent matching services are workable for sellers and buyers if they have no budgetary concern but otherwise it sure is an expensive affair. Also, most of the agent matching services are online hence a lot depends on the algorithm used by the companies. This could lead to a mismatch between you and your agent, and the final sale might suffer because of this. It is therefore smart for sellers to go for Flat Fee MLS services like Houzeo to save up on thousands of dollars in addition to making use of their advanced technology to crack a great deal.