Be an Innovator and Early Adopter, the Majority wait to follow you.
Discussing real estate commissions is not a violation of fair trade. Colluding to establish a set price among practitioners is. Few topics raise the ire of Realtors like questioning commission rates. When you think about how many real estate agents, with vastly different education, experience, track record, live in any community it’s worth asking how the fee brokers are likely to quote remains consistent for so many years.
Real estate markets, REALTORS will tell you, fluctuate. Today your house is worth X, next spring in may be worth Y, or Z. Why is it that real estate broker fees don’t fluctuate with markets? For example, immediately prior to the recession broker fees in the firms I worked at charged 6.0% commission to sell a home. During the recession, when homes lagged on the market for months, the fee was the same 6.0% of the sale price. In 2016 we had clearly emerged from the recession yet rates held at 6.0%. By 2018 when the median days on the market dropped to a matter of hours, a rate tied to the market would drop. That didn’t happen. The days on the market are still counted in hours, and if you call any three firms that come to mind and ask them what they charge let me know what you find out. This I am sure of, regardless of the proven skill of agents in a firm, the commission rate will not fluctuate. The last person off of the turnip truck will collect the same commission as the agent who works smart to learn what only a few in the industry strive to learn.
Innovative ideas are offered by the pioneers who aren’t afraid of push-back from peers who feel threatened. The innovators are the few who are first to reap the benefits, and the early adopters are close behind. These are the fearless leaders. They have a problem, know they have a problem, and they’re going to take action to solve it. Because they take action the rest of the world becomes less comfortable with living with “the problem” and they adopt the solution.
There is no such thing as “limited real estate service”. If it’s licensed real estate service, there can be no limitations. You’re either providing real estate service o you’re not. “Full service” is equally peculiar. There is not a chance in the world for an unskilled licensee to provide the same level of competent service as a skilled practitioner.
Today it’s common for on real estate firm to represent themselves, or other brokers, as full service or limited service. I don’t know what is intended by everyone who uses those terms. I do know this, Essential Real Estate is an innovator in real estate service pricing. The innovators and early adopters who are our clients are leading the way for the majority to benefit one day. The way for innovation to spread and be accessible to more people is for the early adopters to share their experience. The majority of the people in any community depend on you to tell them it’s OK. And in this case, it’s Okay to keep more of your home equity, and pay a lot less in real estate commissions.