They will get some flak in the tony areas but it’s a great way to make 12% commissions on expensive luxury properties ($2,000,000+ minimum) plus management fees. An excerpt:
Pacaso announced today that annualized revenue run rate has hit $330 million. In the second quarter of this year, Pacaso drew 1.8 million visits to its website and mobile app, up nearly 200 percent from the prior quarter. Its distributed team across 20 states has also grown from 30 people to more than 120 since January.
Pacaso declined to share specific metrics on the number of owners or houses sold, but said it has helped “hundreds” of people find second homes. It manages nearly $200 million in real estate assets. The company landed $1 billion in debt in March.
The startup is riding tailwinds from rising vacation home sales, driven in part by the pandemic and shift to remote work. Vacation home sales rose 16.4 percent year-over-year in 2020, and 57.2 percent during the first four months of this year compared to the same period in 2020, according to the National Association of Realtors.
And even if the real estate market cools down from record levels, Pacaso’s model becomes “more interesting in a softer market than a hot market, because it’s a more responsible way to own,” said Allison, who sold real estate document signing service dotloop to Zillow in 2015.
“In moments of correction, people don’t stop living, they just dial back the way they spend,” he said.
Owners must hold on to their share of a vacation home for at least a year, but can then sell it at any time — either for a profit, or a loss, depending on housing prices.
Pacaso is now live in 25 destinations around the U.S. It plans to expand internationally for the first time later this year in Spain, and has plans to launch in Mexico and the Caribbean next year.
Gaingels, Greycroft, Global Founders Capital, Crosscut, and 75 & Sunny Ventures also participated in the Series C round. Other backers include former CEO of Amazon Worldwide Consumer Jeff Wilke; Sukhinder Singh Cassidy and Theresia Gouw of the Acrew Diversify Capital Fund; First American Financial; Maveron; and Shea Ventures.
Mike sent out a comparison of mortgage lenders and their quest to disrupt the real-estate-selling business. Here he shows how Rocket is the dominant mortgage lender in the country, and their press release describes their ambition – they think being the jack-of-all-trades will cause them to dominate the space, and now every real estate company will have to offer all services just to keep up. The winners will be determined by who advertises the most:
Rocket Homes, a technology-driven real estate service provider and part of Rocket Companies, today announced it is revolutionizing the way home buying and selling is done in America by seamlessly integrating the tools, professionals and innovations needed to win in a red-hot housing market. Rocket Homes will be the first real estate company ever to create a wide array of choices for those in the market, putting clients in the position to create their own truly bespoke experience, rather than the traditional one-size-fits-all approach that has been the standard for more than a century.
The company is bringing together a comprehensive suite of services that includes: credit reporting, home search, the industry-leading ForSaleByOwner.com process, on-staff real estate agents, a nationwide network of trusted real estate professionals, iBuying services to provide a back-up offer to sellers – along with direct connections to Rocket Mortgage, America’s largest mortgage lender, and Amrock, a premier closing and settlement services provider.
“There is nothing more exciting than getting the keys to a new home, but far too often the process of getting to that point is confusing and fragmented. At Rocket Homes, we are laser-focused on using technology and innovation to create a fully customized and transparent experience that is stress-free and fully integrated – working seamlessly with sister companies to simplify and speed-up the process, all while saving our clients money,” said Doug Seabolt, CEO of Rocket Homes. “Whether a client is looking to sell their house on their own, get assistance from an on-staff Rocket Homes agent or meet face-to-face with our trusted local real estate professionals, we will have unique options and resources to help every client move through the process in a way that is fully customized to them.”
Homeowners looking to sell their property will have the ability to select the right experience for their needs and goals thanks to Rocket Homes Seller Solutions.Through the program, sellers can:
Leverage the industry-leading ForSaleByOwner.com platform that provides sellers all the tools they need to go through the process on their own. This option has become increasingly popular among homeowners in today’s competitive housing market.
