Real estate is a regulated business with high standards of skills required of the licensees.
Fees, Costs, Expenses and Concessions are Paid 100% From Equity, Not from Sales Price
Your equity is the bank account used to pay fees and costs to sell. As a percentage of your sale price the fee looks relatively small. The sales price is not where your expenses are paid from. That’s just a number used to calculate certain fees. The only real number is your GROSS EQUITY.
If your only fee was commission and the commission paid to a broker is 6.0% as Zillow suggests, and your Gross Equity is $150,000, your 6% is a nearly triple 16.0%. Here’s the thing, the commission is only one of the fees, expenses, and costs. The greatest threat to you equity is errors made in representation, flaws made in contracts, deficiencies in negotiations.
Instead of focusing on the asking price, or the sales price, keep your eye on your equity. Guard it. Make everyone who wants it earn it, like you did.
Published by Tom Meyer, Owner-Broker, Essential Real Estate, LLC Madison, WI
Real estate is a contract business. A client's satisfaction with the transaction process is dependant on a clear, concise, well-crafted purchase agreement. As a broker, I'm held to the highest standard of transaction competence. Much of my career involved coaching licensees to improve their contract skills and resolving problems for agents who didn't take the contract work seriously. I believe the key to a smooth, profitable transaction is customizing the experience for clients, anticipating challenges, and avoiding high-risk scenarios. The real estate transaction is not stressful for my clients. They know they're safe with me.
View all posts by Tom Meyer, Owner-Broker, Essential Real Estate, LLC Madison, WI
