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Show Summary
In this episode of the Real Estate Pros Podcast, Host Michelle Kesil interviews Felix Mendelson, the founder of List Friendly LLC, a platform designed to streamline the process of hiring buyer agents and managing commission agreements. Felix discusses the inspiration behind List Friendly, the feedback received from users, and the unique features that set it apart from traditional real estate services. The conversation also covers the benefits for both buyers and sellers, as well as strategies for scaling the platform’s reach.
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Investor Fuel Show Transcript:
Felix Mendelson (00:00)
Okay, so there’s several use cases. So first of all, as an investor, you know how important it is to get that extra percent or 2%. So you can actually wind up saving 4%.A lot of buyer’s agents will work for 1%, whereas listing agents usually will not accept anything less than 3%. So if you cut that listing agent out, it’s like being a for sale by owner. But for sale by owners very often are not willing to pay buyer’s agents.
Michelle Kesil (02:03)
Hey, everybody. Welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil. Today I’m joined by someone that I’m looking forward to chatting with, Felix Mendelson, who has been making serious moves creating List Friendly LLC, which is a service provider combination of LegalZoom, DocuSign, for agents, commissions.and helping you hire buyers directly, buyer agents directly. So excited to have you here today, Felix.
Felix Mendelson (02:39)
Thank you for having me. So a little bit about myself. ⁓ I’m an attorney and real estate broker licensed in California. And List Friendly is my project since the practice changes of last year’s settlement that the National Association of Realtors entered into, where agents had to stop advertising commission splits for each other and also made different changes in the way that they share commissions.And so List Friendly was a brainchild that ⁓ addressed these issues head on because currently most buyer’s agents have no certainty as to how much commission they’re going to make or even if they’re going to make a commission because that’s all negotiated at the point of ⁓ the offer rather than at the point of the initial. ⁓
home showing and so ⁓ what we do is we are like a We’re kind of like a wanted poster like in the old Wild West where you would have the sheriff post a bounty and Put posters up all over the place ⁓ Analogous to let’s say selling a home and you would have a bounty to the buyer’s agent for helping you sell that home and so ⁓
Every bounty hunter or every agent can sign up for the commission that is being offered on our website But only the one who actually brings the buyer who buys the house gets the commission so in this way a home seller or an investor can themselves open an account post their property and post a contract like post a bounty that ⁓ Buyers agents can see and that buyers can accept right online. And so you could have a
buyers agents all interested in selling your house because from the get-go they know that you’re paying a commission and as a sophisticated ⁓ home seller as an investor you may not need a listing agent you may be able to just use our website advertise and get you all these interested buyers agents to bring a buyer because they know that they’re going to be earning a certain amount of commission
Michelle Kesil (05:48)
Awesome is this launched nationwideFelix Mendelson (05:52)
Yes, so the launch is absolutely nationwide. The contract that we use is a standard two-page form and I collaborated with attorneys from the East Coast as well as attorneys from the West Coast where the law is a little bit different to help write the terms of the agreement that’s available on listfriendly.com. And so there’s no cost to sellers to use the website at all.⁓ The cost is paid by the buyer when they purchase the home and that’s the only fee that we charge. So sellers can post their home, join the website and post a commission agreement all without charge.
Michelle Kesil (06:40)
Awesome. So how did you come up with this idea?Felix Mendelson (06:44)
Well, in February of last year, when the litigation against the National Association of Realtors was moving forward, this was a class action lawsuit, I knew that the realtors would lose. And so I started brainstorming of how can we continue to provide the services of buyers agents and listing agents.and have them compensated. ⁓ How can we do that with these new practice changes? And so that’s how ⁓ List Friendly was born, conceived and born. And we launched about two months ago. It’s a fully functional site now and can be used nationwide.
Michelle Kesil (07:32)
Amazing. What have been some of maybe the feedback that you’ve gotten from the users?Felix Mendelson (07:40)
Well, ⁓ the feedback from agents is kind of mixed. And the reason is that a lot of agents just went back to doing things the old fashioned way. ⁓ But instead of advertising a commission split, it’s just done orally at the time of ⁓ making an offer. And so ⁓ that’s been a challenge.And that’s one of the reasons that I’m looking to move the site into the ambit of investors and home sellers where listing agents are not involved so much.
