Paying Only for Essential Real Estate Service is an Innovative Idea.

Sixteen percent of the population are Innovators and Early Adopters who get-it. The remaining 84% follow.

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.

Your Radon Test Contingency Landed You in Second Place

The radon testing contingency, as currently written, is unnecessary. Including it in your offer may be why the seller rejected your offer to purchase and went with another. Before you weaken your offer with a misunderstood condition, get the facts and opt for making your home a healthy home. Expect to install a mitigation system. Let that sink in…  


Okay. Everyone who knows a cancer survivor or person who died can relax. I agree with you. If you have a choice, living in a home with a radon level below the EPA Action Level is a wise choice. The EPA makes it clear; a long term test is a more accurate way of measuring your in-home exposure to radon. Forty-eight or seventy-two hours is not long term. However, home sellers are unlikely to allow you time for a true long-term test in the home buying process. I am concerned that too often home buyers who get one of these two or three-day tests with results below the EPA Action Level conclude their home is radon safe, and they take no steps to protect themselves. That’s dangerous and avoidable.

A Better Strategy

Radon mitigation systems are simple They’re made with inexpensive PVC pipe, a hole through the concrete basement floor, an electrical outlet, and a $125 fan. Guaranteed to keep the indoor radon level below the EPA Action Level, the system might cost as much as $1,000.00 installed. The radon test a buyer pays for will be about $200.00. Considering it is common practice for agents to write offers with a provision that the buyer promises to not object to defects under $2,000, it makes no sense to weaken their offer by inserting a radon testing contingency.   

Uncertainty is Unnecessary

When market conditions favor one side in a transaction, the favored team does not have to expose themselves to uncertainty. I’ve heard agents say otherwise, and if they were right, I would agree with them. They’re wrong. Unless the owner is uninformed when comparing offers, they will prefer less risk to any risk. Allowing a buyer to renegotiate or have leverage later only happens when the seller has no options or poorly advised. 

Save your money—buy a mitigation system after closing

Does it not seem wise to save the $200, forego testing, and install a mitigation system after you close to ensure your level remains safer? Talk to the radon mitigation people. Find out how often they are unable to reduce indoor radon levels in homes at the cost of more than $1,000. If I’m wrong, please tell me. 

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!

Why Do You Do What You Do?

Making money, having health benefits, or becoming famous are outcomes of what we do. In some cases, these benefits are the WHY a person does the work they do. There are times when we have an opportunity to create something to solve a problem for other people, and the WHY is more significant than the payoff outcomes. Essential Real Estate exists to be our solution to a problem. 

Owning a home, some say, is part of the American dream, an avenue to financial security. To own real estate won’t make one’s dreams come true, but for those who choose to own their home, appreciation of value, and the growing home equity offset the costs related to owning. Appreciating value and decreasing debt against the property leaves a person with a nest egg of home equity dollars. On paper, that equity is a noticeable portion of net worth. As our net worth grows, so do our lives. And as our lives change, the value of the real estate compared to the amount of the home equity changes. When our plans change, and the home we live in is no longer part of the program, we will most likely part ways with the house, take the equity, and invest it in our next life plan. How much of that money-in-the-bank-equity is ours to keep might be far less than we expect. Costs to sell, including taxes, fees, and broker commission, are paid from our equity, and the amount that we pay is calculated as a percentage of the sales price, not as a percentage of our capital. (For example, a person with $100,000 of home equity selling a $400,000 house might pay 6.0% of $400,000 in broker commission. That 6% is $24,000 and $24,000 is 24% of their equity. Six percent is just sizzle.)

Broker Fees – The Value of Service and the Offer

The value of anything is relative to a person’s need and the thing’s quality. We don’t always know what we need, and we rarely can be sure of the quality of anything until we use it. And that’s why real estate broker commissions remain immune to fluctuation with the changing tech-driven economy. If you knew what you needed and understood what you’re seeing is the sizzle and not the steak, you would be more careful spending money from your home equity savings. 

