The word is traveling fast about Two4One Real Estate, as evidenced by a prominent, front page feature story on Inman.com. Inman News (http://www.inman.com/) is the nation's leading independent real estate news service and content provider to 250+ U.S. newspapers and 50,000 Web sites, reaching millions of consumers each day through clients and partners such as The Los Angeles Times, Miami Herald, Washington Post, Denver Post, San Francisco Chronicle, Chicago Tribune, Yahoo!, Microsoft, Google, The Wall Street Journal Online, CBS Market watch, and many more.
“We’ve known that our business model was unique and that we were setting the new trend in the real estate industry,” states Dan Pool, co-founder with wife and fellow owner Kelly Pool. “But to see our news story picked up the first day by the industry’s top web site was just added confirmation.”
The story made ample use of both customer and franchise testimonials. One couple they quoted, Joe and Nickole Hayward, stated they received a check for $5,000 after they purchased their next home in Tucson, Ariz. They were so pleased they used Two4One when both selling and buying their homes. The story quotes Joe Hayward stating, “We’d be out $5,000 had we not gone through (this company).”
Another happy homeowner mentioned in the article, learned about the company through a direct mail piece. “I was kind of skeptical but I tried it – it was for real,” Tom Wedic asserted. He also received a commission refund of $5,000 when he closed on the purchase of his new home. “I would definitely do it again.” According to the Inman story, Wedic was impressed with owner Dan Pool’s negotiations in the purchase transaction. Wedic now refers others to the company.
“People love to come away from a closing with a few extra thousand dollars in hand. It makes the whole process a lot more fun!”
These savings, coupled with the business model behind them, are generating both the news coverage and consumer praise. In a typical real estate transaction, the seller pays a listing fee of 5% to 7% of the sale price. The listing (seller’s) agent then splits that commission with the buyer’s agent. Two4One charges a 6% listing fee, and also pays the buyer’s agent half the fee. However, this is where things change. When the home seller purchases their new residence, Two4One refunds the other half of the original listing commission. Two4One then makes its commission on the purchase of the new home, and simply refunds the listing commission on the home it sold.
“Giving money back, once an agent has already done the work, and made the sale, that’s what’s making news,” states Kelly Pool with a twinkle in her eye. “People love to come away from a closing with a few extra thousand dollars in hand. It makes the whole process a lot more fun!”
The irony behind this new business model is that it began based on a sense of charity, not greed. According to the article, Dan Pool had a client at a local U.S. Air Force base, who was selling his house to move into a larger one. But the client couldn’t afford to pay the listing commission and still afford the larger home. Dan went to his wife with the issue explaining that “Our listing commission is standing in the way of this deal happening.” Kelly, with typical intuition, simply made the suggestion that put in motion a new type of real estate franchise. “Why don’t we just waive the listing commission,” she asked, “sell this one for free, and on the next home we’ll get our money there.” Several similar deals were structured before the idea eventually took form as a new company and a new franchise.
The article continues, explaining the franchise fees, which are currently set at $9,500 and due to increase soon to $15,000. The franchises are awarded based on a service area with a population of approximately 100,000 people.
“Even though our business model is the retail equivalent of a ‘Buy One Get One free’ offer, we are still a full service agency,” states Dan Pool. “We provide 100% of the services offered at traditional, full price real estate firms”. Asked if other agents objected to his program; Pool states. “One of the things we did with our system – we never wanted to slight the buyer’s agent. Our listings are always at 3% (for the buyer’s agent commission)”. Since the other agent gets their full share, yet the homeowner saves on the listing commission, it’s a win/win that has more and more customers talking.
Asked if he was worried about copycat companies, the article quotes a bit of advice Dan received from Phil Davis, a marketing consultant at Pure Tungsten (http://www.puretungsten.com/) “Do you think that McDonald’s is concerned about somebody cooking burgers across the street from them?”
The Two4One concept is designed to run with a small team that garners business by word of mouth and by naturally gaining a greater share of the listings. “We spend very little in advertising,” states Pool. “You don’t have to when you sell for free!” The opportunity he sees is cutting out all the expensive overhead that traditional full fee agencies have to pay each month. “We’re in the internet age and agents can make the same amount of money, if not more, by leveraging efficient new technology vs. building expensive new offices.”
The article finishes by detailing Two4Ones immediate growth plans into Phoenix and California. “This is a concept whose time has come, and this franchise bears its name.” For both Kelly and Dan, Two4One is more a mission than just a business. And from all the news it’s generating, the mission is well under way.