Michelle Kesil (08:20)
Yeah, absolutely. And how are you focusing on scaling this?Felix Mendelson (08:26)
So scaling is through ⁓ podcasts because we’re really looking for traction now. We’ve only had one home listed on the website that sold. ⁓ It sold about a month ago, but traction has been a real issue. So it’s live and working, but no one is using it. And that’s one of the reasons that I’m on this podcast pitching it now to you.Michelle Kesil (08:53)
Yeah, absolutely. So can you share a little bit more about why someone would use this over like the standard approach?Felix Mendelson (09:00)
Okay, so there’s several use cases. So first of all, as an investor, you know how important it is to get that extra percent or 2%. So you can actually wind up saving 4%.A lot of buyer’s agents will work for 1%, whereas listing agents usually will not accept anything less than 3%. So if you cut that listing agent out, it’s like being a for sale by owner. But for sale by owners very often are not willing to pay buyer’s agents.
So if you’re willing to pay a buyer’s agent, you can save a significant amount of commission. The other use case that’s really helpful is if you have a home that’s not selling and you’re thinking about dropping the price.
So list friendly gives you another option because price is really not the only factor that buyers consider For instance in many states the buyer’s agent can credit back a portion of their commission To the buyer and that buyer can then go and use that towards the down payment.
They can use it towards closing costs So let’s say you have a stale listing and you’re thinking about dropping the price and you’d have to drop it significantly So instead of that, you could just increase the buyer’s agent commission that you’re offering through the website
and then advertise that fact so that buyers agents will be leveraged by your offer to bring buyers and those buyers will also be happy because currently the ⁓
Realtors require and some state laws require that buyers and their representatives sign an agreement before they make an offer and so in that agreement the buyer is responsible for the buyer’s agents fees and a lot of buyers either don’t have the money or don’t like that so if you’re offering a buyer’s agent commission upfront and The buyer knows this they know that they’re not on the hook for the commission and They might be able to make a little bit extra to help them with closing costs inspections
and even down payments depending on which state you’re in. So a great use case would be instead of dropping the price 10 % you just go to a 5 % or a 6 % buyer’s agent commission, advertise that fact on Facebook ⁓ or LinkedIn or Instagram or wherever you prefer to advertise and then get ⁓ a lot more interest without lowering the price.
So ⁓ we also offer Facebook advertising services to encourage people to list on the website, but those are at cost. We don’t actually make any money on that, but we have some expertise in it.
Michelle Kesil (12:18)
Awesome. And how does it work for the buyers? Is it like a subscription service?Felix Mendelson (12:23)
No, so for the buyer, the price is by a deal. So let’s say, for instance, you see a Facebook ad for a home that’s offering a 3 % buyer’s agent commission. You could click on that ad, go to the listing on listfriendly.com, and sign the contract on behalf of your buyer’s agent, all at no charge. If you don’t wind up buying the house, there’s no charge. If you wind up buying the house, then we charge a fee. It’s almost $400. It’s $396.per transaction. So there’s no membership fee and ⁓ that’s the only fee we charge. And you also don’t need documentation. You don’t need to, let’s say for instance you’re an investor and a buyer calls you up and says or a buyer’s agent calls you up and says hey are you paying a buyer’s agent commission? And what if you say yes
What next? Right? You need to get something in writing together. So instead of going to an attorney, you could simply use the forms on our website and there’s your in writing agreement.
Michelle Kesil (13:31)
Yeah, awesome. What else are some of the features that maybe you can share for people?Felix Mendelson (13:40)
⁓ So.Other features, we’re really specialized. So we’re a full service real estate marketplace that’s not connected to the IDX. And for people that don’t know what that is, so multiple listing services have something called an internet data exchange or IDX. And that’s how your ⁓ agent gets your home up on Zillow and all the other real estate feeder sites. But they can’t advertise commissions there. So on our website, which is not connected to the IDX, you can advertise commissions.
for the buyer’s agent. And it’s not distributed to ⁓ any of the feeder sites like Zillow. ⁓
you’re not violating any National Association of Realtors regulations or bylaws. You’re not violating any laws that followed after the National Association of Realtors settlement last year. So that’s an additional feature. Basically, it’s a platform like thousands of other platforms out there where you can post your home, but you can also post a commission that you’re offering, which is something that you’re not going to find on Zillow. You can’t do that on Zillow. You can’t do
that on realtor.com because of the settlement.
