Bid My Listing, co-founded by Matt Proman, CEO of the site, and Josh Altman, a high-end real estate agent in Los Angeles who appears on Bravo TV’s “Million Dollar Listing,” came about because of Proman’s personal experience selling a home.
“Two years ago, I chose an agent to sell my home and signed a six-month listing agreement,” Proman says. “That agent didn’t do anything to sell my home, and three other houses in my neighborhood sold while I was stuck with that agent. My idea was to develop a new way for homeowners to find a listing agent.”
Proman says that the top 10 percent of agents get 90 percent of listings and that homeowners often choose agents with name recognition.
“An agent that’s relatively new to the business or less well-known might be the right person to sell your house because they know buyers looking in that area or know the area really well,” Proman says. “By asking agents to bid on your listing, you know you’re getting an agent who is really motivated to get your house sold quickly because they’ve paid you for the privilege of listing your home.”
Homeowners interested in having agents bid on their listing can enter information on the site about their property. Real estate agents in their area bid on listings they would like to represent, including a bid of what they would pay to the buyers immediately for the listing, a suggested price for the house, their commission and listing terms such as how long the listing agreement would be in place. For example, Proman said, a homeowner with a $400,000 listing might get several thousand dollars in cash up front.
“Sellers get some cash at the beginning of the transaction, and they know that the agents have some skin in the game to get the house sold,” Proman says. “If the house doesn’t sell, the agent loses that cash and doesn’t get any commission from a sale. Agents are likely to work harder to make that cash outlay worthwhile.”
Proman says agents will benefit from the system because they can pay directly for listings rather than pay for leads and advertise themselves without getting any listings.
“Sellers should be careful to choose an agent they’re comfortable with and have confidence will sell their house, not just the highest bidder,” Proman says. “Once they choose an agent, the agent has 72 hours to tour the house, meet the owners, deposit the money in the homeowner’s account and sign a listing agreement.”
Proman says sellers and agents can negotiate the terms of the agreement through the site, such as the size of the initial cash, commission and contract length. Bid My Listing earns money by charging agents 15 percent of the bid amount as a processing fee.
The site will always be free to consumers and free at first for agents. After their first successful transaction through the site, agents will be charged $99 per month to continue to use the site. Initially, the service is available only in Southern California, but Proman anticipates the site will be operating nationwide within about three months. Since the site only launched in mid-March, there’s no data available to demonstrate whether this model will be embraced by a wide range of homeowners and agents.