- Our original intention was to show agents how to build a brand from scratch.
- As a DBA experiment, it didn't generate hoped-for interest, but it laid the groundwork for another experiment: flat-fee services.
Inman Park Realty was created as a project for agents considering DBA (doing business as) branding.
Our intention was to build Inman Park Realty (IPR) from scratch and document the process so other agents could see for themselves how to create their own DBA companies.
As a DBA experiment, IPR didn’t generate the interest we had hoped for. But it did set in motion the process to extend the Inman Park Realty experiment into areas yet to be tried.
(The Inman Park Realty name reflects a neighborhood on the east side of Atlanta, and has no connection to Inman News.)
Don’t miss the author’s “Where Are MLSs Headed?” panel at Inman Connect New York
What happened after the DBA experiment?
The idea was to create the perfect real estate incubator.
The challenge: Upgrade the experience for both buyers and sellers while becoming a true value-add service to the community.
Given this, our first thought was, “Whom should we seek advice from?” History says “ask a Realtor.”
But many would argue that should be the last person to engage. Self-interested lot, Realtors are.
Remember, it’s 2017. Any process or person looking to change the real estate experience must first look to include the advice and expertise of the social media community.
Taking stock of what we created for the IPR branding project made us realize its electronic value. The website, inmanparkrealty.com, was getting traffic. The Facebook page and Twitter account continued to gain friends and followers.
The brand of Inman Park proved to be so strong within the Atlanta community that our platforms were connecting with users on a social level simply through that association.
The first version of Inman Park Realty lacked a true real estate end game. We were testing how well branding would do and paid little attention to ongoing development.
What’s the missing element?
To continue the IPR experiment, we needed to address the missing element.
We have a well-defined sales area with communications platforms in place. The only thing missing in this sales channel was the agreement between the parties involved. And this is where the IPR experiment took a significant turn away from the traditional real estate format.
The public has wanted a flat-fee agent commission structure for decades. And to be fair, providing flat-fee services on a scattered piecemeal basis is a nearly an impossible business model for an agent to execute.
If flat-fee pricing is the consumer’s “must have,” there really isn’t any way to provide such services without being in a well-defined sales area armed with today’s social tools and platforms.
In other words, if anyone ever wanted to provide flat-fee services in any serious way, they would need to create exactly what we had already created with IPR.
Why Inman Park?
Inman Park, Atlanta’s first planned suburban community (in 1896) is now considered a small, highly respected in-town enclave.
For perspective, Inman Park had just over 92 MLS sales transactions last year, totaling more than $40 million in homes sales. (Statistics from for-sale-by-owner sales are not available.)
If you apply an industry standard 6 percent commission rate for area sales in 2016, ex-Inman Park homeowners paid more than $2.4 million in agent commissions.
Now, it is true — 6 percent was not paid across the board. Some paid much less. But it is nearly impossible to see a scenario where anything less than $2 million total was paid out in agent commissions.
Considering the averages, the price of a detached home in Inman Park, with a traditional 6 percent listing commission, costs the homeowner more than $38,000 in agent commissions.
Care to guess how many days on market Inman Park detached homes averaged in 2016? Twenty-two. Yes, it took 22 days, on average, to sell a detached home in Inman Park — and homeowners still had to pay, on average, more than $38,000 in agent commissions.
This is impossible to justify. The starting salary of an Atlanta City policeman, who works for a full 12-month period, is less than the money agents received for their part in the average 18-day Inman Park sales cycle.
People don’t begrudge others for making a living. But people do have a problem when the optics are so wildly askew that they feel like a victim.
Traditionalists will be quick to point out an agent’s work is much more than just the 22 “on market” days. This is very true.
But homeowners are equally quick to point out that the expense of an agent’s business model is of no concern to them.
Additionally, with an average days-on-market number like 22, homeowners will likely have a difficult time understanding why they need to pay 3 percent to “protect” the buyer’s agent.
Selling the fear of agents not showing a property because it’s unprotected may be true in some areas, but it shouldn’t be for Inman Park. Being in a high demand, branded area, means the consumer comes to you. It’s not like anyone in Atlanta will ever say, “I never knew of Inman Park until my agent told me.”
Where we landed
Inman Park Realty will be a flat-fee service for the homeowners of Inman Park. It will be the same fee regardless of home type or sales price.
The fee will include traditional services, such as yard signs, lockboxes and dedicated sales agent support. Listings will be published on FMLS, GAMLS, Facebook, Instagram, Twitter, YouTube and other platforms as they become available.
All homeowners will receive log-in access to the Inman Park Realty social platforms to encourage participation and direct engagement. Additional communications platform support, beyond the MLS, will allow for unique custom home presentations and interactive capabilities.
In short, the IPR incubator will mirror what homeowners have long been asking for.
Can it be successful? Statistics say it has a good chance. But statistics, like Presidential polling, isn’t always a guarantee.
Success or failure will ultimately be on the agent who is executing the plan. A poorly executed great plan just might be better than a perfectly executed bad plan.
Don’t miss the author’s “Where Are MLSs Headed?” panel at Inman Connect New York
Jeff Bergstrom is Broker/Owner of Wynd Realty. You can follow him on Twitter @WyndRealty and on Facebook.