Problem Identified and Solved

We believe home sellers should have an opportunity to keep more of their home equity when they sell and spend less of their equity on broker fees and selling costs. The problem is two-fold. There are few if any choice for full-service real estate brokerage at a price that is not arrived at by 6% of the value of the property. The second branch of the problem is that the home sellers often need or have better uses for all of their home equity, and those uses are not related to paying the bills of real estate brokers. 

Essential Real Estate’s Big WHY

We are in business to be your choice for full-service real estate representation at a price that leaves a lot more of your home equity in your hands to invest in the things that matter to you. A typical home selling client of ours will sell a home valued at $400,000. Our clients learn that they choose to structure their negotiations to keep at least $8,000 to $12,000 of the $24,000 they would pay if the broker commission were 6.0% of the purchase price. 

It’s A Lot of Money 

Every dollar our clients keep in their hands is a dollar they may invest in their health and well being of their families. When representation matters, and you have better use for your money than giving it away to people who will use your earnings to fuel their lifestyle, Essential Real Estate is probably the firm to interview. 

When happiness comes, what will you do?

Happiness is the moment before you need more happiness. Don Draper, Mad Men

Early this morning, without leaving the house, I found myself in a cafeteria-type hall with dozens of seminar attendees on break for lunch. The lady who plopped herself down on the chair next to mine slouched back and sighed, “I’ll be glad when I can get away from my boss.” She said she was tired of being afraid. Her pursuit of happiness had tied her to the whims of an unscrupulous employer. This overly stressed woman had the attention of everyone nearby. Her stress had affected her mental and physical well being.

At the next table, a man wearing a white straw hat, and gray whiskers waited until the woman had finished her sigh. With his chin in his hand, and his elbow on the table he asked, “When happiness comes, what will you do?” My dream self immediately began to contemplate that question. My real self woke up and went looking for paper and a pen to write the question exactly as I heard the dream man ask it.

A new twist

Do we wait for happiness to do stop doing what makes us unhappy? Do we expect to be happy before we begin to do what we believe is our meaning to life? Do we know what we would do if we found the happiness we think we are in pursuit of? Maybe we don’t even know what we would do if happiness found us.

The message I take from this interaction with dream people is that happiness is a choice and waiting for or pursuing happiness before doing what I believe is meaningful to life is a waste of time, ability, and opportunity. Last year I made commitments to cut ties with people who live lifestyles fueled by the assets of other people. This year I took steps to use the lessons I learned from people who will never be happy with what they have. Happiness arrives whenever I let happiness in.

Who’s Problem Is Being Solved?

Every business exists to solve a problem. Do we know who has the problem the business owner aims to solve? Some real estate firms want you to solve their problem; they’re easy to see when marketing like this:  Help! We need listings!   There is nothing about this plea for help to solve a Realtor’s problem that inspires anyone to step up and be part of the solution. But that has never stopped brokers from appealing to sympathy.

Who is the product and who is the customer?

Self Inflicted Problems 

In the real estate world, a listing agreement or a buyer agency agreement is comparable to a business order, and business orders are revenue-producing documents. Businesses have expenses, and paying those costs is dependent on revenue. To generate revenue, a REALTOR needs business orders. Without agency agreements, the agent and Firm have a bill-paying problem. When expenses outpace income, the problem is self-inflicted and not the consumer’s responsibility to solve. 

 To Serve or Be Served

A business built to generate revenue with the hopes of making a profit has a fundamental difference from a company established to solve a problem other people have. The attitude of scarcity permeates through a firm that claims to exist to serve. For the company created to solve a problem for other people, the mindset of abundance prevails. 

Just ask, Why do you exist?

By claiming to think differently about real estate and doing the same, everyone is as useful to people with a problem as changing the font helps improve poor writing. Slogans are meaningless when everyone can say the same thing about themselves. To know a person is there to serve you or be served by you is easy to figure out. Begin to discover if you are the product or the customer by asking a REALTOR what they know about the reason their firm exists. Ask the agent why they are in business. If the answer isn’t about being a solution to your problem, you’re a solution to their problem. 

Essential Real Estate Exists to be a choice for homeowners who want to keep more home equity and a preference for homebuyers who want to own the home of their choice without overpaying. 

The Power of Choice Over Conformity.

