Trelora Realty, a flat-rate real estate brokerage based in Denver, is now listing the commissions that home sellers are willing to pay buyers’ agents.
“I am pretty sure we are going to light a bomb,” said Trelora founder and CEO Joshua Hunt.
Trelora said it has buy-side commission rates on about 95 percent of the homes listed for sale in Denver and Boulder on its website.
Sellers must disclose how much they will pay buyer agents in order to list a home, but buyers typically don’t have easy access to that information.
Commissions tend to run in the 2.7 percent to 3 percent range on the buy-side in metro Denver.
On a $400,000 purchase, a 2.8 percent commission represents $11,200. Trelora charges buyers a flat $3,000, and highlights the gap as a marketing tool.
Given that many buyers do the legwork of finding and researching the properties they want to buy online, Hunt said it has become much harder for buyer agents to justify charging what they traditionally have.
Buyers should negotiate a lower commission in advance with their brokers, Hunt said, so they can have more money available to swing a deal in their favor.
Trelora estimates its flat-rate model would have saved Denver area buyers and sellers $743 million in commissions last year.
As might be expected, that message doesn’t sit well with traditional brokerages.
“Any time a buyer asks, I am more than happy to let them know what the commission is,” said Mark Williams with Kentwood City Properties in Denver.
Williams said flat rate tends to equate with lower service and he has never heard a client protest commissions after receiving a settlement statement or at the closing table.
“In fact it is usually just ‘Thank you so much for all of your work in getting this done for me!’ ” he said.
Disclosing commissions online and urging buyers to negotiate in advance may be unconventional but doesn’t violate any state rules, said Marcia Waters, director of the Colorado Division of Real Estate.
“Commissions across the board are negotiable,” she said.
Hunt expects that multiple listing services for Denver and Boulder will try to prevent him from publishing the information.
“We don’t believe they can stop us,” he said. “We will push on.”
Officials with REColorado, formerly known as Metrolist, declined to comment on whether Trelora was violating its internal rules and what actions, if any, they might take to block it from publishing commission rates.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
