Alex Doubet of DOOR, a flat-fee brokerage.

We all know Alex Doubet, his flat-fee brokerage Door, which is home-grown, founded and it turns out funded right here in Dallas/Park Cities. We know the story of how he founded the company right out of Harvard, because he thought his mom had paid too much to the agent when she listed and sold her own Park Cities home.

(Real estate brokers get paid thusly: the broker on each side of the deal takes, on average, three percent of the selling price of the home, which is split 50/50 broker/agent. So, if a house sells for $500,000, the seller and buyer’s broker(s) collectively take $30,000 off the table for themselves. But the 3% commission rate is almost always negotiated, especially in higher priced properties, as is the agents’ split. The Door way would be a $10,000 commission on this deal.)

Alex, like many Millennials, likes to think of himself as a disruptor. And he has done a terrific job of promoting himself to date, with billboard ads, even appearing on stage at Inman Real Estate Connect in NYC, which is a pay-to-play gig but hey, you get what you pay for. He listed a challenging neighbor’s home that did not sell, but they were very pleased with the service.

There is nothing new to his flat-fee brokerage model, that has been tried and, in some cases, proven successful at certain price ranges. It may even be successful at “uncertain” price ranges, too, as home prices contract.

But what is watchable about DOOR is that he is getting people to write checks to expand the company.

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Editor’s Note: Jon and Candy are in Denver, at NAREE, and they are hearing a LOT about Instant Offer, Open Door, and other institutional iBuyer platforms. Homevestors, for example, told them they won’t sell a house to someone who has not physically seen it. Full deets next week!

By Alex Doubet
CEO and Founder of DOOR

Alex Doubet

There is a cottage industry in the world of real state agents of generating an uproar over the continued march of innovation. This cottage industry complains about innovation in general, and the effects of the internet on the brokerage space, specifically. The recent announcement of Zillow Instant Offers (ZIO) moved that cottage industry into full-tilt hysteria.

ZIO is nothing more than a slightly different iteration of the business model pioneered by home buying companies such as HomeVestors (of “We Buy Ugly Houses” fame). Opendoor is another recent entry into that same space.

Zillow recently rolled out ZIO as a product to connect homeowners on their web portal with investors. Real estate agents immediately screamed about Zillow “bypassing agents” and “taking our data and profiting on it.”

First things first, listing data does not belong to agents.

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The Real Estate business is headed for extreme change in the way we buy, sell and market real estate, and in how we compensate agents.

Last week, we talked about Alex Doubet of Door, a Highland Park and Harvard lad-grad who has started a technology-based flat fee discount brokerage. I applaud and wish him well, and plan to follow him like a hawk. I just found it amusing that the local print media reacted to his story as if he were the very first to ever attempt this! This industry is in more flux than the automobile.

And we have written here about Opendoor. Opendoor is the boldly fascinating Silicon Valley startup heavily funded by some big Bay area checkbooks. The company uses technology to buy and flip homes and streamline the agent’s role. In fact, Opendoor employs salaried listing agents to market its properties, and forks over a 3 percent commission to buyer’s agents who come through the MLS should they bring a buyer. The company has garnered roughly $110 million from investors, including its biggest shareholder, venture capital giant Khosla Ventures. Their ads are all over the Metroplex, aimed at consumers.

Now comes word via TechCrunch that Opendoor is getting even more brazen: it will now offers buyers a buy-back guarantee and a 30 day refund policy.

Yes, you have 30 days to return a house. This is better than Nordstroms:

Starting today, it’s making two more bold promises. First, it will buy back a home if the new owner is unhappy with it. Specifically, if someone changes his or her mind for any reason, that person has 30 days to receive a full refund. More, Opendoor will provide each new buyer with a 180-point inspection report on the condition of their new home; if anything breaks in the first two years, it will fix it.

“We stand behind our homes,” says Eric Wu, CEO and co-founder of Opendoor. “Unlike a typical seller who is trying to hide information from [the seller], we’re fully transparent because we want our customers to be happy.”

(A typical seller trying to hide information from the seller? This sounds like a 2-year Home Warranty policy. Hold that thought.) (more…)

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I have to say, I think I am going to really like Alex Doubet, chief executive officer of the real estate company Door. First of all, soft spot for Ivy Leaguers, and Doubet went to Harvard. Secondly, he said this to the Dallas Morning News:

“When you see all the nicely printed collateral from the brokers around town, the pictures and the big-hair poses, that’s all nice, but it doesn’t do anything to sell your house,” Doubet says. “It’s somewhat akin to saying, ‘I’m going to sell your house by running an ad during the Super Bowl.’ You want to get in front of people who are actually going to buy your house, not just spray and pray everywhere.”

Spray and pray! Those big-hair ads are branding ads, but I have said for years the best things agents can do is get the HOUSE out in front of buyers, not their big hair and designer clothes. Those glossy ads are expensive — fun, an ego trip, especially when someone does your make-up or you arrive at the photo shoot in a limo with champagne bucket– but what does it really do to sell the home?

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By now you have called in to refill your Xanex Rx after learning that Zillow is not only democratizing the home buying process, it’s turning it into an Amazon-like experience. We knew this was coming.

The online real estate disruptor announced this week a pilot program for buying and selling homes online called “Zillow Instant Offers.”

The way it’s working now: if the seller chooses to use the “Instant Offer” program, they will also receive a comparative market analysis from a local real estate agent, free of charge. That can help them decide if they want to proceed with the sale, and it might even lead to a lead for the providing agent.

One might ask, why not use a “Zestimate”? I mean, Zestimates drive us all crazy, though I think, I hope, by now homeowners know it’s really a starting point, nowhere near the actual value. Last year Zillow announced they had significantly improved the accuracy of the Zestimate tool, and after all, they said, home is worth only what someone is willing to actually pay for it. I believe there are nuances in that phrase: interest in real estate spurs more looking, which in turn spurs more buying. But keep repeating the fake message enough and it becomes the truth!

Jon tells us Zillow is getting sued in Illinois over those Zestimates.

So it’s interesting that at this critical juncture, Zillow is looking to boots on the ground agents with knowledge of the market to back up their AVM. Maybe this is the mousetrap… (more…)

open house roundup dallas

The jewel of the block at 4715 Swiss Ave. is a thing of beauty, and it’s one of our five featured open houses this week.

Each weekend, there are dozens of open houses around Dallas—figuring out the best ones can take hours. That’s where the CandysDirt Open Houses of the Week column comes in! We do the work for you and every Thursday, pick five fabulous open houses in Dallas (and the ‘burbs from time to time) you shouldn’t miss.

This week, our houses range in price from from $299K to $1.635 million. Let us know what you think of our choices, and if you know of any we should feature next week!

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