There is a place for a la carte real estate.

Sunset Village on Madison’s near west side is a real estate hot spot. From the end of March through yesterday, twenty-three homes have sold and closed. The average sale price of $366,800 is 101% of the average asking price. Seventeen of the twenty-three owners accepted offers within the first seven days. What’s driving this aggressive market?

Is it marketing? Is it Google?

Have the real estate agents become exceptionally good at promoting homes and stirring up the competition? Or, has the process of finding houses and becoming a qualified buyer been simplified so much that there are many more home shoppers for the remarkably few homes for sale? I think it’s pent-up demand combined with modern convenience in the shopping part of the process. 

A la Carte Real Estate

Six percent of the sale price of a four hundred thousand dollar home is twenty-four thousand dollars. For most home sellers, that $24,000 is much more than six percent of their available equity, and it’s the equity we use to pay real estate sales commissions. What are we getting for our money? Marketing? Advertising? Promotion? Advice? Representation? Guidance? Probably some of or most or all of the above. Is it all worth the same?

Essential Services

I worked with a broker who liked to say she sells the sizzle. She was sincere. The service was slim on substance. The question of why people pay real money for fake smoke is worth exploring. But that’s not what we’re here to do. Knowing that the broker fees you pay will come from your saved home equity, it’s smart to consider paying for services you need or services that make a difference and leaving the inconsequential smoke and mirrors out.  

Essential Real Estate Only Charges for Essentials

A la carte services allow consumers the opportunity to pay only for services they consider necessary. In fast markets, home sellers could save significant dollars by not paying for services that are either don’t get used or make no difference in the outcome. We created Essential Real Estate to be a reasonable price option for homeowners who prefer to keep more of their home equity. Rather than break down all of the processes real estate people call real estate service and put a price on each action, we made the process simple. We charge $499 to cover the expense of a sign, professional photography and staging consultation. The one percent of the sale price we collect at closing is our compensation for the essential real estate work. People are going to come to see your home. Marketing and advertising are not driving people to your door. Being one of the few homes for sale is the driving force. The real work is negotiating the terms of the Offer. That’s our expertise. For that, we charge a fair and reasonable price. 

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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