What are we even doing here?
This is the question I’ve asked my business partner, Dave, no less than a dozen times over the past few weeks.
I continue my complaint, If we can’t beat them, we might as well join them . . . no?
For the past year, Dave and I have reworked our business model from the ground up. I’d happily put our work up against any agent in our market without an ounce of doubt.
This belief is not founded on vibes or affirmations we speak to ourselves in the mirror each morning. It’s based upon the work we do — tangible and intangible — for our clients, measured in the quality of our deliverables (custom coded HTML CMAs, activity reports, market briefs), the soundness of our judgment (pricing, marketing, and offer strategy; tact in successful negotiation; genuine presence with our clients when it matters), and the outcomes our clients experience — namely, our ability to help them achieve their unique goals in any given transaction.
And, above all, we’re honest and upfront about everything — especially the cost of our services. Which, in most cases, end up being more affordable than the majority of our local competition. To be clear, we didn’t set out to be cheaper. Instead, we realized that to compete on service, our fees needed to be tied to the value of the services we render rather than to the arbitrary valuation of the asset being purchased.
In other words, we won’t gouge the couple buying a $2M home any more than we will dramatically reduce our fees for the couple buying the $500k home. The work of buyer representation isn’t inherently 4x harder or more risky because the home is 4x more expensive. Or, just as meaningfully, the job isn’t suddenly 4x easier and less demanding on our time and judgment just because the home is 1/4 as costly.
(More on how I’ve thought about buyer agent commissions here.)
Suffice to say, we offer a better service at a better price. In a rational economy, that’s a value proposition that — if true — cannot lose.
But economics are seldom rational, particularly in the world of real estate.
In real estate, consumers have been conditioned to associate lower fees with inferior service. Any agent or brokerage that attempts to depart from the traditional percentage-based-commission structure gets maligned as a ‘discount broker.’
Nothing new here. Some of my friends — whom I respect greatly — have been running non-traditional and/or flat-fee style businesses for years and have donned the discount broker label as a badge of honor.
I can’t.
Call it pride. Call it idiocy. Call it whatever. But I still cannot bring myself to accept the petty malignment of our business without a fight.
Why?
Because I’m not interested in competing for clients primarily looking for the cheapest option in the market. Our ideal clients are those who desire the best representation.
Speaking to buyer agency specifically, our flat fee, retainer structure is designed to remove potential conflicts of interest inherent to percentage-based commissions, which reinforces our ability to be the best — not merely the cheapest.
But if I’m honest, we’re nine months in, and the model is barely working. In fact, much to my distress, in many cases, our compensation model seems to be more of a barrier than a boost in winning potential clients’ trust.
I have theories as to why this is:
Most agents still tell potential clients that buyer agency is free to the buyer as it’s paid by the seller. Shocker here, but it’s next to impossible to compete with free. When we tell a buyer our fee is $15k (and that we’re nearly always able to negotiate it in as a seller-paid credit, if the buyer chooses), we immediately sound expensive — despite our competition’s 3% on the same $1M purchase being 2x the cost.
On that note, $15,000 psychologically lands as significantly more than 3%. Most consumers hear the percentage and accept it as (or close to) ‘standard’ without ever doing the math. Our transparency confronts the consumer with a number they’ve never had to consider before.
For those who do recognize that $15k is less than 3% of $1M (or whatever their purchase price is), they ask — sometimes only subconsciously — what’s the catch?
On purchase prices below $500k, we are often more expensive than our competition — and often, at this price point, the buyers either do not fully appreciate the value of our services or have the means to compensate us out of pocket.
Some (many?) consumers simply don’t care about the fee. This is perhaps the observation that surprises me most. More on it later.
And there are likely other reasons I haven’t considered.
What mystifies me, though, is that consumers rarely shop agents on proof of their competence or the differentiation of their business. Instead, standard practice is that they hire the agent who comes to mind first when they decide it’s time to make a move. That could be through the “Request a Tour” button on a portal, a co-worker referring the name of the agent they worked with, a sister-in-law who has a license, or the agent who is committed to relentlessly shaking their ass on Instagram so they perpetually stay at the top of their sphere’s feed.
NAR’s 2025 Profile of Home Buyers and Sellers puts numbers behind this: 80% of sellers contacted a grand total of one agent before hiring one (Exhibit 7-4, p. 98). Similarly, 74% of buyers interviewed exactly one agent before making their decision (Exhibit 4-8, p. 58).
The criteria consumers are using to determine a good agent? NAR’s chart here is quite telling:
An agent’s perceived reputation, honesty, and personal ties are the top three criteria — 72% of sellers named one of those three as the single most important factor in choosing who to hire. An agent’s commission ranks sixth, named most important by only 4% of sellers. It falls below whether the agent has a caring personality.
Two years after the NAR settlement’s practice changes took effect, and in a time where housing is historically unaffordable, one would expect that reducing transaction fees would be a bit higher on consumers’ priorities. That’s not the case.
Granted, anytime you’re looking at a chart like this, you should be mindful of the source — and NAR certainly has an agenda, which these numbers conveniently support. That’s not to discredit the data, but don’t accept it uncritically.
