The Reality of Real Estate (BlueRoof Blog)

Thoughts, opinions, and truths about real estate and life as I see it...

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Location: Salt Lake City, Utah, United States

I like long walks on the beach holding hands and.... oh, wait- that's a different site.

Friday, July 07, 2006

How BlueRoof is different from Redfin and BuySide

This afternoon I attended a Board of Realtor business luncheon and I spent some time explaining to my friends in the business what BlueRoof is all about. Naturally, people were curious about it because it is a new concept so I would like to explain a few things about the site, and in particular, how we are different from Redfin (which many people asked).

Lately I have been teaching the agency 1 & 2 courses for the real estate school and I tell the students that I teach the courses because I believe in agency and what it stands for. I don't ask to receive a teachers salary for my time because that's not why I teach. I just like the opportunity to discuss with these new agents entering the business how important agency is and how you always win if you put the client first.

BlueRoof is all about the consumer. Our business model is about empowering the consumer with choice. We connect buyers and sellers together in one place with a Realtor coordinating the transaction so everything goes smoothly. That sounds canned to me now because I've made that exact statement so many times, but it is the essence of what we are doing.

Buyers can find a home on their own and make an offer directly on and receive 50% of the buyer side commission. We do this because they did the work of finding the home. We are still compensated for representing them but they will receive benefit from doing the work of finding the home, if they want to choose that option. In that way we are similar to Redfin.

But we are a company of Realtors and even our staff members are licensed Realtors. If a buyer wants to have an agent help them right from the start, as most have and probably will, one of our licensed agents will help that client in the traditional way, including setting up showing schedules and showing them through the homes. And the buyer will still receive a rebate of the commission as our closing gift to them (many agents give a gift basket, we give a rebate). In this way we are not the same as Redfin, as we do not refer the buyer to an agent with another brokerage and collect a referal fee, we have Realtors at BlueRoof who do this work.

Another difference between us and Redfin, or any other real estate website that I know of, is that a major part of our model is to have FOR SALE BY OWNER (FSBO) homes on our website and help them sell also. Hopefully local agents will find this helpful because they can search for "Agent Friendly" FSBO homes, which means that the sellers are willing to pay a buyer agent commission. So these agents will have more homes to show their clients while still knowing they will be compensated. And hopefully this will also be another source of comps for local appraisers trying to get an accurate value on a property, especially if they are having difficulty getting the value to come in on a property because of the appreciation we are seeing in our market right now.

Sellers can sell FSBO and market their home on our site for free. When they find a buyer (buyers can make an offer on the home on they can have us coordinate the transaction for them for $1000. Most FSBO sellers want an agents help, they just don't want to pay the traditional fees.

A seller can also have a full MLS listing for 1% of the sales price (plus whatever they want to offer the buyers agent- we suggest 3%). This includes full representation, placement in the MLS, a full professional virtual tour, showing coordination, and a professionally installed yard sign. We help them all the way through closing.

I think Redfin is a good concept because it gives the buyer a new option. And we give the client a couple more options, and I think that's a good thing. As I stated in my last post, this has been an exciting year for real estate. When I first about Redfin's new business model I was a bit dissapointed because I had not put BlueRoof together and they beat me to being "first to market" with the concept of making the offer online, but then I realized it was also a good thing because now I had an example to look at. I was also relieved that my concept has a few pieces that, as far as I know, nobody else has done.

The new business models that are coming out now, like Redfin, Zillow, Prosmart, Trulia, and now BlueRoof are all ultimately good for the consumer because the consumer has more choice and, finally, real options outside of the traditional real estate mold. The large brokerages aren't going away and that's not a bad thing. If someone wants to pay a traditional fee so they can work with someone affiliated with a national brand, or they just like that agent, then more power to them. And for those who want the choices we offer...

Tuesday, July 04, 2006

BlueRoof website launched this weekend

I've been anxious to finally be able to say that. Our website launched this weekend, although it is still far from being a finished product. Hopefully consumers will see the value in the model we have developed.

I've been researching and designing the model for a while now and it's been interesting to see how fast the industry has been evolving this year. I think the industry is finally going through a revolution, and it's really an exciting time to be in the business of real estate.

I think that the consumer wants to have the help of a professional Realtor when they buy or sell property. Having someone with real knowledge and expertise to guide you through the transaction and ensure the correctness of it- that is important. But the consumer is starved for choices and value. The historical commission structures don't appeal to most people and haven't for a long time, but they only had two choices- either go it on your own and try to sell "For Sale By Owner", which means being unrepresented and having all the buyers who are working with agents not see your home, or they could pay very high commission rates of 6% or more to have an agent represent them.

And if it were that simple the choice would be much easier. But then consider that most agents are horrible service providers and spoil the experience for their clients and the fact that most brokers lock their clients into contracts for months that not only guarantee that the broker will be paid, but also prevent the consumer from hiring a better agent to help them.

It only makes sense that consumers are tired of the old guard of Realtor and want a fresh alternative. Enter Propsmart and Trulia and Redfin and Zillow and now BlueRoof to give the consumer better technology that can add more value to their experience.

The BlueRoof business model is to connect buyers and sellers together in one place with a Realtor coordinating the transaction so everything goes smoothly. Sellers can list their home and have full representation and a complete marketing plan for 1%. Buyers receive a rebate of any commission received, and when a buyer buys a home that is for sale by owner we'll help them coordinate the transaction for $1000.

Buyers can find their new home on their own and make an offer on and receive half the commission or they can have an agent help them find their new home right from the start and still receive a commission up to $3000 (plus an additional rebate of up to $3000 if they use BlueRoof mortgage).

The website having "For Sale By Owner" homes on it hopefully can help local agents as well by providing a search for these FSBO homeowners that are willing to pay a buyer agent commission. Also appraisers can benefit from having a source to find comps when the MLS can't provide them with homes that will help with their appraisal.

I'm sure we'll learn a lot as we go, but it's exciting to see it begin, finally.