Traditional Brokerage Examples -
A) House A is listed for $250,000 @ a 6% Commission with Traditional Company with $300 Adminitrative Fee. Sells in 270 days
Cost to Seller = (250,000 x 6%) + 400 = $15,400 in Real Estate Fees (Doesn't include taxes and title fees) for 9 months of work.
B) House B is listed for $150,000 @ 6% Commission with Traditional Brokerage with $400 Administrative Fee. Sells in 60 days.
Cost to seller = (150,000 x 6%) + 400 = 9,400 in Real Estate Fees (Not Including taxes & title) for 2 months of work.
Same Examples Using Shrewd Real Estate -
A) House A is listed for $250,000 - $500 Listing Retainer, $1000 Selling Agent Commission & 3% Compensation to Agent with Buyer. NO Adminitrative Fee. Sells in 270 days
Cost to Seller = (250,000 x 3%) + 500 + 1000 = $9,000 in Real Estate Fees (Doesn't include taxes and title fees) for 9 months of work.
B) House B is listed for $150,000 - $500 Listing Retainer, $500 Selling Agent Commision & 3% Compensation to Agent with Buyer. Sells in 60 days.
Cost to seller = (150,000 x 3%) + 500+ 500 = 5,500 in Real Estate Fees (Not Including taxes & title) for 2 months of work.
Shrewd is Going to Bring Selling Homes up to the Times.
It turns out that Al Gore invented the Interweb some time ago and we are getting quite effective at using it as a society. According to a Business News Daily article posted on July 2nd. 2013, the average American spends approximately 23 hours/week doing online activities (link to article). That's almost enough time to ask for benefits. But with all the technology changes, have we been able to truly reap the benefits in the real estate world?
You bet we have. Think about how much harder it was to get information about a property just 10 years ago. Realtor.com was just starting to get traction, but there weren't many of the other sites available that we've come to know and love (Trulia.com. Zillow.com, Yahoo Real Estate., Etc.). Just a decade ago, getting more than a couple of pictures of a house was a task. Now, if you know where to go, you can get aerial photos, as well as multiple interior pictures and sometimes even the vaunted virtual tour. You can also now take a picture of a house with your phone and there's an app to get an estimate of the home's value in just a couple of seconds.
So how have real estate companies offset these new costs that are incurred by advertising online. A lot of them have gone to charging sellers above and beyond the commissions agreed to in a listing contract by adding on a Broker's Administrative Fee or Brokerage Commission. This fee can be as high as $500 for some brokerages in Central Minnesota!
What then is the rest of the commission for? If the Internet is where everyone is going to find out about homes, and real estate companies are getting this money to cover these costs outside of normal commissions, what does the other money go to?
Paying Off Coop Brokerage - Billboards - Office Space/Supplies - Just Sold Mailers - Newspaper Ads - Home Magazine Ads - Agent's Income - Brokerage's Income - Etc.
How much of this stuff really helps you sell your home? Some. I don't think the fancy office building and the just sold mailers help much, but paying an agent that brings you a qualified buyer is definitely a good idea. I also know that agents and companies need to make a living, otherwise they wouldn't do what they do. But, what about the other advertising choices. Would you rather help a company pay for its billboards and plush office space or are you willing to meet at a local coffee shop and save a couple thousand dollars?
At Shrewd Real Estate, we give you the choice. You can definitely select the full package and help buy a billboard and rent an office space. Or, you can just choose more of a basic package and spend some money on paying an agent who helped bring you a qualified buyer. The choice is yours. View the pricing chart here.
So how does this work? At Shrewd Real Estate we charge a $500 MLS listing retainer to allow us to advertise the home for sale for one year, a much smaller commission at closing to help your agent pay their home mortgage (agents gotta make a living too), and the biggest expense will be paying the agent who actually finds a buyer for your home. Beyond that, if you want an open house, you need to pay for it. If you want us to send just sold mailers to your neighbors after you've moved out, you need to pay for it. It's really pretty simple.
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