What They Are Not Telling You About Homie
First of all, I need to commend Homie for trying to change the real estate industry. The 6% commission structure is no longer valid. With the internet, listing agents no longer need to be experts in neighborhoods because all the data is online.
They also no longer need to incur large advertising expenses with magazines and newspapers like they used to. Listing and advertising a home has become fairly inexpensive, so why are listing agents still demanding 6%? Things need to change.
However, there are a few things you should know before you decide to list with Homie:
1) Homie's flat fee model is nothing new. They advertise it like it's some revolutionary idea, but flat fee agencies have been around a long time. Utah Home Central has been offering flat fee pricing since 2007. Homie is the new kid on the block, with a very large advertising budget.
2) There are two types of Flat Fee Agencies. Full Service and Limited Service. From what we can tell, Homie falls into the category of Limited Service or maybe we should say, Self Service, though they do offer a few more services than most limited service agencies.
3) When it comes to limited service flat fee agencies, Homie is probably the most expensive. From our perspective, you shouldn't be using a limited service agency anyways, but if you're going to, you can find others for a lot cheaper.
4) There is a lot of risk using a limited service agency. I know, because we used to be a limited service agency. YOU MAY NOT BE SAVING AS MUCH MONEY AS YOU THINK. For more information on this, watch our dry, but very informative video on - The Dangers of Using a Limited Service Agency.
5) Homie is trying to use technology or software to help homeowners sell their house without an agent, saving them a large commission. I think that's great in concept. However, there are too may variations that can occur in real estate transactions for any software to handle. Software has its place, but it will never replace an agent with years of experience and expertise.
After looking on their website and looking over their reviews, here are a few of the pitfalls their customer's are reporting:
- Hard to reach a live person. This is probably the most common complaint. Again, they are wanting you to use their software / technology for communiciation. It sounds like you're encouraged to use email, but I think they do have a phone number.
- Their automated system isn't perfect yet - this is probably the second most common complaint. However, other reviews said things went smoothly, so I guess it depends on the situation.
- Takes 9 days list your home. I guess this isn't a big deal, but a full service agency can have it listed much faster.
- Once you're under contract, you're on your own. This was another complaint we saw several times. Users said there didn't seem to be a lot of help after your house goes under contract. This is a very important time period, and many deals fall through during this phase if things aren't handled just right, so I can understand their frustration.
- Have to stage your own home. Some people are good at this and others are not. A full service agency can help you with this and a well staged home can bring you thousands more.
- Take all your own appointments and gather all your own feedback. Not a big deal, but definitly something you get with a full service agency.
- Slow to respond. Another complaint we read about was their agents or attorneys, not sure which, were slow to respond. One reviewer even said they lost the home they wanted because it took Homie too long to get back to them during the offer phase. This is a common theme with most limited service agencies; they are simply spread too thin.
- You handle all correspondence with the counterparty (buyer or seller). This may not seem like a big deal, but buyers and sellers are constantly doing things to annoy each other. Using an agent as a middle man serves as cushion to keep things civil.
Homie also has lots of positive reviews. I'm sure for simple transactions, their software / selling model works great. You can read their reviews by clicking here.
As I mentioned above, it doesn't matter how great the software is, it will never take the place of a human (agents) with years and years of experience and expertise, who will hold your hand all the way through the process.
As I've already mentioned, I think the current commission structure for most traditional agencies is outdated. It's ridiculous that home owners have to pay so much to sell their home. More and more agencies are jumping on the flat fee bandwagon and things have been changing, but Homie is now accelerating that cause, so that's great.
However, they are still a self service company and because of my past experience, I'm not a proponent of limited service or self service agencies. Selling a home is not as easy as selling a car. There is a reason agents are required to be licensed and to get hours and hours of training.
There are plenty of full service, flat fee agencies who will save you thousands in commissions, but still provide much better service.
Using a limited service agency can be very risky. You might actually be losing thousands of dollars and not even know it. When we were a limited service agency, we saw home owners literally lose thousands of dollars because they didn't know what they were doing.
To learn more about this, here are a couple of links to consider: