Real estate rebates: Best way to go broke or become rich?
When The Real Estate Cafe opened in 1995, we were the first real estate cyber cafe in the world. Equally radical, then and now, is our "Menu of Fees & Rebates" which rebates up to 100% the buyer agency commission built into MLS listings (see article in the Wall Street Journal).
Seventeen years later, I did not expect to be attending a financial literacy class, for the 3rd time trying to strengthen financial muscles and sustain a business model that is based on the belief that "the best way to become rich is to enrich others."
Ten days ago, I heard a leading housing economist at MIT (and former professor of mine 30 years ago), say, "The Best time to buy in Boston was last year." Ironically, 2011 was The Real Estate Cafe's worst billing year ever, but one of our BEST years for new product development ideas based on the real estate business model of the future.
God wiling, our goal for 2012 is to collaborate with others to move our innovative ideas into the marketplace! As a virtual brokerage, are operating expenses are tiny compared to our bloated, brick & mortar competitors who's business models are increasingly obsolete. That's why one real estate thought leader says that "Small is beautiful" again in real estate.
Yes, small overhead expenses are beautiful for us and our do-it-yourself clients as well. Like other critics, I think the book Four Hour Work Week can prey on people's desire to become rich quick, without really trying -- two deadly sins, greed and sloth. But ironically, when our DIY clients select our highest hourly rate because they don't need much help, it only takes us four hours per week to break even (see footnote). We don't want or need to overcharge clients if they're willing to pay as they go. That's why we offer clients the option to get back 100% of the real estate commission back, as well as options to "buy down our hourly fee" from $150 per hour to half that -- $75.
To celebrate Valentine's Day 2012, we're reactivateing our "business sucks sale" to get $2,000 in the door quickly to take care of immediate cash flow needs. We understand that prepaying for real estate services may still be a radical concept to real estate consumers, particularly when larger buyer agency firms -- like Redfin, ZipRealty, and CondoDomain -- are abandoning or reducing their rebate models.
But we're still committed to "making others rich" by rebating up to 100% of our commission.
- What's the best way for us to communicate the amazing return on investment our rebates give DIY homebuyers in exchange for paying for services "a la carte"?
- Would you believe our most recent rebate was nearly a 10 to 1 return and our record rebate is over $100,000?
We're particularly interested in reaching couples who are newly engaged or newly married, and would like to get their feedback on a new rebate model that would allow their families to pay for our services and give the rebate as a wedding gift. In the meantime, we invite everyone do download this FREE guide as an example of our unconventional, consumer-centric, money-saving approach to real estate.
Footnote: Breakeven calculation based on our "survival budget" which does not include many one time costs or quarterly payments, savings for retirement, repayment of outstanding debt, etc.