This is the question everyone asks. “Great idea,” they say, or “cool concept…but does it work?”
The answer is a resounding, “Yes.”
We have been in continuous operation since 2002 and have sold over 3,000 homes in the greater Madison area with a total market value of $800+ Million. Our broker/manager, Stuart Meland, is the highest grossing residential real estate agent in Dane County.
Our concept has clearly worked for thousands of area homeowners. However, volume data is only part of the story. A more thorough question would be:
How well do our properties sell compared to other Realtors®?
Thankfully, the MLS is a huge statistical dataset. We can query it in a dozen different ways to find out how our listings behave compared to “traditional” Realtors® and industry averages.
For Residential (Single Family & Condo) sales from 2003-16 in the South Central Wisconsin MLS (SCWMLS), the following statistics were calculated:
Average Days on the Market:
73 for Madcity Homes listed properties vs
95 for all SCWMLS listed properties
Average Sale Price:
$267,732 for Madcity Homes listed properties vs
$191,445 for all SCWMLS listed properties
Sale to List Price Ratio:
96.86% for Madcity Homes listed properties vs
96.47% for all SCWMLS listed properties
The stats indicate that Madcity Homes listed properties sell quicker and for closer to their listed price than traditional listed properties, despite being on average more expensive. Nowhere in this data is there any indication that our clients are in anyway disadvantaged compared to “traditional” Realtors®.
And now on to the next most relevant question:
How is this possible?
To be honest, we're not exactly certain. We have many theories but no one knows for sure why our properties sell faster than the traditionally listed properties. Here are a few of our best guesses:
Home owners know their properties, their neighbors, and their neighborhoods better than agents.This is pretty obvious. If an agent has a dozen houses listed at one time, how well does he/she know any of them?
Home owners have an incentive to maximize their sale price while agents have an incentive to reduce their marketing costs.This point was illustrated by the folks over at Freakonomics when they uncovered a major discrepancy between the pace of price reductions for agent-owned properties compared to agent-listed properties. Have a look for yourself on their blog.
Our reduced transaction fees speed up the process.This is our preferred, and somewhat self-serving answer. Reduced transaction fees allow deals to come together faster because both the buyer and seller benefit. We have actually seen this in practice. When two identical properties are listed on the same street, ours will almost always sell first. Our maximum transaction fee is 4.25% compared to 6% or even 7% for some other Realtors. That gives our clients a competitive advantage in all negotiations.
What does it all mean?
It's pretty simple. If you're able to answer a few phone calls, open your door to prospective home buyers, and take a little initiative in the process, you can save money and sell your home in the most effective way possible.