Work with highly skilled, on-staff Rocket Homes Real Estate Agents that advise clients on the best list price, facilitate professional photos, list the house on the local multiple listing service, negotiate offers and handle all paperwork. Just like Rocket Mortgage effectively serves clients in all 50 states from centralized locations, Rocket Homes agents will assist with the most complex moments of the real estate transaction from downtown Detroit. With this option – which will be open to the public starting in the fourth quarter of 2021 – homeowners pay a significantly lower commission of only 1.5% for the selling agent, as opposed to the traditional fee of 3% — which represents a savings of $4,500 on a $300,000 home sale.
If a homeowner wants to work with an expert in their local area, they can tap into the Rocket Homes Verified Partner Agent Network of trusted and vetted professionals. This is a nationwide group of the best real estate agents who consistently receive top ratings from the clients they serve. The Partner Agent Network provides the option of a high-touch, in-person experience that some sellers desire. It consists of thousands of professionals working in every state, representing more than 3,000 counties across the country.
True to the company’s promise of providing certainty in complex moments, a soon-to-be-released iBuyer program, facilitated through third-party partner companies, will ensure every owner is given the opportunity to receive a guaranteed offer on their house. Consumers who need to sell their house before buying another often lose out on their new dream home due to the need to make a contingency offer – meaning their deal hinges on closing the sale on their existing property. With the forthcoming program from Rocket Homes, these consumers will now have a guaranteed offer on their current house and can eliminate the need for contingency altogether.
Though this is probably intended to be a direct shot at Zillow (who gets their feed from the IDX}, it will be the next step in the elimination of buyer-agents and encourage single agency.
CHINO HILLS, Calif., Aug. 26, 2021 /PRNewswire/ — On September 1st, 2021, California Regional MLS (CRMLS) will officially update its rules regarding Internet Data Exchange (IDX) websites to benefit agents and consumers on both sides of the residential real estate transaction.
IDX is the term the real estate industry uses for the portions of agent and broker websites devoted to searching MLS data. IDX sites using CRMLS data will soon give consumers a much clearer picture of agents’ relationship with the listings consumers find online.
The newly updated rule, number 12.16.5 in the CRMLS Rules and Regulations, will read as follows:
“12.16.5 Listing Credit. All Listing Brokers grant permission for any Advertising Broker to display any listings submitted to the service by the Listing Broker only if the listing display or advertisement is clear so that a reasonable real estate consumer understands:
a) Who is the Listing Agent & Broker, b) Who is the Advertising Broker and c) How to contact that Listing Agent or Broker.”
In describing the updated rule, CRMLS CEO Art Carter said, “It shouldn’t take a consumer more than a few seconds of looking at a listing to determine who the Listing Agent, Listing Broker, and Advertising Broker are.”
The CRMLS Rules Committee, composed of active real estate professional CRMLS users, devised the rule based on feedback from members of CRMLS’s participating Associations, Boards, and MLSs. The CRMLS Board of Directors, also working real estate professionals, approved the rule.
“CRMLS leadership has been discussing this subject, and this proposed solution, for years now,” said Carter. “Now that we have approval to update the rule, we’re beyond excited to help increase transparency and reduce friction for consumers, brokers, and agents.”
This is a repeat of the 2br house featured on my tour a few weeks ago, with the resulting sales price.
The agent admitted they priced this 2br house low on purpose to attract a crowd, and it worked. The list price was $699,000, and it sold for $1,100,000 cash. Meanwhile, the two other listings around the corner priced at $1,149,000 and $1,200,000 are still unsold.
Sellers are resistant to price attractively, but look how well it works when you Get Good Help!
It is a very rare occurrence where a buyer wants to cancel the sale after releasing all contingencies because they know they could potentially lose their deposit. Would they give up a five-figure or six-figure deposit easily, or fight it out with the seller? If they fight, then the property gets hung up in litigation and can’t be sold, and most sellers want to get on with the sale. Because in almost every case, the buyer will get his deposit back one way or another, should we just quit collecting them as part of the sale?
