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Showpal’s free plan now available nationally

ShowPal, an online platform that allows homeowners to conduct the sales process without a real estate agent, has launched its free plan nationwide.

Founded in Iowa in May 2018, ShowPal plans national expansion over the next year.

“Everything we’ve built has always been intended at the national scale,” said Chad Tortenson, founder of Showpal. “But we wanted to make sure our product was solid before we did that. So we moved it nationally a few weeks ago.”

Since Clay & Milk last covered Showpal it has simplified its product, updated several of its software features and now offers three different for-sale-by-owner plans—a free plan, an essential plan for $499, and a full-service brokerage plan for $2,999.

Tortenson told Clay & Milk he plans to expand Showpal’s two other plans to nation-wide as well.

“The essential plan, which is the $499 plan, will be national by the end of February,” said Tortenson. “The brokerage plan, we’ll probably have to take state-by-state, as we find brokerage partners or form brokerships ourselves.”

Tortenson says his goal is for Showpal to hold two percent of the national listing five years from now.

“About 20% of people put their home up for sale without hiring a listing agent. So there’s a 20% market for a company like Showpal if you can develop a sophisticated product. That’s a market we’re going to go after and try to aggregate and coalesce nationally.”

Previous coverage

ShowPal is using technology to change the real estate industry -Dec. 13, 2018

1 Comment

  • Chad Torstenson
    Posted January 29, 2020 at 9:28 am One of the most important things we do at ShowPa is educate homesellers about their options when selling a home. There is independent research on FSBO vs. a real estate agent that may surprise consumers.

    “In coming years, the majority of traditional real estate companies will die.”
    – Peter Flint, Founder of Trulia

    The NAR boasts that the typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales. However, multiple independent researchers have accurately pointed out that this study is based on flawed data and a limited sample set as the NAR did not include mobile home sales or distressed homes in their data set. These homes are seldom sold by real estate agents and thus unfairly reveal a lower sales price for FSBO when compared to homes sold by agents.

    To address the claim that real estate agents sell homes for more than FSBO homeowners, researchers at Northwestern University in Chicago evaluated home sales in Madison, Wisconsin. They compared single-family homes sold FSBO and those sold by real estate agents. They corrected for differences in the location, square footage, and other factors between the homes. They were able to compare the prices of FSBO and non-FSBO sales of similar homes in similar neighborhoods. They had 15,606 home sales in their multi-year dataset. The dataset in the NAR study had less than 7,866 observations to cover the entire United States and for all types of homes.

    The Wisconsin study found a 0% price difference between homes sold directly from sellers to buyers without real estate agents (FSBOs) when compared to homes sold with the help of real estate agents. A similar study performed by B. Douglas Bernheim & Jonathan Meer as published by the National Bureau of Economic Research found “no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices.”

    Another study performed at Stanford University questioned the value of brokerage and agent services. The study evaluated the effect of a seller’s decision to use a broker on list prices, selling prices, and speed of sale for a real estate market. “The central finding is that when listings are not tied to brokerage services, a seller’s use of a broker reduces the selling price of the typical home by 5.9% to 7.7%, which indicates that agency costs exceed the advantages of brokers’ knowledge and expertise by a wide margin.”

    The Stanford University study highlights the principal-agent problem that exists in real estate. Real estate agents are incentivized to push the seller towards an accelerated sale so they can be paid their commissions. Adding further financial insult, the study concluded that not only was the selling price lower on broker/agent-assisted home sales, but the seller also had to pay related commission costs, further eroding the net proceeds from the sale.

    The principal agent problem identified in the Stanford study calls into question whether real estate agents represent the best interest of their clients. The study discussed in the book Freakonomics was performed at the University of Chicago and found that homes owned by real estate agents sell for about 3.7 percent more than other houses and stay on the market about 9.5 days longer, even after controlling for a wide range of housing characteristics. This study concluded that real estate agents use their expertise to maximize a personal financial return but often do not use this expertise to maximize a financial return for their clients.

    After consumers read this research Showpal conducted a survey. The results are profound.

Comments are closed.

Showpal's free plan now available nationally | Clay & Milk
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