There is a temptation that lures many real estate agents, a
temptation that has been compounded in this era of soaring home prices:
the chance to double a commission by representing both the buyer and the
seller in a real estate transaction.
"When you have that temptation to make twice as much money, sometimes
it gets the best of you," said Paul Yalnezian, president of Right Home,
a full-service realty firm based in Glendale. "In the last few
years, with the frenzy in real estate, more and more agents and brokers
are pushing the envelope of ethics in order to increase profits, and,
unfortunately, it comes at the expense of home sellers."
Yalnezian, who started his mortgage firm in 1992 and expanded to real
estate in 1998, wanted to eliminate this potential conflict of interest
in real estate. His company did so by not charging a commission when its
agents find a buyer for sellers they are also representing. In fact,
none of Right Home's agents get paid by commission. Instead, they are
salaried employees who receive bonuses based on the amount of sales they
close.
Since Right Home won't charge home sellers an extra commission when
its own agents find them a buyer, the company's agents end up
representing both the buyer and seller in a transaction about 75% of the
time, Yalnezian said. If the buyer ends up being represented by an agent
from another brokerage firm, then Right Home's sellers must pay an added
commission to that agent, resulting in a commission rate higher than
Right Home's 2%.
"Our commissions are as low as 2% total, and they get full service
and more advertising and marketing than anyone," Yalnezian said, adding
that the norm for commissions in the industry is between 5% and 6%. "So,
as a result, our sellers save at least 3% in commission, which they can
either keep to themselves, use to improve their property or use in the
negotiating process with the buyer."
The company's approach, which also includes unconventional marketing
though weekly TV shows in Armenian and English, has even drawn some real
estate agents who have sold their own homes through Right Home, rather
than handle the transaction themselves, Yalnezian said.
"Our offer is too good to be true, and people often don't believe
it," he said. "Because we make so little, I've never come across a
situation where the commission breaks the deal. A good friend and real
estate agent told me that she loves me dearly, but hates what my company
is doing."
Arman Balakhchyan, an independent real estate broker, recently sold
his North Hollywood home through Right Home.
"I was able to go on and take care of my own deals and let them take
care of my sale," Balakhchyan said.
"I'm pretty pleased with the service I received. They were on top of
things, and that gave me peace of mind."
After listing his Burbank home for $1.6 million with a national
brokerage firm and getting little response, Sako Semizyan went with
Right Home. He was able to sell the property quickly for close to the
list price.
"I was very impressed with the low commission, and Paul happened to
bring the most customers to my home," said Semizyan, who learned about
the company through its TV program.
"I had it listed with another agent but they really didn't do much,
and the commission was much higher. People have no reason to go with
anybody else. For the commission, they give you a lot more knowledge and
a lot more service."
That service includes a special plan for senior home sellers, which
includes the services of a financial planner, certified public
accountant and consultation with a real estate attorney. While it ends
up costing more than the company's trademark 2% commission, it is worth
it for many sellers, Wells said.
"I am a senior citizen myself, and I saw it when my mother bought
property after my father died, not understanding the complexities of
real estate law," said Wells, who does not charge for the advice he
gives to Right Home's senior customers. Even non-seniors get two hours
of free consultation.
"I am not there to sell or to make a deal," Wells said.
"I give them information and end up being a teacher, a hand-holder,
and they realize after a while that there is no such thing as a dumb
question, except for the ones they don't ask."
For more information on Right Home, visit the company's website at
www.righthome.com, call (818) 240-7840 or watch their weekly program
Sundays at 10:30 a.m. on KSCI Channel 18.
