Discount Broker goes Broke

Help-U-Sell, a big franchiser of a discount brokerage model, has filed for bankruptcy protection.  Inman reports on it here.

It really doesn’t surprise me that a discounter is having troubles at this time…in a tougher market for sellers, which we’re experiencing here in Seattle for the first time in nearly 15 years, a seller wants to be sure they’re doing all they can to move their homes.  Help-U is a specific, very low priced option.  I wouldn’t put Redfin, for example, or Sutton Real Estate, which offers a similar lower priced option to its sellers, in that same basket.  I think they provide a service that’s somewhere between nothing and “full,” and their pricing is in that range as well.

A counter argument for a discounter’s success might be that in tough times, with declining prices,  a seller needs to preserve as much equity as possible.  I don’t buy that.  I think the demise of Help-U-Sell, and I’m sure soon-to-be other similar models, shows that most sellers recognize or at lease perceive that they’re getting what they pay for when they enlist an experienced, conventional (for lack of a better word) broker.  That way, even if the house doesn’t sell, they won’t feel like they didn’t do everything they could to fully market their property.

Like it or not, the current brokerage system works pretty well to sell property for its market value, with relative transparency to all parties.

Leave a Reply