A lack of competition results in higher prices, inferior products, and suppression of innovation. Having a choice is a powerful force. Until notified otherwise, Americans are free to choose the services they want to pay for and products they want to own; bigger, smaller, yellow, blue. But what happens when the choice is limited to a blue or a lighter shade of blue.

Henry Ford gave us the Model T. When he was running them off of the assembly line as fast and as cheap as possible, he told the consumer they had a choice. They could have their auto in any color they choose, as long as they chose black.

Essential Real Estate began as a solution to a choice problem in the residential real estate service market. There is no shortage of color of real estate firms in Madison, WI. Color might be enough of choice to satisfy the car buyer in the 21st Century. Different colors and a variety of sizes do not benefit the consumer in price, service, product, or innovation; the four areas necessary for a favorable consumer market.

We believe real estate service, as licensed, is not something that can be limited and still be called real estate service. Time and again, the world proves that adding non-essential chores, frills, and activities to anything has a definite impact on increasing cost, and an insignificant difference in improving a product, service, or consumer experience. Conforming to expectations is a choice we rejected. Essential Real Estate is a choice for home sellers to keep more of their home equity and spend less on broker commission… a lot less.

Hold That Thought. Wait to commit to paying a set commission to a buyer agent until you see the terms of the Offer.

There is no requirement that a listing broker offers compensation of any amount to list a property on the Multiple Listing Service—the National Association of Realtors response to a claim in a new class-action suit.

However, once the broker publishes the amount of compensation in the MLS, the listing broker may not alter the percentage or dollar amount without the approval of the cooperating broker.  

A listing broker who publishes a promise to pay any money to a cooperating broker must have the seller bound (through the listing contract) to pay the same amount, or the broker will be liable to pay the compensation. A random search of homes sold since January 1, 2020, in seven Madison geographic areas gave me these results: 179/202 (88.6%) listings are published with 3.0% as the Offer of compensation to cooperating brokers (buyer agents and sub-agents). Fourteen sellers paid 2.5%. In two sales, the reward was 3.5%, and in 21 deals, the listing agent published compensation was less than 2.5%. 

There is Nothing Magical About 3.0%

I contend the reason there is nothing magical driving the 3.0% number. There is a flawed assumption driving the fact that nearly 90% of all home sellers commit to paying 3.0% commission, which may be more than necessary before they ever see an offer. The fact that 88.6% of sellers in this group promised to pay 3.0% commission does not prove that they could not have sold the property on the same terms and netted more had they promised to pay less than 3.0%. 

Keep your promise, but hold on to that commitment

Clients of Essential Real Estate, LLC are fully informed of their options and the reality of how the broker compensation and cooperation works. We prefer our clients to know that they are not obligated to promise to pay any amount before seeing the terms of an Offer. An informed home seller may be wise to wait until they see the terms of an Offer before committing themselves to pay a commission more costly than the Offer is worth. 

The Buyer Agent’s Commission is Seller Home Equity

Because real estate licensees are ethical and operate their business within the rules of license law, the commission offered by the seller or the listing agent has no consideration in their decision to present your home to their client. If there are facts to counter my assertion, please share them. American home sellers could save hundreds of millions of dollars in home equity every year by reserving their right to negotiate the commission after seeing the terms of an Offer. Clients of ours have the opportunity to keep more of their equity by knowing facts and not believing fiction. 

If your agent was trained, you’ll pay while they learn.

Training a pet works like this:  When I say SIT, you sit, when I walk, you HEEL. At intersections, we do the SIT thing every time. Why? Because that’s what the trainer said. 

Training a REALTOR is similar. On this line, you put an X in this box. You write this word in this blank. You include this contingency every time. Why? Because that’s what the trainer said. 

Professionals invest their own money and time in learning.  

The price of training a REALTOR will be at the expense of clients and customers. Training may be sufficient to give a person just enough awareness to get started, but not enough to make a difference for the client and customer when knowledge is necessary, and it’s always essential. We built our business knowing the fact that the real estate industry is training-minded. Training is practical for getting boots on the ground in higher numbers quickly. Boot camp is for foot soldiers in training. Elite soldiers are taught, challenged to think, to learn, and make mistakes at their expense, not at the cost of others. 

