Price is a one time thing, and costs are a life time thing. The PRICE is at the top of the first page of the Offer to Purchase and the top of the mind of home sellers. It’s not the price that you end up with, it’s the equity that remains after you pay the expenses, fees, costs to sell. In an uncertain market, prices may go down. And if they do, Essential Real Estate’s Success Fee plan becomes essential.
The High Cost of Broker Commissions
The commission rate will consume the largest chunk of your remaining equity. There is no standard commission rate in real estate. There may be similarities in rates, and some myths or beliefs about rates, but there is no standard rate. Essential Real Estate doesn’t make you negotiate or ask for a favorable rate. We just made our rate favorable from the start: $499 and 1.0% of the purchase price is our Success Fee. You are welcome to offer a fee to a buyer agent to bring a buyer, but we don’t expect it to be any set number. On Thursday I was told by an agent, 3.0% is the standard buyer agent fee. I disagree. It may be a number expected to be offered but our expectations adjust to reality.
Don’t Give Your Equity Away…negotiate
Agreeing to pay an amount before you see an offer makes no sense. There is no requirement that anything be promised to a buyer agent. We discuss this with our clients. Look at it this way; a seller pays for an Offer. Offering to pay more than an offer is worth before you see the offer is illogical. Holding something back could increase your NET on an Offer below your expected price.
There will be no boycotting of your home by agents who don’t like your offer. That’s unethical and depending on their agency, it’s probably illegal. Besides, how will real estate agents prevent buyers from seeing homes on the market? This is not 1980. Home shoppers find the homes they want to see and they find them from the comfort of their home. They do not need access to the MLS to see your home is for sale. The internet is the real estate consumer’s greatest asset…until it’s time to negotiate.
Negotiate Profitable Terms
The money you spend to close the sale is spent from the moment you agree to price and terms. It doesn’t stop there. Contingencies are the buyer’s opportunity to chip away at the price (and therefore your equity) from the time of acceptance and possibly until closing. Real estate agents are not created equal. They don’t have equal experience. And years of experience without learning is no advantage to the public. As sure as agents believe commissions are standard, it is more certain there are agents who believe all offers are standard. The forms might be; but the agent who knows how to customize an offer for the buyer and the situation, taking into account the seller’s needs will create an offer that works for their client and appeals to the seller.
Use the remaining strength of the market to negotiate profitable terms. Talk to us to get a better understanding of this important strategy. Our clients learn to focus on their NET EQUITY when reviewing offers. A big price can have a excessive costs. Repeat this: Price is a onetime thing. Costs are a lifetime thing. Pay less. Keep more.