Nashville Flat Fee Realtor Guide For Homeowners
This guide will fly in the face of what many of you believe about real estate. I will share facts and give you my strong opinions without the glitz and glam of a sales pitch.
Over the years, I've seen where Nashville homeowners made and lost money. I've witnessed middle Tennessee homeowners fall victim to the hype of flashy real estate sales people or sensational over the top real estate ads. From "Guaranteed Offers" to "Reduced Commissions" these sales gimmicks are the tools of unscrupulous real estate sales people that convince homeowners to pick up pennies while leaving dollars on the table. Based on my experience, I believe this is caused because most Nashville homeowners just aren't as informed as they should be before they list their home for sale. It has never been a better time to have open, honest and transparent dialogue with your so called "trusted" real estate agent. Rather than solely focusing on how much your Realtor can get or how fast they can sell your home, why not include a conversation about how they can help you keep more of your hard earned home equity. It's also time for Nashville homeowners to start looking for true local real estate professional and not some sales person that's simply selling a house to charge you an expensive commission.
Selling A Home Can Be Expensive.
Did you know, on average, it can cost a Nashville homeowner approximately $20,000.00 to sell their middle Tennessee home? This number includes minor home repairs like; fresh paint, carpet cleaning, pressure washing and fresh landscaping as well as real estate agent fees, commissions, closing cost, inspections and attorney fees. At the end of the day, that's a lot of money. What many homeowners discover is that the largest chunk of that $20,000 are the real estate commissions paid to the real estate agents. For example, if the average home price in Nashville is $270,000 and you pay your listing agent a gross sales percentage commission of 6%, that means you are paying $16,200 in commission. Another way to look at this is, 94% of your cost to sell your Nashville home is real estate agent commission.
Don't forget, all of that comes directly out of the purchase price of your home or in other words, your home's equity. If you haven't lived in your home for long or the market takes a nose dive and you don't have much equity in your home, you could end up closing a deal where the agent made more money than you did.
How the gross sale percentage commission (traditional commission structure) really works.
It's been my experience that most homeowners don't really know or understand how the real estate commission structure works. When I charged my clients a gross sales percentage commission I often heard questions like.....
"My home is in much better condition than my neighbors but, I'm still paying the same in commission, why?" or,
"My home will sell for $300,000 and I will be paying twice as much in commission than my sister whose home will sell for $150,000. Why? Are you doing twice as much work?" or,
"Why is your commission so high?"
These questions and many others like these are constantly asked by homeowners. Make no mistake however, it's not because sellers and buyer don't want to pay a reasonable real estate fee for quality service, it's that they don't understand what it is that they are paying for.
When you pay an real estate agent by commission, you should understand, you are essentially paying them by contingency. More specifically, the real estate agent makes nothing if they don't sell your home. When a real estate agent takes on a listing and is only paid upon successful closing, that agent is taking on all the risk that the property won't close. With such risk, comes a high reward. It's actually very similar to a personal injury attorney who only get's paid on wining your case. Like the attorney, the agent is putting in hours of work, paying out hundreds, if not thousands in marketing cost, with the possibility the home will never close. At the end of the day, paying your agent by commission makes their income dependent on a favorable outcome, of which they can influence but, not control and for that, you will pay a premium.
NOTE: Any and all references to commission or percentages are strictly hypothetical and for educational and informational purposes only. I'm in no way conspiring, suggesting, implying or eluding with or to anyone to set rates or fix fees. All real estate commissions and fees should be the result of vigorous negotiates between agents and their clients.
The Technological Revolution Is Here.
The way we list, market and sell homes is being disrupted by the technological revolution the real estate industry is currently going through. Specifically, real estate websites, smartphones, and apps are bringing forward choices and options the consumer has always had but didn't know about. Even with this technological shift within the industry and consumers being more informed than ever before, the "old way" of listing, marketing and selling real property through a traditional gross sales percentage commission is still the vast majority of transactions today. Once again, I believe this to be the case because, most homeowners just simply don't know, they have options when it comes to paying their real estate agent.
