Iowa's real estate revolution
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Low inventories of homes for sale have resulted in a popularity boom for nontraditional listing services, multiple metro real estate agents told Axios this month.
Why it matters: We might be experiencing a transformation in how homes are bought and sold, our sources told us, which could either help save us money or be a source of remorse.
Flashback: For decades, homes have been largely sold through licensed real estate agents with access to local Multiple Listing Services (MLS), a tool that connects them to sellers through their respective brokers in exchange for sharing sales commissions.
- MLS databases offer access to the largest pool of properties for sale in a marketplace.
What's happening: The way we conduct real estate is evolving because of technology and market pressures that require fast buyer/seller action, Rob Doheny, a cofounder of the flat-fee brokerage Next Generation Realty, told Axios. His points:
- Sites like Zillow allow buyers to easily locate homes for sale and schedule tours themselves — work that agents often handled in previous years.
- Sellers getting multiple offers as soon as a home is listed question the value of paying agent commissions, typically 6%.
What they're saying: Low inventories have pushed more buyers to search for homes through companies that don't use local MLS databases, Ankeny RE/MAX agent and officer manager Kristen Geiger told Axios. She believes the popularity of those services may cool as more homes are listed.
- FSBOHomes co-founder Chad Boge says his business has consistently grown in the last decade. What’s happening is part of a "systematic, methodical change" in the way homes are sold rather than a momentary market trend, he told us.
- Next Generation has seen business spike about 25% in the first half of 2021, Doheny told us. (It uses a statewide MLS service — not one tied directly with the metro.)
The other side: There are benefits to using a Realtor, which some of these services don't offer, that can help sellers maximize profit and buyers avoid headaches, Geiger said.
- Perks include house showing, negotiation assistance and exposure on the larger MLS network.
- Homes sold by their owner fetched an average of $77K less last year, according to the National Association of Realtors.
The bottom line: It pays to weigh the current real estate market and evaluate your options before buying or selling, DSM reduced-commission agent June Mackay told Axios last week.