Vision and Mission. Why Essential Real Estate exists.

The ability to matter is open to just about anyone. * That merits inclusion in a future edition of The Words I Wish I Wrote. The purpose of Essential Real estate is not “make a profit of X dollars”. Profit or loss is an outcome of living a purpose. Our purpose is the Why we exist. Home equity is a treasure under constant threat. From the day your offer is accepted to own a home until the day you sell that home to use what remains for the next significant thing you do somebody wants a chunk of your treasure.

“To matter” means means, to me, creating choices where none or too few exist for people who want to keep, or get back, what they need to live their purpose.**

In the field of real estate, where we live, the problem we set out to be a solution to is the constant demands made on home owners to spend their home equity treasure on services they don’t understand or don’t need.

It is our Vision to be the real estate broker of choice for people who believe they have more important uses for their hard earned equity than paying fees and costs to sell their homes. We see a future where our results inspire others to start their own endeavors strengthening a field of healthy competition for the benefit of the public

Mission: Thrive to master transaction skills to be a wise choice for consumers who prefer to have a transaction skilled real estate agent on their side, and pay only for what they need.

The effort to fulfill a mission that matters will be met with resistance. One result of our existence may be that other services are created to improve on our model and bring more choices to the market for people who desire to keep more of their home equity in their hands. Resistance is natural; it may even be an invitation to dialogue.

*Quote from Seth Godin.

**The Aaron Meyer Foundation is one effective choice we brought to life for improving the lives of families who have young people in substance use recovery.

Pay less in commission. Wait for the Offer before promising 3.0% to the buyer agent.

Maybe this is a true story, perhaps not. There was a Detroit automobile assembly line where the last guy in the assembly line uses a mallet to pound one or two of the doors. An executive from another car manufacturer visited the plant to see how to build an efficient assembly line for her company. The visitor asked, Why is hammering those doors? The plant owner replied, “That’s his job. Doors don’t always shut tight at first. A few bangs with a heavy rubber mallet on each door solves that problem. See how the door fits now?”

Later the fellow from Detroit paid a visit to the other plant to see the assembly line in action. The American noticed the last person in the line did not have a mallet. The man from Detroit turned to his host and said, “We never send a car out with the doors, not snug. You gotta have a mallet-man at the end of the line. Trust me. If you don’t bang the doors shut, they won’t fit right, and you’ll have upset customers.” The host smiled politely and replied, “We too never send a car out with unfit doors. We designed our doors to close snug the first time and every time.”

We will do what we have done until someone asks the magic question, WHY? Once the item is questioned , the solution is often simple and cost-saving. We have one of those costly old ideas and it costs home sellers millions of dollars every year. It’s the belief that you must offer a 3.0% commission to the cooperating or buyer agent. Anything less and agents won’t show your house. I say that idea is a long perpetuated myth unsupported by logic.

There is no hiding of a house on the internet

REALTORS held all of the information about homes for sale thirty years ago. If you wanted to know about new listings, you had to see a REALTOR. If you wanted to see houses, you saw the houses the REALTOR wished to show to you. If an agent was dishonest enough to be unethical and chose homes to show his clients by the price of the fee he would earn, I suppose it was possible to hide homes from would-be buyers. Today that’s not probable, and it’s illegal. Some things changed.

A search of the MLS for homes in any price range in any location will yield maybe a half dozen homes for sale and without offers pending. That’s no crowd where your house can get lost. The searching is not done primarily on the MLS by agents. The searching is in the hands of the consumer on smartphones, tablets, laptops and it’s the home buyer who is doing the searching. Instant new listing notifications get to the hands of buyers within seconds of being entered on the MLS. The chance that a buyer is alerted by an agent to a home they buy is diminishing. So, is there any advantage in offering a 3.0% commission over something more like 2.0%?

The Buyer sees the new listings first
The National Association of Realtors has the facts. It’s highly likely that the home a person wants to make an offer on was discovered by the person and the agent is invited along to do what the agent does. As good as any agent is in getting new listing information to a buyer, the internet is better. A late-night entry of a new listing will be in the smartphone of the public long before the agent has the first cup of coffee. (Of the homes that people buy, I wonder what percent were discovered by the Buyer while wearing PJs? I bet it’s a lot.)
Don’t give away your negotiating leverage
By promising to pay any amount of a fee to a buyer agent before you’ve seen an Offer you are spending money on a mallet-man. This is the reality. The Buyer discovers the house. The Buyer tells the agent. The Buyer decides to make an Offer. The agent writes the Offer. And this is where the buyer agency fee is typically negotiated. Regardless of the fee, you offered to pay to the buyer agent; the Buyer is going to find the house and see the house. Irrespective of the fee you offered to pay the buyer agent likely will reject your Offer (3.0% or less) and negotiate for the seller to pay the buyer agency fee of 3.0% or more directly to the buyer broker at closing. And this is where your opportunity comes.

If it’s in the Offer it’s negotiable

Imagine you offered to pay a buyer agent 1.5%. The Offer, the buyer agent, writes, is at your asking price but requires you pay the buyer broker 3.0% instead of 1.5%. You’re not deciding the buyer broker fee; you’re deciding if the net price after the cost is acceptable to you. If you have no other options double, the commission might be agreeable to you. But when you have options, more than one offer, there is a chance one of the Buyer Agents will concede 1.5% commission is better than coming in second holding out for more commission.

Let’s assume we have two full-price offers on a four hundred thousand dollar sale. The Offer where the seller pays a 3% commission will drop the value of the Offer by $12,000. The other, at the same price where the Buyer Agent accepts your Offer of 1.5% leaves $6,000 in the hands of you, the seller.

The law, the Code of Ethics, and the Internet, and common practice is on your side. Take your advantage while it lasts. Pay only for what you need.

Selling Your Home is Not Your Objective.

The selling is a means to an end. It’s the work that’s done to accomplish the objective. And the objective is to liquidate the equity. Whatever we intend to or might do with the equity is a secondary objective.

When liquidating equity is the objective it makes sense to consider the amount of equity that has to be paid as a price to liquidate. Essential Real Estate set its fee at 4.0% or less, plus $499. You can choose to spend 50% more with any number of brokers. We think you should have a choice to keep more of your equity.