BACKING OFF THAT EXCLUSIVE Metro’s new board voted today to revise the notable exclusive 3-year contract the previous regime had signed last December with real-estate consultants McDade Smith Gould Johnson Mason + Co. The arrangement would have awarded the commercial brokerage firm up to $6.25 million in commissions on land transactions related to the construction of 5 new light-rail lines, as well as additional consulting fees. At the time of the signing, 2 of the 7 employees in Metro’s real-estate division were McDade Smith brokers. Michael Reed reports: “The new agreement with McDade Smith will be for one year and will utilize the firm only for selected properties that require their professional expertise. More work will also be done within Metro, it was indicated.” Update, 6 pm: More details on the new contract in this later story from Reed. [River Oaks Examiner; previously on Swamplot]
THE METRO LAND COMMISSION DEAL Real estate brokerage firm McDade Smith Gould Johnston Mason + Co. is slated to earn as much as $7 million in consulting fees and commissions from land transactions related to the construction of 5 new rail lines, the West University Examiner‘s Michael Reed reports. Last year’s hiring of Kristen M. McDade as associate vice president of real estate services means 2 out of Metro’s 7 real estate division employees are also McDade Smith brokers. The 3-year deal approved by the outgoing Metro board last December outlines that payments are to be made “even though the land to be used has already been predetermined by the route and could be taken through eminent domain, if need be,” Reed explains: “As stated in the contract, ‘Consultant (McDade Smith) shall receive commissions on every transaction closed by Metro, including but not limited to all right of way acquisitions, calculated on the basis of 6 percent of the “sales price.”’
Metro, however, receives a credit of rebate equal to 40 percent of that payment, according to the contract.
Since, legally, a buyer — in this case, Metro — cannot force a seller to pay commissions to a broker, Metro’s true price for land acquisition for five lines, including the University route, would likely be bumped up by $6.25 million in buyer paid commissions as well.” [West University Examiner]
If you’re trying to sell your home without an agent, how do you get your listing onto MLS? Sure, there’s Craigslist and an assortment of FSBO online catalogs you can get on easily, but most Houston homebuyers do their searching exclusively in the difficult-to-navigate MLS listings at HAR.com. If you’re not with an agent, how do you get buyers to find you online?
As of today, a whopping five Houston homesellers have discovered a secret way to sneak into MLS—by using a new free service out of Florida called Iggys House. The five listings show up when you search the Iggys House site for Houston properties. More important, though, they also show up in HAR searches. Pay no attention to the weird Florida broker listing above the property. They’re in.
What’s in it for Iggy? In Texas, nothing yet—but just wait. In five other states, a sister company called BuySide Realty serves as an agent that passes onto the buyer 75 percent of the commissions it receives. Presumably, if a buyer buys a $400,000 house using BuySide, and the seller is paying a six-percent commission (with $12K to each agent), the buyer will end up with a new house and an extra $9,000. It appears to work for 1031 exchanges, too.
The free listings, then, are just a way of trolling for potential BuySide buyers. And it means that BuySide may be operating in Texas soon.