Nevertheless, what haunts me is how virtually none of these categories says anything about an agent’s ability to truly represent the best interests of the consumer. Which leads me to ask, is this because consumers don’t care about agents’ competence, or is it because competence is almost impossible to measure?
Seriously. How is a consumer supposed to test and evaluate an agent’s competence — even if they wanted to? What’s the box score? Nobody reports how many dollars an agent negotiated off a repair addendum, or how often they talked a client out of the wrong house, or protected a client from a bad offer. “Sold for $125k over list in 5 days with multiple offers” could be a sign of marketing brilliance or equally an indication that the agent severely misread the comps and demand for the property. How is a consumer to know — especially if the norm is to speak with only one agent before hiring representation?
A market can’t pay for what it can’t measure.
As a result, the real business of agency becomes winning a popularity contest. Reputation may be everything. But reputation for what, exactly? Often for magnanimity — grandiose client gifts, big parties and events, and charitable contributions to the community. All good things in their own right; but what do those have to do with skill in protecting and advocating for a client within a transaction?
How about trustworthiness and honesty — how is that measured? Likability, usually. We default to trusting those we like. But how many consumers really understand the mechanics of how their agent gets paid? Where’s the honesty in failing to fully explain that?
And how many clients would be surprised by what their agent discloses about their financial position on a private call with the other side, in service of getting the deal done? I’m not just speculating here. I have had agents volunteer their own client’s ceiling to me, unprompted, on a first phone call — information I could only use against the person they were hired to protect.
Their client will never know it happened. That’s the whole problem in a sentence. The behavior that most damages a client is precisely the behavior a client can’t observe.
No harm, no foul though.
Riiiight.
Candidly, this is where it’s easy for me to get really bummed out about this whole business and pretty pessimistic about my ability to effect any long-term change. And this is where the if you can’t beat ‘em, might as well join ‘em thinking creeps in.
Thinking upon the agents we’ve dealt with on a few of our most recent transactions, I cannot believe the negligence and incompetence that passes for agency. And these people are getting paid $17,000-$22,000+ to do the absolute bare minimum in terms of representation. But most of them have good reputations. They are likable people. They’ve been ‘doing this for years.’ And, in this industry, those credentials are all you need to succeed. Skill be damned.
It legitimately makes me sick.
And it’s doubly discouraging to spend so much time, effort, and care building something better, but for it to matter seemingly so little because, again, the vast majority of consumers aren’t shopping for agents based upon quality of service, proven competencies, or pricing models.
In other words, while I dog on the agents chasing TikTok virality, at least they’re optimizing for the actual way people today are choosing their agent: whoever is top of mind. Maybe I would be better off just shaking my ass.
But the world wouldn’t.
I realize that sounds melodramatic. It kind of is.
But, for real, if the real estate industry is about optimizing for attention, likes, and performative grand gestures, you can count me out. I’m just not interested. If competing on exceptional service at a fair price isn’t enough to ‘win’ in this industry, I’ll cut my losses and redirect my efforts elsewhere.
That said, I don’t believe it has to go that way.
There are Realtors who are genuine professionals. I know a number of them. They consistently deliver more value than they extract — their service outweighs their compensation, and they can tell you exactly where that line sits, because they’ve actually thought about it.
Sadly, there just aren’t many. I realize that’s bleak. And I’d like to say otherwise. But I’ve sat across enough closing tables now, and most of those agents who collect their $20,000+ commission checks would be hard-pressed to defend what they truly did to earn it.
The real professionals, however, rarely show up on the top-producer charts or get called onstage at Inman. Those stages measure volume, and volume measures attention. But they will be remembered by the families they served, and their legacy will be the bonds they built and the generational wealth they helped their communities create.
That’s the job worth doing. Whether there’s a market for it is a question I can’t answer yet. But I’d rather find out the hard way than take the easy money and stop asking.
One final question I still haven’t fully resolved:
What ought the box score for agent quality actually contain?
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Tiered & Flat Fee Real Estate Services in SW Washington: The Tartan Team
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Nick, respectfully, you're a bundle of contradictions in this post. Your branding and value proposition, as you've expressed them, are based on DIY, flat-fee, and consumer savings, but you want to be valued for the quality of service (which is frankly subjective to the consumer and unproven before the transaction). Whether the business model is profitable or sustainable concerns you, not the consumer. The consumer views our industry and its members as a monolith. In their minds. we all do the same things and provide the same services. You and I know that's untrue, but we explain those differences one-to-one, and marketing them is difficult. (Thoug if you do think we all do the same things, only differing in the quality of those things, we disagree, and you can feel free to ignore my previous statement) Having tried a number of business models in my career, including flat-fee alternatives and unbundling of services (which I found both unsustainable and unscalable - but that's a longer conversation), I found that some consumers shop by price, but they are not the majority, and once you position yourself as the cheaper alternative, any claims of quality are seen as suspect. There's a classic saying: "Fast, cheap, and good: choose any two." It's an uphill battle to challenge that kind of familiar wisdom. I'm not saying someone can't do it; I've just not seen anyone do it successfully at scale. I also see other things on your website that I think create stumbling blocks, but I would want to clarify them before commenting. I do think, however, that the biggest challenge to your business model is that you expect everyone to react to your offering because they see the real estate industry through your particular lens, and consumer response shows they don't.