- Lane Hornung’s monthly Q&A.
- Hornung recently was on a national NAR panel.
- Hornung deals with fixing a broken real estate system.
“Real estate is broken and we are fixing it.”
That is the message that Lane Hornung delivered to an overflow audience attending the recent National Association of Realtors convention in San Francisco.
Hornung, CEO and co-founder of 8z Real Estate, was a member of the Next Gen Brokerage: Creating a Remarkable Company panel, which drew 400-plus people to a ballroom in the Moscone Center.
He was joined by Vanessa Bergmark, of Oakland-based Red Oak Realty; Tiffany Combs, of San Francisco-based Climb Real Estate; and Jeff Martel, of Boise-based Better Homes and Gardens Real Estate. The panel was moderated by Sherry Cris, president and CEO of Better Homes and Gardens.
Lane spoke with John Rebchook, of InsideRealEstateNews.com, regarding the panel.
John: Lane, how would you describe the theme of the panel?
Lane: The organizers selected four brokerages that they consider progressive companies that are changing how brokerages operate.
They were looking for companies that are raising the standards in the industry and trying to fix what is wrong in real estate for both the consumer and for the agents.
John: What commonalities did you find among the four brokerages?
Lane: The No. 1 factor is having agents who are highly productive.
At 8z for example, our brokers sell nearly four times the national average. The national average is 7 sales per year and 8z agents are on track to average 25 closes per agent this year.
John: Why should the consumer care?
Lane: Would you want a doctor who performs only three or four surgeries per year operating on you?
Of course not. Similarly, you are much better off having a professional who is selling 26 homes than a hobbyist selling three or four.
John: What were some of the other common threads?
Lane: There was a real commitment to the community and market specialization. It is important to have an agent that really knows and understands a specific geographic market.
We all invest heavily in using the Internet, mobile and new technologies for the benefit of the consumer and the agent.
We’re also very transparent. At 8z, for example, we want to be information sharers, not information hoarders.
John: What about cutting commissions?
Lane: There are real estate companies out there – some new, others have been around for a long time – that are all about cutting commissions.
I have nothing against that. With any market for a service or product, there are low cost companies that compete primarily on price.
John: It sounds like you don’t think simply cutting commissions is the Holy Grail of real estate.
Lane: I think what consumers want is more value. Some brokerages are saying the answer is to cut the commissions and that is all.
Just cutting commissions doesn’t fix anything. You don’t want to have a semi-proficient agent with limited expertise providing you with limited service on one of the biggest financial decisions of your life.
John: With today’s tight supply and strong demand, aren’t homes practically selling themselves, so you might as well shop a broker by price?
Lane: It’s natural to think that, but I think the opposite is true. In a tight market there can be huge swings in prices. It’s not just about selling the house, it’s about maximizing the price.
A good agent can get you a much higher price, which can easily be much larger than any savings on commission.
At the end of the day, aka at closing time, the seller’s net is what matters. The commission is just one component of the net equation and certainly not as important as the final sales price.
John: Is it possible to pay a full commission and not get the best price for your home?
Lane: Unfortunately for the consumer, it certainly is. You can end up paying “full freight” and not get the commensurate value. That is the worst place to be and that is one of the things that is broken in real estate and we at 8z and others are looking to fix. In fact, it’s part of our 8z Manifesto.
John: Thanks, Lane.
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.