Let’s assume your home sells for $300,000, and your realtor charges a commission of 6.0% of the sale price. Eighteen thousand dollars is the price you will pay for the real estate brokerage service in this transaction. If you are like the typical home seller, you probably do not have $300,000 in home equity (that’s where the money comes from to pay the commission). Maybe you have $100,000 in equity. Eighteen percent of the money you have saved in home equity is going to go to real estate brokers? And then where does the money go?
Expenses are Not Necessarily Essential
There was a day when real estate firms needed office space for their agents. The larger the firm the more square feet and locations they need. The bigger the office, the larger the parking lot. Those days are gone. People didn’t quit being REALTORS, they didn’t quit driving cars, and they don’t car pool to get to the office. So why are the parking lots of large firms mostly empty? REALTORS stopped going to the office. (The broker may pay less in their monthly coffee bill, but rent and staff expenses haven’t decreased.)
Not all expenses have anything to do with selling your house.
When was the last time you sat down with the Sunday paper to scour the real estate section? (Last week in Antigo.) Do you remember The HOMES Magazine, The Real Estate Book? Where’d those go? They went to the same place travel agents disappeared to; the World Wide Web.
Print advertising was expensive. Brokers couldn’t afford to advertise all of their listings each week and larger firms could easily spend multiple thousands of dollars a week in newsprint…more if you added color. Print advertising was an enormous line item in a broker’s budget; not today.
Essential Real Estate represents people, we don’t chase leads.
Advertising on the internet isn’t free. And brokers do pay to play on the internet. They pay your real money to play. But the game they’re playing is called “Lead Generation”. It works like this: You land on a real estate for-sale site, click on a house, spend a very little bit of time and you’ll be asked to give up your name, number, email, and address. When you give away your identity, you are captured. And then, you’re sold to multiple Realtors who paid to play. These folks compete to convert you to a client and a paying customer. (Essential Real Estate does not play the lead game.) As repulsive as pursuing, capturing, and selling people sounds, ask real estate companies to tell you about their lead generation systems. Sixty thousand dollars a year can easily be spent o staff time, and subscription fees. $60,000 is a likely figure for a mid-sized firm to invest in chasing people who don’t intend to be captured.
Your Equity Is Not Saved To Be Squandered
Before committing to a Realtor, home owners are told to ask questions. I know that because I’ve been answering those questions for decades. (The questions you’re told to ask aren’t the best questions you could ask.) You can tell values by seeing action. The action of spending your home equity dollars is found in a broker or agent’s business budget. Advertising, promotion, and other business expenses can be broken out to show dollars spent on company and individual agent image, and name recognition advertising. Property listing advertising is easy to track. If a broker is going to spend 50% of the $9,000 you paid them on promotion, wouldn’t you feel better if more than a few dollars of your home equity was invested in promoting your home, and not on the broker or the agent’s image?
Know Where Your Money Goes
Twenty thousand dollars of your home equity can be divided up by your broker or by you. Cars, houses, vacations, education, investment, philanthropy, entertainment, boats, savings, health care, insurance. There is no end to where your home equity can be spent by someone. Essential Real Estate charges $499 and 1.0% of the purchase price to represent you in selling your home. We built our service to give you more choices to keep more of your home equity. We do not chase leads, self promote, or advertise our image. We do not spend your equity on office space, utilities, staff, or expensive material things. All of our clients who sell real estate with us keep thousands; multiple thousands, of dollars of their home equity to invest in their lifestyles.
A recent client kept $8,651 of their home equity selling on our plan compared to a 6.0% plan. Another saved $9,701. And, another kept $11,501.