WALTER HALL
Launched firm in 2004
A South Shore real estate executive with more than four decades of experience is hoping to capture the business of buyers and sellers who want to avoid hefty broker’s commissions.
Walter Hall is planning to roll out a franchise operation of a company he launched three years ago called HouseSavvy. The Norwell-based company offers sellers a menu of services with various fees. It also gives buyers a partial rebate on the selling broker’s commission.
“We call it ‘more choices with less cost,'” said Hall, describing his company’s philosophy.
Hall, his son Jonathan and partner J.T. Price started HouseSavvy to offer sellers and buyers an alternative to the services provided at traditional real estate firms, which typically charge a 5 percent to 6 percent commission.
“The traditional business model in real estate is just archaic and inefficient and needlessly expensive,” Hall said.
Most companies must charge a 5 percent commission because “they waste so much time on sellers that don’t sell and buyers that don’t buy,” explained Hall.
“You can make a good profit on a $4,500 fee versus a traditional commission if you manage your overhead costs,” said Hall, who estimated that HouseSavvy turned away about 30 percent of prospective sellers in the last three years because they weren’t serious about selling.
Hall wants to take the HouseSavvy approach national through a franchise offering. He is hosting a seminar on April 25 at the Sheraton Braintree to introduce the franchise program in southeastern Massachusetts.
The HouseSavvy concept isn’t entirely new.
Walter Molony, a spokesman for the National Association of Realtors, said discount brokerage firms emerged in the early 1990s, and about a year or two ago the industry started hearing more about companies offering various service options to consumers.
Still, the majority of consumers are opting to use the services of a traditional full-service, full-commission real estate firm. More than 80 percent of consumers who bought or sold a home from July 2005 to June 2006 used a full-service real estate firm, according to a NAR survey. Only 9 percent used a company offering limited services – such as a discount, flat-fee or fee-for-service firm – and 8 percent chose a firm that only listed the property.
At HouseSavvy, sellers can select from a list of service options. For a flat fee of $4,500, which includes a $500 nonrefundable retainer fee, sellers can get all the services they would find at a traditional full-service firm.
Homeowners who prefer to handle most of the negotiations and interactions with potential buyers, inspectors and others – but also would like some advice and coaching throughout the process – can pay a $2,500 fee.
Sellers who handle the transaction and process on their own but want HouseSavvy’s marketing materials and their property listed on a multiple listing service are billed $900.
But HouseSavvy sellers who don’t want to pay a fixed fee can opt to pay a discounted commission – 1 percent to 1.5 percent depending on the level of service.
“It’s really looking at the selling homeowner and ‘saying one size doesn’t fit all’ – [unlike] a traditional real estate firm’s approach,” he said. “Some [sellers] like to get involved in the process. Others like to do it themselves. The majority go with us on full service.”
On the other side, home purchasers who sign an exclusive buyer’s agreement with HouseSavvy can receive up to a 30 percent rebate on the selling broker’s commission. Hall said the rebate is based on the number of homes HouseSavvy shows a buyer. If a buyer previews five or fewer homes before purchasing, he or she can receive the maximum 30 percent rebate.
“The more houses we show, the less cash they get back,” he said.
‘An Edge Up’
In addition, homebuyers and sellers who obtain a mortgage through HouseSavvy Mortgage Services can receive a rebate of $150 per $100,000 worth of mortgage loan.
Such consumer rebates have drawn the attention of federal and local regulators in recent years.
Eight states currently prohibit the practice of sharing a commission, or rebates, with a buyer or seller, according to a study commissioned by the Worldwide Employee Relocation Council (ERC). Massachusetts, along with several other states, allows fee sharing but it must be disclosed.
Lawmakers in New Jersey and Oregon – two of the states that prohibit rebates – recently introduced legislation to allow the practice, according to Sandy Taraszki, executive director of the Worldwide ERC Coalition. In Missouri, which also bans rebates, lawmakers have proposed a bill that would allow the sharing of a commission with consumers but any money would have to go directly into an educational savings fund.
And just last year, regulators in West Virginia and Tennessee lifted bans on rebates after the U.S. Department of Justice said such practices can inhibit competition and may be a violation of federal antitrust laws.
The practice of providing rebates is “viewed as a way of negotiating the commission,” explained Taraszki.
“We believe that it’s a market-driven decision and consumer programs should be available so we support the allowing of the sharing of commissions,” she said.
Hall believes that there will be a “groundswell of consumer resentment” in states that ban rebates and that those states eventually will allow the practice.
For now, Hall is hoping that his reputation and real estate experience will draw business leaders and brokers to his franchise.
“I think that what really differentiates us is that we have real estate and network experience that none of the others have,” he said. “It gives us an edge up.”
Hall started his own real estate business on the South Shore in 1960. By 1968, he expanded his business to create The Hall Institute of Real Estate, which handled agent and management training for some of the country’s largest real estate firms, as well as nearly two dozen Realtor associations.
In 1978, Hall established Relocation Resources International, a global corporate employee relocation service that served clients like Verizon, Boeing and Pfizer. He ran the company for 25 years until it was sold four years ago to Weichert Realtors.
But Hall wasn’t ready to retire. Hall, along with Jonathan and Price – both of whom were executives at Relocation Resources – started HouseSavvy.
“HouseSavvy is really a service that is a culmination of all my experience,” Hall said.
He added that he believes his franchise will be a success.
“There’s no doubt that the industry is heading to quality service at a reasonable cost,” he said.