In easy markets, a trained agent may make enough money to keep coming back and doing the same thing without trying to learn more. In tough markets, they quit. They quit in the last recession only to return when the market rebounded. The skills they did not have before were costly to clients then, and the lack of those skills and the new skills they aren’t learning cost the public again. 

You don’t know what they don’t know until you need what they can’t do

A fundamental failure in any service business is failing to learn the WHY behind what we do. When you know WHY something is as it is, you learn to know when and where something fits and doesn’t fit. Knowing WHY is the critical element in avoiding traps of a likely unappealing outcome.  

They won’t see it until it’s too late

The person who is represented by a trained agent is at a disadvantage. They won’t know the consequences until they feel them, and their agent won’t see what’s coming until it’s too late…for the client. 

All transactions are not alike.

You can protect yourself from paying the price of education for your real estate agent or attorney by listening for what they don’t know. You can tell if they are trained or educated. The trained person has few ideas. They can’t explain WHY they do what they do, other than to say, that’s the way I was trained…or that’s that way our company does it. The trained person is probably well versed in lead generation and manages a lead capture system. They do this, that, and the other thing, and when they capture a lead, they do what they’ve been trained to do the way they’ve been trained. You may never know the cost you paid for this training. 

Expect More

Expect the real estate professional you hire to have ideas about using your strengths to your advantage. Expect them to know you are not the same as the client they once had who did X, Y, Z. Expect them to be able to see what’s hidden and clearly explain complex scenarios. You will get what you pay for, and you will pay for what you get. At Essential Real Estate, we think you should be the beneficiary of our investment in learning. The results of our clients’ experience prove we exceed expectations. 

Merrian-Webster changed their definition of racism

We can’t talk about the American experience of prosperity in the decades after World War II, without recognizing the prosperous impact of homeownership. And to that, we are wise to acknowledge segregation eliminated the opportunity for black Americans to prosper as the white Americans who were not living next door. The mood is right in the world today to raise our understanding of the eternal consequences of our actions.    Merriam-Webster (the dictionary people) just took a giant step in changing racism’s discourse by modifying their definition of racism to include systemic oppression. When an institution is trusted, respected, and looked to as reference turns how they define racism into thorough recognition of consequences, we are on our way to a more excellent dialogue.  

The strength of definitions is their inflexibility. No one benefits from words meaning one thing under one administration and another under the next. Over time everything we believe is put to the test in the streets, in the classroom, and courts. The concept of racism was more or less understood and accepted in 1968 to be this but not that. It’s natural that given any boundaries, humans will work around the edges to push the limits and breach the walls until the definition of a word is no longer suitable because now what is openly racist is shaded by slight nuances. 

Examples of Begging Love Letters to Home Sellers

Twice in my career, love letters to home sellers became the go-to idea Realtors turned to as a way to give some of their buyer clients an edge in competitive markets. Today we are seeing home sellers request letters be included with Offers to help the seller select the people who will be the right fit for the neighborhood. Some people need to know more than how favorable the price and terms to show a person’s commitment to getting safely to closing. And if that need to know includes what they believe (Christmas=Christian, Family=male dad, female mom, at least one child, and a pet, higher education=better fit, etc.), the decision to negotiate has everything to do with discriminatory factors.   

The intent may not be crystal clear.

Every person who wrote a letter to appeal to the sensitivity of a home seller did not intend to violate Fair Housing laws. Every Realtor who encouraged and helped clients write letters, or helped home sellers select the lucky buyer based on the buyer’s messages and photos is not racist. But every note and every chosen picture included for the seller to consider has an intent. And it is that intent a licensee may get the opportunity to prove or defend when they facilitate a decision to negotiate with this buyer but not that buyer on factors that are unfavorable to a protected class. 

It’s Not Always Easy to See

A Google search took me to this page of Dear Seller Letters. I’m not going to say what I think is easy to see. Read the letters and decide for yourself if the letters play into the systemically oppressive attitudes that have forever kept black and other minority Americans from owning homes they are well qualified, prepared, and committed to owning.