For every lead from HomeLight an agent agrees to pay 25% of their commission to them. For the consumer it is disproportionate to the value received. On average that is about .625% – 1.25% of the price of the property. For a $500,000 home that is $3,125 to $6,250. A big chunk of change for a few clicks. For you the consumer, this might not be a good deal because you pay for it. HomeLight does not have a magical formula to help you pick the best agent. HomeLight simply tracks historical sales information and ranks agents by volume. Of those, they present you with agents that have signed up for the HomeLight lead program. Not necessarily the best agent overall, but the best of those that signed up and agreed to pay their price. This limits the set of whom you can choose from to only those that sign up with them. It’s good they present the experience level of agents for you to choose. In essence, that’s the value proposition of their business model to the consumer. Dump expensive middlemen and go direct. Everyone knows you can get a better deal if you go around the middleman. There is a very simple way to find good agents by following the steps below. By taking an extra step you can improve your chance of success. Here are steps you can use to evaluate an agent and go direct. 1. Find out how experienced an agent is. Go to https://www.realtor.com/realestateagents and input your city, state, or Zip. Here you will see a list of all active agents. Not just those whom chose HomeLight. It shows years of experience, number of active and sold listings, recommendations, and a direct phone number. It is a no obligation, no cost phone call to evaluate experience and talk to the agent. 2. Ask to see the agents Inventory and production report produced by their MLS. This is a report produced by the MLS that shows all the current and historical buying and selling history for an agent including all properties, average selling price, days on market, sold price to list price ratios. 3. Check an agents license and disciplinary actions at https://www.trec.texas.gov/ . This is the regulatory body that licenses all agents in Texas and governs activities. Here you can see education history, sponsoring broker, how to file a complaint, frequently asked questions, and other valuable information. 4. Ask to speak to past clients. You want to know how responsive the agent is. Gauge their knowledge of the market, contracts, lender behavior, pricing strategy, appraisal standards, marketing, buyer behavior, and technical knowledge. 5. Make sure your agent has the right tools for the job. They should offer you an automated showing service (ShowingTime), electronic signature (DocuSign), email, text, and direct phone access, automated contracts and forms (Zipform), automated email notification, automated agent feedback (ShowingTime). 6. Make sure your agent can explain the listing and buying process, market trends overall and seasonal, what a market analysis tells us, about the mechanics of representation, presentation of offers, contract execution, contract terms, obligations, timings, and cost to you. Have them explain how they handle other agents and how agents, buyers, and sellers think and view the process and market. 7. Then, pick the one that meets your needs and a track record to deliver. More about digital lead generation… Digital marketing is the marketing of products and services mainly on the Internet. It began its development in the late 1990’s and has had a profound impact on traditional business models. The most well known direct digital marketing effort is Amazon.com. Amazon has expanded markets, offers direct fulfillment, and and has an end to end brand, design, and competitive delivery mechanism with obvious convenience, value and reach. I believe consumers are very confused about digital lead generation systems versus digital marketing. Unlike Amazon.com, lead generation platforms are often not a collaboration between suppliers and middlemen to provide a better overall product. Those of HomeLight, Zillow, Apartments.com, Yelp, Angies list, HomeAdvisor, Hotels.com, and the vast array of others are independent stand alone entities and very loosely integrated within the supply chain. They are often venture capital backed, forced their way into the supply chain, attempting to control a market space by taking big upfront losses to control market share. Many lead generation offerings are not competitive, hide the true cost to you, and delivery is not guaranteed, nor in their control. They are disruptors of traditional small business models and do not expand their markets like that of Uber, Lyft, and Airbnb. They disrupt by dominating a web channel with expensive digital and off web advertising to capture and sell leads to providers in their market segment. Ultimately, to dominate the channel and hold true suppliers hostage. Some lead generation systems simply add expense to providers without adding value. Selling leads at an exorbitant price without contributing to the value and quality of products and services and adding to the overall cost in the long run. When making big purchases, you know going direct can get you a better price and preferential treatment. Don’t make yourself a less valuable client. Unfortunately, paying 25% is a big chunk of commission and you become a less valuable client. Think of HomeLight as a credit card with a 25% bank fee. Not the 1% slice you might be familiar with and willing to pay for the convenience and automation. Agent resources are limited. Residential real estate is a seasonal business and agents are very busy in the spring and summer servicing clients. When push comes to shove, the more profitable clients get the most attention and with HomeLight, you might not become one of them. As licensed professionals, we have a duty to treat you fairly and put your needs ahead of ours. That does not say we are obligated to serve your needs with the same level of enthusiasm and speed. In any business, the most profitable clients get the most attention. That should be enough said.