So we have a little bit more leeway in what we can do. ⁓ Some of the other things, obviously, Facebook advertising, LinkedIn advertising that we can provide at cost without contracts, ⁓ without long-term contracts like you would get with an agency. So let’s say, for instance, you’re an investor, a lot of realtors hire social media advertising agencies. Those agencies usually have six
months contracts and advertising minimums and then they collect a percentage of the amount of ad spend that you would that you would spend. So we don’t have that. So if you’re just a one off let’s say investors selling a home maybe you do one flip every six months you don’t have to get into a long term contract in order to get that Facebook advertising and that LinkedIn advertising which is active marketing. You don’t wait for people to stumble across your posting on Zill.
or on the MLS and then contact you. You’re really going out there and finding buyers. Which I think with the changing market in a lot of parts of the country the market is tilting now towards buyers. ⁓ I think that’s really important to go active not to wait for buyers to come along.
So we really specialize. So basically the whole idea is you post your property on the website. You can offer a commission using our forms. Costs you nothing.
You can accept ⁓ commissions on behalf of your agent using our forms. Everybody’s clear about what the risk reward is. ⁓ The buyer’s agents know that if they risk their time, they’re working, they’re definitely going to get paid a commission. And it also takes the commission off the table at the time of negotiation. So that’s one less thing you have to negotiate about.
But we’re really specialized. We don’t do everything. We don’t promote agents, for instance. We don’t sell leads. We don’t do any of that. We’re a combination, as I had said, of DocuSign and LegalZoom, but just for real estate agent commissions. We have a simple two-page form that’s easy for anyone to use or understand. ⁓ Of course, we say that you should get the advice of an attorney because ⁓
real estate is local and we’re a national company so we don’t address the laws in every jurisdiction. We have a general form kind of like a general will that you might buy or a living trust that you might buy from your local store and you can use that in your state but obviously we have to say use your own risk, consult an attorney.
Michelle Kesil (18:23)
Yeah, understood. Thank you for sharing all of that. I think that’s really helpful information.Felix Mendelson (18:30)
⁓ Also, you can track how well your, ⁓ how much traction your listing is getting because we save all of the agreements in a folder that you can then access and you’ll have the name of every prospective buyer that looked at your ad and filled out a form and their agents so you can follow up with them later. That’s another added benefit. And I guess that’s about it.Michelle Kesil (18:59)
Yeah, amazing. Thank you for sharing everything that you guys are offering. What a cool solution.Felix Mendelson (19:07)
So I’m happy to also take calls and do. ⁓do a 20 minute introductory video call with anybody who’s interested in posting or listing their home with us. ⁓ Let me make one other ⁓ statement and that is that we’re not real estate agents. The website is not licensed. It’s basically a service provider much like, and a real estate platform, much like Zillow or FSBO.com or Trulia. So we’re really focused on providing
that service. We don’t do anything like legal advice or real estate services.
Michelle Kesil (19:50)
Yeah, understood. Thank you for prefacing that. Well, before we wrap up here, if someone wants to reach out, connect, learn more, where can people find you and connect with you?Felix Mendelson (20:02)
So there’s a Calendly link right on the website that they can use to schedule a call with me or they can email me at [email protected].Michelle Kesil (20:14)
Perfect, I appreciate your time, your story and your perspective. Thank you for being here.Felix Mendelson (20:20)
Thank you very much, Michelle. I appreciate the exposure.Michelle Kesil (20:22)
Of course. And for the listeners, yes,thank you. For the listeners that are tuning in, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Felix, who are creating real businesses, and we’ll see you on the next episode.
