About that 6%
Everytime a house gets sold, 6% gets pocketed by the Real Estate Agents (3% to the selling agent and 3% to the buying agent). 6% commission sucks. Americans pay twice the commission fees than any other developed country in the world. If the commission rate was lowered to 2%, Americans would save ~$60 billion annually.
According to the Consumer Federation of America, real estate brokers act "as a cartel that tries to set prices and restrict service options.” Even aggregating sites like Zillow are plagued with Realtors -- it has become a middleman for the middleman.
For the 10% who are bold enough to go For Sale By Owner (FSBO) there is a lack of tools to help homeowners market and connect with home buyers. The real estate market is forced to choose the lesser of two evils.
Banged for the Buck
The average price for a house in America is ~$300,000. This means Realtors will cut ~$18,000 from that amount. That’s a lot of money that you’re paying interest on.
So what value do real estate agents bring for ~$18,000? Generally, Realtors have two basic functions:
- Marketing: Listing, staging, Ads & Promo, and hosting open houses
- Selling: Negotiating, closing, and paperwork
If things go well, a house gets sold in 60 - 90 days. That means you're burning ~$250/day. It's no wonder why housing is expensive.
“The high fees might make sense if residential Realtors always offered an extremely valuable service. But according to NAR itself, most buyers do the work themselves, spending months on the Internet identifying attractive neighborhoods and homes before calling a real-estate agent simply to open the door.”Wall Street Journal
How would you spend $18,000?
The bottom line is that you should not be spending tens of thousands of dollars on an adult version of Show & Tell.
Join The 1% Club
We’re on a mission to lower commission to 1%. We can do this by marketing and selling your property at scale using technology. We have a background in Economics and Machine Learning from MIT and Columbia. We've also built the platform that 70% of MLSs rely on and contributed to the Case Shiller Housing Price Index (HPI) that is used by the Federal Reserve.
We'll guide you through each step of the home buying journey.It's easier than you think.
Discover a property's Suggested Estate Price by texting [address] to (650) 297 0792.