by Michele Newbern Gillis
Staff Writer
BuySide Realty, an online buyer’s agent, actually pays customers to find their own home.
Customers who purchase a home through BuySide Realty receive 75 percent of BuySide Realty’s commission, which is typically 3 percent of the purchase price, as well as access to technology and customer service from salaried licensed Realtors.
They rolled out their website, www.buysiderealty.com, last month to service Florida, California and Illinois.
“We are actually paying the buyer to use our services,” said Joseph Fox, founder and CEO of BuySide, Inc. “In the past, it did not cost the buyer to use the services of a traditional agent after finding their own home, because the seller paid the commission. Now, if buyers do not use our services, it will cost them. They will be passing up our rebate of thousands of dollars on a typical home.”
According to their website, here’s how it works:
BuySide customers do not pay to use the services. Homebuyers who have already searched and found the home they want can log on to the BuySide Realty website and get pre-approved for a home loan through the BuySide Mortgage Center ‘powered by’ Chase Home Finance.
Homebuyers who are still looking for a home can search BuySide’s free multiple listing service database and then get pre-approved for a loan. BuySide will inform any buyer of scheduled open houses to see listed properties and will schedule an appointment for a private showing for buyers with lender pre-approval.
When the homebuyer wants to make an offer on a home, they fill out an offer form online and submit it to BuySide. A BuySide licensed real estate agent then prepares the written offer and returns it to the homebuyer to review and sign.
Once the written offer is signed, BuySide submits it to the seller’s agent on behalf of the homebuyer. BuySide will then notify the homebuyer when the offer is accepted, countered or rejected.
If the offer is countered, BuySide licensed real estate agents will continue to work with the homebuyer until an offer is accepted. The homebuyer can track progress in every step of the process using BuySide’s proprietary Offer Management technology. Within 14 days after the closing, homebuyers receive a rebate check from BuySide for 75 percent of BuySide’s commission made on the purchase of the home. Or, if the buyer prefers, they can take the rebate as a credit at closing. In some states, the rebate must be taken as a closing credit.
BuySide is also departing from the traditional model by having agents whose financial incentives are based on service to the buyer, not on number or size of deals closed. BuySide’s agents are salaried, not commissioned, and a substantial portion of their compensation will be a bonus based on customer satisfaction.
“Our agents will not have a financial incentive to pressure clients to buy in order to earn a commission,” said Fox. “We think that buyers are looking for something better than that.”
Though it may seem this company is paving the way for people to buy homes without Realtors, but that is not true, said Fox.
“BuySide is creating a referral database of listing agents who have worked positively with BuySide buyers,” said Fox. “It will essentially provide a way to foster relationships with listing agents in each market as well as providing buyers a way to find a Realtor to sell their previous home. Often referring agents receive financial compensation from the Realtor that referred a client, but BuySide is not. This is a free service.”
They have an entire section of their website set up just for Realtors, www.buysiderealty.com/forrealtors.
According to the 2005 National Association of Realtor’s Profile of Home Buyers and Sellers, 64 percent of home buyers in 2005 found their own home without the assistance of a real estate agent. Yet the vast majority of these individuals turned to a buyer’s agent to complete the transaction.
Also in 2005, 79 percent of all home buyers used the Internet to search for a home, with 81 percent of them engaging a real-estate agent to help close the transaction.
“New real estate websites are popping up every day that provide more and better kinds of information. But information is just the beginning,” said Fox. “The most dramatic impact of the Internet is that it enables consumers to achieve major cost savings or, in our case, actually earn them thousands of dollars on a typical home.”
BuySide Realty was founded in 2005 by Fox and his brother Avi, who previously founded successful online stock brokerage firm Web Street Securities in 1996. The Fox brothers successfully took Web Street public in 1999 and later sold the company to E*Trade in 2001.