Tag: equity

Our fee is $499 and 1.0%. We charge that to be sure you keep more of your money.

The reason you went into business selling services to customers was to make a profit. Elizabeth Wasserman, Editor Inc. Technology.   I respectfully disagree. tom meyer, essential real estate.

Making a profit is one possible outcome of being in business. Solving a problem that other people experience is the reason we started Essential Real Estate, LLC. The firm is profitable because it solves the problem of losing home equity on broker fees and negotiating flaws. The problem is simple: You pay real estate broker fees and selling concessions from your Home Equity. If your equity is $100,000 when you sell your home at full price, and $95,000 if you accept $5,000 less, and your broker charges a 6.0% commission on the sale price, a $400,000 sale will cost you 25% of your equity.   

Two Ways To Reduce Your Losses

Home sellers who don’t know more than their agent about how the real estate business work will lose money by making unnecessary concessions, believing myths, and giving away their negotiating strategy. Home sellers who have no choice but to pay the going rate will spend more than they might want on real estate commissions. The two ways to cut your expenses and keep more of your home equity dollars begins and ends with the ability of your agent and your agent’s reason for being. Homeowners ask real estate brokers, “What’s your commission?” They should ask the critical question, “Why is your commission X%?”

We Set Our Fee to Make Sure You Keep More of Your Money

I don’t know what fees each company charges. I also don’t know why anyone charges the fee they charge, but I assume the price was set to generate enough revenues to exceed expenses by enough to end the day with a profit for the owner. Maybe the cost of the service is set to match the level the market will bear. Perhaps it’s a combination of factors. From my 31 or so years of experience in real estate, I believe the market pretty much accepts a six percent broker commission to sell homes. From the same experience, I know firms set their revenue projections relative to the profit they intend to make. Before there is profit, expenses have to be covered, or costs reduced. We chose to limit our expenses by excluding wasteful spending on non-essential services and gimmicks. By doing this, our clients pay about 56% in fees. By being exceptionally good at structuring transactions to our clients’ favor, home sellers who hire Essential Real Estate make more money by avoiding traps and contract deficiencies. 

Essential Real Estate. A Free Market Choice by the Numbers.

Compared to 4.0% a home seller who pays a 6.0% commission will pay 50% more money from their equity. Saving that equity is now a choice.

For a market to be free there must be a choice on both sides of the transaction. Do we have a free market real estate service economy?
Maybe.

Real estate representation is a licensed service. The standard of performance is the same for every real estate licensee. There is no choice as to which legal obligations a licensee will perform. There is a minimum standard though, and we expect some licensees to rise above the minimum to be a choice of higher-skilled service for the consumer.

What about the price? As long as the consumer is willing to pay *6.0% broker fees the market will be dominated by firms that choose to offer the same real estate licensed service for the same 6.0% price. Eventually either the consumer will demand a range of prices for the legally obligated services or licensees will choose to structure their business model to be profitable and sustainable at an alternative fee.

Essential Real Estate, LLC was created in 2019 in Madison to be a free market choice for home sellers who want to keep more of their home equity by spending less on broker fees. These are the numbers.

When the fee of choice tends to be 6.0% of the sale price the regressive nature of the “tax on value” hits those who can least afford the fee the hardest.

$400,000 Value. $300,000 mortgage. $100,000 equity
$400,000 x 6.0% = $24,000.
$24,000 is 24% of the equity.

OR

$400,000 x 4% = $16,000
$16,000 is 16% of equity.

To pay a 6.0% commission the home seller will pay 50% more money compared to a 4.0% commission.

50% more, in this scenario, is $8,000. By moving that $8,000 back into the hands of the seller the difference is impressive:

The $8,000 is a 33.3% reduction in the price of the commission.
The $8,000 is a 10.5% increase in retained equity.
The $8,000 applied to the next down payment will reduce a monthly payment on a 30-year mortgage at 4.1% by $39.
$39 per month is $468 per year
$468 per year for 30 years is $14,040.00

Finally, home owners have a choice to pay less in selling commission and keep more of their home equity. Essential Real Estate has set the market free.

Listing fee: $499 at signing. Commission of 4.0% or less due at closing. We will show you how to make that 4.0% less.

* The Internet Didn’t Shrink the 6.0% commission

Essential Real Estate v. Anybody: Compare Your Equity Savings Here

Let’s keep it simple. In 1963 residential real estate commissions were typically 7.0% of the purchase price. Today, Zillow says they’re about 6.0%.

Commission down 14%. Zillow says the Median Home Value is up to $285,000. Census.gov shows the median value was $17,000. Is it possible the broker fee was about $1,200 in the summer of ’63? It’s $17,100 today.

We pay 100% of our broker fees from our Home Equity. Home Equity is savings earned. If the median home seller has a typical home equity of $50,000, broker commission is going to consume 34.0% of their equity.

And that’s just the cost of fees. We haven’t looked at the costs of under representation and negotiating flaws.

Essential Real Estate is created with an aim to increase your home equity savings by 33%. They surpass that with real estate contract law knowledge and skills.

Keep 33% More of Your Home Equity…for yourself. Essential Real Estate, LLC

Home equity is money you earned and saved. To accumulate equity in your home you made choices to sacrifice one thing or another. It’s money you invested in your home. That’s personal. You’re going to one day want these funds to use for another life experience such as buying another home, or settling an estate.

When access to home equity require you sell your home, sales fees and transaction costs will all be paid from your Gross Home Equity. If your equity is $100,000.00 and your expenses to sell are $20,000.00, you just paid 20% of your earned equity to other people. If you’re like typical Americans your equity might be closer to $50,000.00 and in that case 40% of your equity is destined to become other people’s money. Here’s a brief video to explain what we’er saying.

Paying 20% – 40% or more of your savings might be a wise choice, but if it’s not I believe you should have a choice to keep more of your savings in your hands. Anytime we pay more than necessary to receive less than expected there are consequences; having less than we could have is certainly one. We all face this problem when selling our homes.

To be part of the solution I designed and created Essential Real Estate, LLC intentionally to increase the amount of home equity that stays with you after the sale by at least 33%. Depending on fees charged by other firms that 33% could be $6,000.00, $8,000.00, $10,000.00 or more. Like you, I believe hard earned money should remain with the person who earned it.

Home equity is your money. You earned it. Essential Real Estate ensures you have a choice to keep more or your money. And we do this through fair fees, guarding your confidentiality, providing better negotiating alternatives, customized contract analysis and explanation, and clear transparency into the real estate transaction. Total compliance with Wisconsin Real Estate law is guaranteed.

If saving your equity is an advantage to you let’s talk. Email: Tom@TomMeyer.com. Text or Call 608-332-8331.