Real estate agent commissions are in the midst of a change. For decades, the traditional 6% commission was split between buying and selling agents. However, with the evolution of the internet and technologies that rely on it, home buyers, home sellers, and real estate agents have more resources to use when buying and selling homes. These resources make the process easier and more efficient for the agents and allow home buyers and sellers to do some of the work themselves. How can agents currently justify taking 6% of the price of the home for what appears to be less work on their part? In anger and frustration, consumers are beginning to search for alternatives.
The Internet Empowered Buyers
Buyers used to completely rely upon a real estate agent to help them find homes that were for sale. Agents had access to the Multiple Listing Service (MLS) and would use it to find a list of homes for their buyers.
With the Internet and online sites such as Trulia, Zillow, and Realtor.com, buyers now have access to much of the MLS data and are searching for homes on their own. They no longer rely on realtors to find them a home. Instead, they just head to an online site, put in specifications that match their needs, and watch homes pop up on their screen.
The Internet Empowered Sellers
Sellers also now have access to information that used to only be in the hands of agents. This information can be found through online real estate sites, specific realtor’s websites, city/county sites, and more.
Can see what homes are for sale in their area and for what prices.
Can get an understanding of the market by seeing how many homes are for sale and how long the homes stay on the market.
Have access to marketing sites specifically for homes.
New Fee Models Emerge
As buyers and sellers begin taking on some of the tasks of an agent, they no longer want to pay a commission based on the sales price of a home. That has led to many new models of realtor fees, but only one model that gives buyers and sellers what they need at a price that makes sense.
- For Sale By Owner (FSBO): Many sellers erroneously believe that FSBO sales are free and only require some sweat equity. The truth is that FSBO sales can be quite costly, including professional fees for photographers, stagers, printers, and lawyers, as well as fees for listing on the MLS, major online sites, signs, and more. Even more importantly, those that sell on their own usually fail. A recent statistic by the National Association of Realtors shows that 88% of FSBO homes do not sell and eventually need an agent.
- Discount Brokers/Flat Fee MLS: For sellers that believe that the only value a listing agent brings to the table is the MLS, they sometimes choose to use a discount broker, sometimes known as a flat fee MLS broker. These services merely add your property to the MLS database for a flat fee and offer few other services. In essence, this is just an enhanced FSBO. Even with the addition of an MLS listing, most sellers that go this route struggle.
- Flat Fee Full Service: The problem with the previous models is that sellers do not understand what an agent can do for them. If an agent’s value was simply the MLS, then these models would work. However, agents provide more than a simple MLS listing or the ability to search the database. This has led to the newest model known as flat fee, full service. In this model, offered by Recadia, buyers and sellers get all the services offered by traditional agents but at a fairly priced flat fee.
Why Flat Fee, Full Service is a Good Choice
The truth is that agents bring a lot of value to their clients that goes far beyond the MLS and what can be found on the Internet.
Listing agents provide:
- Knowledge about the variables to consider when pricing a home
- Marketing knowledge and experience
- Dedicated platforms to market your property
- Ability to tell qualified buyers from unqualified buyers
- Negotiation skills to help you turn a mediocre offer into an offer you can accept
- Legal contracts that are binding
- Solutions to problems that keep a property from getting to closing
Buyer’s agents provide:
- Ability to see issues before they arise, offering solutions that work
- Access to experts that can help buyers such as lenders, appraisers, and inspectors
- Find properties for sale that are not listed on the MLS
- Understanding of what makes an offer acceptable in different situations
- Knowledge of contingencies you should have in an offer to keep a buyer safe
- Ability to negotiate to satisfy both the buyer’s and seller’s needs
There is no doubt that brokers add value, but the manner in which they provide services for the consumer has been streamlined in recent years due to technology. Recadia understands this and utilizes technology to improve efficiencies and passes the savings onto their clients through the flat fee, full service model.
For a reasonable, fairly priced flat fee, Recadia agents do everything traditional brokers do for buyers and sellers. Now, both buyers and sellers have the option to use an agent without paying a fee based on the sale price of a home. Instead, they can pay a fee based on the value an agent brings to the table.
To learn more about Recadia’s flat fee, full service model, you can read How Recadia’s Flat Fee, Full Service Real Estate Model Can Save You Thousands of Dollars on Real Estate Commissions. You can also give us as call at (214) 281-8500. We would be happy to help you with your home buying and selling needs.