Served exclusively at The Agency
So, how is the current model broken? There are many problems with the current model, but here are our primary concerns:
1) When you hire a real estate agent to sell your home at 5 to 7 percent, you're actually offering two commissions (customarily, the listing agent will offer up to half of his/her commission to the cooperating agent who represents the buyer). If you are hiring just one agent to represent you, why should you pay two commissions? Shouldn't the agent that actually procures the buyer receive the greatest compensation? In the current model, the listing agent charges the seller a large enough commission so that he/she can make as much as, or more than, the agent who actually sells your home. At The Agency, you can select from a variety of services on The Menu, paying us for only the services you require while offering a cooperating agent fair compensation for bringing you a buyer. With our model, you will save thousands of dollars in real estate commissions without losing out on quality, professionalism and sound representation.
2) Initially, a small percentage like 5, 6 or 7 percent doesn't sound very significant. Even if you calculate the actual dollar amount of a particular transaction, a $25,000.00 commission doesn't sound so high when you're selling a $500,000.00 home. But in order to truly understand how sizable a 5% commission is, you need to take a closer look. Many homeowners don't have more than 10% to 20% equity in their homes. For the sake of our example, let's assume that you have 10% equity in your $500,000.00 home ($50,000.00). If you sell your home for $500,000.00 and pay a real estate commission of $25,000.00, you will give a whopping 50% of the equity you have in your home to a real estate agent or agents. It's your home. You've made the mortgage payments, paid the taxes and the insurance, maintained the property and lived in it for the past 5+ years. Doesn't it seem a bit excessive that, after a real estate agent spends roughly 90 to 120 days helping you sell your home, he/she is entitled to half of the equity in your home? Your home is probably the biggest investment you will ever make. At The Agency, we will never forget that.
3) Let's pretend that you have a $500,000.00 home and your friend has a $250,000.00 home. You both hire the same real estate agent to sell your homes and you both offer him a 6% commission. Your agent lists both homes on the MLS, places both homes in all of his print and online advertising, places a sign in each yard and a lockbox on each door, holds Open Houses once a month, and schedules an average of 10 showings a month per house. Within about 45 days, he receives offers on both homes, he negotiates acceptable contracts, helps schedule appraisals, inspections, and walk-throughs and troubleshoots each sale to a successful closing, both within about 90 days of the original listing date (working roughly the same number of hours on each transaction). At the closing of your friend's home, your agent collects a check in the amount of $15,000.00. At the closing of your home, your agent collects a check in the amount of $30,000.00. What exactly did your agent do for you that made his services twice as expensive as the services he provided your friend? Answer...absolutely nothing! At The Agency, The Menu offers a variety of fee-based services to each of our clients. You pay us for only the services we provide at the amount that those services are worth, regardless of the price of your home. You will no longer be penalized for having a valuable home.
4) In the "all-or-nothing" approach to real estate sales, the consumer has no choices and virtually no control over the transaction. You either get "full service" or "no service". There is nothing in between. At The Agency, you can choose from a menu of services, and you only pay us for the services we provide, nothing more. As a client of The Agency, you will no longer pay for services that you don't need. Together, we will determine your individual real estate needs and objectives, and together we will decide which of our services will best help you meet those specific objectives.
As your professional real estate consultant, we will guide you through the process, not decide for you. We will tell you our professional opinion, not sell you anything. In the future, the real estate consultant is going to replace the real estate salesperson, and The Agency is leading the industry in providing our clients with an improved real estate model that is consumer friendly, not commission friendly.