The actual start date of EZdigs was April of 06 when I founded the company out of my garage. We “upgraded” the ownership structure to an LLC a few months later. The early going was tough but I had dogged perseverance and a clear idea of what I wanted to do – reduce the cost of buying or selling a home by drastically reducing the commissions paid at closing.

I have always been an advocate for affordable housing options. In fact I wrote an article about it way back in October of 1996 when I was working for my Great Grandfather’s company, Iverson Construction. I was managing a 30 unit section 8 HUD certified apartment building for senior citizens that my Grandfather had built in 1980. He did it because he cared about affordability and wanted to do something positive for the community. In my capacity as Building Manager, I worked directly with the tenants on an ongoing basis certifying them as they came in and re-certifying them annually. It is this experience that created the foundation for my beliefs about the need for affordable housing. These beliefs stuck with me as I moved through the real estate and lending industries.

Since the late 1800’s our family businesses have involved homebuilding, banking and the buying and selling of real estate contracts. During those years we were involved in lending and I was also a Loan Officer for another family business, Foss & Associates, Inc. At Foss I learned about the lending and note buying side of things from my uncles, Skip and Eric Foss. I learned a few other things from these two whose reputations precede them but those are stories for another day. It was here that I first obtained my real estate license thinking it would help me in my work as a loan officer. I eventually went on to work with other lenders such as Washington Mutual but the call to build was strong. There was one problem however; I had never really built anything. I was too young to ever work directly for my Grandfather’s construction company so I did the next best thing. I went to work for other builders.

I started with Weyerhaeuser Real Estate up at Snoqualmie Ridge. I soon became the Sales and Marketing Manager for both Snoqualmie Ridge and Redmond Ridge. I became a Quadrant Homes employee when Weyerhaeuser transferred ownership of their planned communities to Quadrant. I reported directly to the forward thinking Executive VP of Sales and Marketing and learned their very successful system for building and selling over 1,000 homes per year. It was here that I first thought of the possibility of adapting this sales model to residential real estate. During the next few years I worked as Director of Sales for D.R. Horton Custom Homes. I worked on the residential resale model often however hoping to some day see it come to life.

Having worked with the two biggest builders in the Pacific Northwest, I understood the efficiencies that could be achieved by working with volume. Having had my real estate license for the last 10 years and working in several different big brokerages, I fully understood the inefficiencies that were commonplace in the existing real estate paradigm. Quite frankly the Internet age caught the real estate industry off guard. Information about homes and home prices was suddenly available online. The consumer no longer needed to walk into a brokerage and talk to the greenhorn at the “up-desk” to get the information they wanted about a home. This is when the air started leaking out of the real estate balloon.

The smart brokers at least started talking about technology but they were so far behind the technology curve that a whole industry of “middlemen” was spawned to connect potential clients from the Internet to the traditional agents. Almost overnight most buyers were shopping online prior to engaging with an agent and early on most agents and brokerages did not have a strong online presence. Companies like HouseValues and others sprang up to fill the void and started selling leads to agents. The fact that agents had to buy leads simply perpetuated the high commission structure.

This development frustrated me to no end. Here you have the technology and the information in the hands of the consumer but the consumer doesn’t know it. Most are still paying the higher commissions thinking those high priced agents do something different or magical that others can’t do. The only thing the high price traditional agents do that’s different is spend hundreds of thousand of dollars every week on pages of classified & print ads that no one reads and pay hundreds of thousands of dollars on storefront offices that no one walks into. Oh yeah, they also practice how to overcome objections to their unnecessary fees, i.e. “I have to split the commission with my broker” (only true for the inexperienced agents – and not your problem); “my broker won’t allow me to lower the commission” (agents are independent contractors & all commissions are negotiable); “I’d have to lower the commission that we offer to the buyer’s agent and this would deter agents from showing your home” (lie, lie, lie – any listing agent can lower their own fee without lowering the fee to the buyers agent). I’ve worked for the big brokerages, I’ve seen and heard it all first hand. Traditional agents have simply had it too good for too long and they are fighting tooth and nail to preserve it.

I built EZdigs to be more company centric where the corporate office supports the agents in the field by assisting with marketing, advertising, contract coordination and basically everything else the agent needs so she can focus on her clients. This allows for consistency in branding, customer service and marketing/advertising. It also allows the broker to have more direct involvement with her agents’ transactions. Simply put; it’s a better, more efficient way to do business.

So….how does all of this relate to the cost of housing? Here’s an example; on purchases we provide a credit to our buyers. The seller typically pays a 3% commission to the buyer’s agent; since we only retain 1% for our services, we credit the difference to our buyers. On a few occasions in lieu of the credit we have simply lowered the price of the home by 2%. In this case the seller actually nets more because they don’t pay the commission and they pay slightly less in excise tax (lower price = less excise tax). So, clearly there is a direct correlation between real estate commissions and higher home prices.

So by lowering real estate commissions we can have a direct impact on the cost of housing. My belief is that real estate commissions will be reduced to 2% of a home’s selling price and that amount will be split between the buyers and seller’s agents (1% each). With median home prices hovering around $500,000 in areas like King County, this should be more than enough for hard working agents & their efficient corporate brokerages.

The irony is that groups like the National Association of Realtors®, Washington Association of Realtors® (both of which I’m a member) talk about how the high cost of housing is a “priority”. The reality is that real estate agents can do more than any one entity in the home buying process to lower the cost of housing by simply lowering their commissions.

If traditional brokerages want to continue to try and justify their high fees, well that’s OK with me. As more and more consumers educate themselves on the process and their options there is more of a backlash against the traditional fee structure. In fact last months edition of Realtor Magazine stated that 63% of Americans think that a 5 or 6 percent commission on just a $300,000 home is too high. The official response from the National Associations Of Realtors®? “All commissions are negotiable.”