According to CAR – we don’t need a deposit to have a binding contract:
Q: Must a buyer give a good faith deposit in a purchase agreement for there to be “consideration” to make it a binding contract?
A: No. The buyer’s good faith deposit in a real estate purchase agreement has no legal significance. It is not required as consideration for the contract because the purchase agreement is a bilateral contract and the mutual promises of the parties serve as adequate consideration to make the contract binding and enforceable on both parties. (Bleecher v. Conte, 29 Cal. 3d 345, 350 (1981).)
Under the C.A.R. purchase agreements, if a contract is entered into and the buyer fails to make the good faith deposit as agreed to, the seller cannot simply cancel. Instead, the seller must go through the procedure of issuing a Notice to Buyer to Perform and giving the buyer adequate time to perform, and only then can the seller issue a cancellation.
Home sellers have a sneaky suspicion that they should hire a great agent, but they don’t want to pay 6%. These ads combine these two pain points beautifully, and offer to pair you with a Top 1% agent for only 2%!
Their fine print seems to back it up too:
*Our agents will list for 2% and offer the typical Buyer’s Agent commission in your market ranging from 2% to 3%. The average Buyer’s Agent commission nationwide is 2.5%. If a buyer calls on your house directly without an agent, our agents have agreed to do the entire transaction for only 2% total. Homes under $150,000 will have a minimum list side commission of $3,000.
Let’s get to the real truth. Several points:
They say their service is FREE. But they are running national TV ads? Who pays for those? The realtors pay for those! They have to give a split of their commission to the advertising company. Do you think the Top 1% of realtors are jumping at the chance to work for 2% and then give up 20% to 30% of that to the lead source? No way. They have enough other retail business that they don’t have to discount their commission.
The commission is ‘pre-negotiated’, but that only means that the realtors have to offer 2% as one of the commission options. Because the listing agent will also have a 6% commission option, they get paid LESS with the 2% plan. Because the best agent-teams have buyer-agents who get a spiff too, the 2% option will only rarely get implemented – there’s not enough $$ to go around. The home’s listing goes onto the MLS/open market, which means the chance of an outside agent selling the home is at least 90%, and because of the dis-incentive, it’s probably more like 98% chance of not being a 2% commission plan.
The listing agent may normally offer a 5% commission plan. But because he has to pay the 20% to 30% to the lead source, it will get passed on to the seller in the form of a 6% commission.
Because of the seller’s zest to only pay the 2%, they will sign up after a spectacular listing presentation that doesn’t reveal the truth about the chances of the 2% commission being so unlikely.
The sale will go smoothly, and the sellers will be on their merry way. If they happen to glance at their closing statement, they might notice that they paid 6% in the end, but hey, it’s over and they shrug it off.
There is one revelation of truth at the bottom of their website:
Two reasons to cancel open house if an offer gets accepted that day (which locks the seller to this buyer):
1) Buyer’s remorse sets in immediately, so it keeps the buyers happier because I’m committing to them and they don’t feel like I’m shopping their deal around, and
2) Keeps open house attendees from resenting the tease of seeing the house but not being able to buy it.
It is sensitive, and I can see why many agents go ahead with their open houses in order to get more leads and potentially a backup offer – but they risk tipping over the buyers. We already saw how easy the last buyers cancelled, so I don’t want to shoot myself in the foot.
We have five times as many realtors as we need, and the market has never been so competitive. Any advertising that would help consumers differentiate between agents would be the most helpful and pertinent information possible.
But hey, these guys are just trying to drive traffic to their website:
Here’s a great snapshot of how the vast majority of listing agents handle multiple offers. They just grab one, and kiss off the rest – which isn’t good for the sellers, it’s not good for the losing buyers who might have made a better offer if there was a highest-and-best round, and it’s not good for the buyer-agents who should have the right to compete fairly to sell the home.
But the listing agent gets to go back to sleep, so there’s that.
The most common response? “I just did what the seller wanted to do”. But isn’t it your job to advise them of a way to create a fair competition that could get them a better offer and more money? I think so.
