Massive Debt & Excessive Fees. The Driving Forces Behind America’s Independence.

It’s a familiar story in America. The ruling class flexes its muscle to grab power and dominate. The massive debt incurred has to be paid by somebody, and that somebody is the public. The wealth and power gained serve no purpose to the public. It’s the burden of the cost of the misadventures the regular folk will carry. The American Story of Independence from Great Britain will play out in neighborhoods across the country as Americans stand up to resist excessive real estate broker commissions and strike out for more choice and independence. 

Taxation Without Representation

If a law was put into place to prevent price-fixing, why are there few alternatives to full service residential real estate brokers who charge commission fees less than 6.0%?  In 1989 I received my real estate license in Wisconsin. The sales manager told me, “You don’t need a fancy calculator; learn to calculate 7% of the home’s price. That’s all the math you need to know.” Thirty something years of massive technological changes later the commission rate has held its own. Comparing 1989 dollars to today’s value, a 14% reduction in a typical broker fee from 7.0% to 6.0% has done nothing to reduce the broker’s revenue. Rising home values kept pace to allow the broker’s commission per transaction to remain equal. Maybe the private club organization system has contributed to stifling the growth of alternative business models and consumer choice. That’s research someone could do. 

Providing Choice Contributes to Freedom

Every business owner has a choice to set their prices. Real estate is no different, although it has a peculiar method for budgeting. The formula looks like this: Number of Transactions @ $ per transaction, x 6.0% = Gross Commission Income (GCI). GCI – expenses = Net Company Income. King George, The Tyrant, knew all he had to do to live his lifestyle, was to bury the costs of doing more than business into his expenses and turn to the public to pay the bills. The model of spend and tax, tax, and spend aren’t new. (And no more tolerable today than in 1774.) 

Essential Real Estate, LLC chose to eliminate expenses, enhance the delivery of essential real estate services, charge only for substance, and live within means. We set our fees to increase the home equity our home selling clients keep, and we operate needing a lot less cash (your money) to do our business. Our clients who sell at prices of $200,000 to $800,000 are keeping $4,000 to $16,000 more of their home equity than they would if they were required to pay a typical 6.0% broker commission. Some of our clients are keeping even more of the money they earned by choosing from other cost-saving options we present. 

Choice. It’s an American Thing

The prerevolution colonists were not all opposed to paying excessive taxes and living with little or no choice. The exchange of the security of familiarity and the belief in unlikely possibilities was enough to keep some folks in line as loyal subjects. It was the choices of those who knew they deserved more of what they earned, less limitation on preference, and an opportunity to pay what was necessary, and no more, that spurred the birth of a country. As more real estate brokers introduce alternative business models to the public, the American consumer of real estate service will enjoy more freedom. Happy Independence Day America!

Author: Tom Meyer, Owner-Broker, Essential Real Estate, LLC Madison, WI

The real estate transaction, disclosure, and confidentiality are the business of a Wisconsin licensee. It's in the transaction where the skill of the licensee, and their commitment to the law where the public is protected or placed at risk. What you see REALTORS do to brand themselves and their firms, promote their service, advertise, and process paper do not require a license. I believe negotiations to create and honor a real estate purchase agreement is where the agent has the greatest value in a transaction. Paying professional fee rates for the administrative services is a choice consumers deserve. Old business model driven commission rates are taxing the home equity of American home sellers. Essential Real Estate was created to put more money in the hands of the consumer by eliminating expenses for the firm and charging a fair price for the real real estate service.

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