The reason to start a business is to solve a problem other people have. All different intents are outcomes. I’ve never heard anyone say; There are too few real estate companies. We need one more. My son Patrick and I set out to apply our skills and talents to solve a problem, and it didn’t take long for us to identify a solvable situation.
Inspired by the ideas of Seth Godin, Simon Sinek, and Malcolm Gladwell we began by asking “Why” questions. Why do brokers charge 6.0% commissions? Why do homeowners pay 6.0% commissions? The answers lead us to ask “What” questions. For example, What do brokers do with the commissions they collect? What do home sellers use to pay the broker’s commissions? What do home sellers get for the commissions they pay? More or less, the answers looked like this: Brokers charge 6.0% commission because home sellers are willing to pay 6.0%. The commissions are paid from home equity savings earned by the homeowner and spent to support other people’s lifestyles. So, what’s the problem? We believe the problem in need of a solution is as homeowners, we pay an unfair share of our home equity for overpriced real estate service from under-skilled practitioners who provide no discernable service difference, all of which achieve the minimum standards of the law.
Essential Real Estate Solves The Problem of Excessive Equity Loss
Broker commissions are a form of a regressive tax. Six percent of a $400,000 is $24,000 for everyone who sells a home for $400,000. The regressiveness is that the $24,000 is not 6.0% of the home equity held by everyone who sells the $400,000 house. It is 6.0% of their equity of they owe ZERO, but few homeowners owe nothing against their home. A typical seller of a $400,000 home might have $100,000 to $200,000 in equity. At 12% to 24% of a person’s equity, that broker fee is significantly more of a burden.
Take Control of Your Equity and Expenses
Homeowners pay dearly because of two false beliefs about real estate commissions. (1) Real estate agents don’t decide which homes their clients see based on the commission offered to them. The same buyers who would see your house if you promise to pay 3.0% to their agent will see your home if you offer 1.0% commission to their agent, and there is no evidence to prove otherwise. That’s nonsense, and we can get more into why I know that’s a false assumption. (2) Commissions are not heavily invested in marketing your home. The lion’s share goes toward real estate broker self-promotion, capturing more buyer and seller clients, company overhead, staff, and lifestyle choices.
The listing consultation you receive from us shows you how to take control of your home equity and your selling expenses. If controlling the spending of your capital sounds like a good idea to you, talk to us. Anyone can sell your home. We make sure the transaction is negotiated to your advantage with you keeping more of your home equity.
Essential Real Estate, LLC Leaving you with control of your home equity.