Control of Your Home Equity…Problem Solved

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 GodinSimon 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.

Compound 4.0% Commission saving Into a College Fund.

Calculate the growth of the commission you save with Essential Real Estate

You easily find options to pay 50% more in broker commissions compared to our 4.0% or less success fee. Essential Real Estate exists to be an option to receive expert transaction service along with significant commission savings.

The difference you save is yours to do with what you want. Had you paid it to the real estate agent that’s what they would do. We believe home sellers should have a choice to keep more of what they earned in home equity by paying less in sales costs. The thousands of dollars you save with Essential can grow into something more substantial. Mutual Fund Average Return Examples 2019 can’t be counted on to exist into the future but they work for projecting. Using historical data let’s assume a sales price of $350,000 and commission at 6.0% v. commission at $4.0% plus $499. We will use a projected return range above and below 9.0% annually over 15 years. This Compound Interest Calculator Investor.Gov shows the potential growth. Your commission savings return is certainly a good start on an college fund, a down payment on a vacation property, or an all expense paid world tour.

*Assume a sales price of $350,000 where the owner pays a 6.0% commission of $21,000.00. In some neighborhoods the median time on the market is 8-9 days. Compare the same scenario to Essential Real Estate’s 4.0% success fee of $14,000 or less, and $499 listing fee. The savings of $6501.00 invested in a mutual fund growing at a rate of 5-13% grows into a healthy college fund while a 3 year old grows into a college student.