Month: April 2020

The Gift of Solitude

Solitude is the gift we may choose to receive when we accept the limitations of events we can not control. Life as we knew it ends swiftly with or without tragedy. Something as tragic as the death of a family member or as inconvenient as a stay-at-home response to a pandemic will leave a person alone against our will. Fifteen years ago I lived the tragedy. The pandemic related isolation reminds me of that spring-summer-fall-winter of 2005 in the way both experiences are doorways to the health benefits of solitude done well.

The solitude experience is peacefully invigorating. I do not believe good things come from tragic events. Good people who experience tragedy have a choice to accept what is and do good or resist and do harm. Whatever your feelings are about social distancing and work restrictions an alternative to anger and resentment is acceptance and exploring solitude. These opportunities are few and far between. There is nothing good about a deadly pandemic. Good people are choosing to do good for humanity all over the world. We are all not on the front lines but we all can explore doing something good for ourselves and people around us. Exploring solitude is free.

Real Estate Commissions. The beginning of the end of six percent.

 An Apple laptop in 1989 sold for $6,500.00; it carried all the power of 16.5 lbs of modern technology.   

In 1989, according to Zillow, the typical real estate commission charged to home sellers was 6.0%. To go from Milwaukee to Tampa, a travel agent booked our flight and found a hotel. The fee we paid was the cost of travel. 

In 2020 Featherweight laptops are a dime a dozen. We’re all travel agents, and we work for free. Real estate broker commissions are typically 6.0%. The last time you saw an advertisement by a real estate company for a house for sale was probably the last time you heard of a travel agent getting her real estate license.  

Even with the current pandemic, homes are on the market for relatively few days. It’s common to see a home under contract in less than six days on the market. What isn’t common is seeing broker fees charged at less than six percent of the sale price. Why is that?

I believe the six percent commission is immune to the pressure of technology, in part because the public accepts real estate myths; without demanding the evidence, and in part because there are too few options for home sellers. There were too few options in 1989 when I started my real estate career, and there are too few today. Essential Real Estate, LLC, is a new option we brought to the market, and it’s well-received. 

Before it was mandatory to work from home, real estate was a natural business to operate from home. Going to an office is not essential to conducting real estate business. Homesellers pay those office rents, and they pay it with their home equity. What advantage does a two-story office building offer to the transaction? What advantage is there to the client that the company has offices all over town or around the state? 

The key to making real estate service fees less of a drain on home equity is to keep overhead costs down and invest in transaction negotiation skill development. A smarter, more capable agent is less expensive to develop and much more of an asset to the public than bricks and mortar and leads capturing systems. 

Essential Real Estate’s Success Fee is $499.00 and 1.0% of the sales price at the time of closing. We counsel the home seller on the facts about offering a commission to a buyer agent. We believe it’s wise to provide something to a buyer agent, but it’s not necessary to give any set amount before you see an offer. The myth of the 3.0% buyer agent fee might be the most significant cost owners have been paying unnecessarily, if not forever, at least since Zillow came on the scene. 

The client who hires Essential Real Estate to sell a $400,000 home pays Essential Real Estate $4499.00. The amount of money the seller will pay to a buyer agent depends on the terms of the Offer, and the terms of the Offer rely on the competition we generate. A reasonable expectation is $8,000. In this scenario, the owner pays a total of $12,499.00 in broker fees. Compare that to a six percent fee of $24,000.00. Essential Real Estate is a full-service broker. We don’t discount our fees. We charge a fair price, but we only charge for the real estate license work. Isn’t that what you expect?