Between internet data exchanges, national and international syndication along with consumer education sites much like this one, the days for traditional methods of selling your home are numbered. People like yourself are becoming more aware and more interested in saving thousands or are looking for more budget friendly options and Brokers like myself are stepping up to answer the call. Enter the Nashville Discount Real Estate Broker. Below are just a few of the alternative real estate agent commission structures you are likely to find here in Nashville and middle Tennessee.
Different Types Of Discount Real Estate Brokers.
Low Percentage Commission
Low Percentage Commission Brokers: These are Real Estate Brokers who include a traditional full suite of services however, charge a lower percentage to list, market and sell your home versus the majority of agents in your market. Brokers who charge less than the more common fee in your area. You've seen them advertising 1%-2% in listing fees. You need to keep in mind, these Brokers will still typically ask you to pay the cooperative agent or selling agent a percentage more reflective of what the most commonly earned commission in your area is. As such, in reality, it's not really 1% you are paying. It's typically much more than that. Don't get me wrong, you do end up paying less than you would have with a traditional percentage commission agent however, don't be fooled by the 1% advertising, you will never just pay 1%.
Finally, it's very important to understand, with a low percentage commission, most of the time, they are a full service brokerage. In other words, even though you aren't paying the expensive commission of a traditional brokerage in the area, you should most definitely be receiving the same level and quality of service. Low percentage commission Brokers often times have the ability to offer the same, if not better quality of service and almost always the same level of service as their more expensive counterparts. From preparing your CMA, to carrying adequate professional insurance, a low percentage commission Broker should be fully equipped. They make their money on volume of deals done each year, not necessarily off any one single deal.
Flat Fee Full Service
Flat Fee Full Service: These are Real Estate Brokers who include a traditional full suite of services however, charge only a "Flat Fee" to list, market and sell your home. This flat or fixed dollar can range widely from Broker to Broker however, the fee is often advertised, disclosed upfront, agreed upon and paid before real estate services are offered. Some Brokers will offer to do free CMA or even on-site home valuations however, for the most part, the fee must be paid first before any marketing is completed. It's also important to know, unlike low percentage commission Brokers, Flat Fee Brokers will ask you the seller, if you want to offer a cooperative commission and if so, how much. Here is one of the key difference between Flat Fee Brokers and all the other Brokers we will be discussing. With a Flat Fee Broker, it's possible to save thousands, if not tens of thousands of dollars in real estate agent commission while still getting the same, if not better quality of service.
Liberty House Realty LLC, a local Nashville Tennessee Real Estate Brokerage, offers a flat fee full service home listing option to Nashville homeowners. Homeowners who take advantage of the flat fee full service home listing options will not be charged a commission in the traditional sense. Instead, we charge a low $999.00 upfront fee while still offering a full suite of full suite of bundled services, exactly what you could expect from a more common gross sales percentage commission agent.
The flat fee listing promotion helps homeowners keep more of their hard earned equity. Our goal is to liberate homeowners from expensive real estate agents. We offer the same products and services of a traditional agent while providing a 5-star quality service.
Flat Fee a-la-carte
Flat Fee a-la-carte: These Brokers don't include a full suite of services as part of doing business with them. These are Real Estate Brokers who offer a a-la-carte menu of services. The homeowner is only charged for services they purchase upfront or at time of service. The seller will choose from a list of available services and pay for those services individually. Similar to the Flat Fee Full Service Broker, you will be given the option to include a cooperative commission and if you chose to do so, you will get to also decide on how much to offer. It's important to understand, these "a-la-carte" services can save you an incredible amount of money however, if you aren't careful, they could also cost you more than going with a traditional Broker in your area. Don't misunderstand, their fees are almost always disclosed, upfront and agreed upon however, you may find you need services outside of what they are willing to do and you may end up having to hire a 3rd party or an Attorney to complete the sale, gather forms, etc... and of course, that will come with fees associated.
2 for 1 or B.O.G.O.
2 for 1 or B.O.G.O.: These Real Estate Brokers offer to list your home for free, only if you buy a home of equal or greater value with a minimum gross sale percentage commission with them. These Brokers are eliminating the seller's cost when selling the existing home, with one exception and, that is the cooperative broker commission. In other words, they will list your home for "free" however, you will still be responsible for paying any and all cooperative commission offered to the selling agent who brings the buyer for your home.
As part of this 2 for 1 deal, you then will be required to buy a home through with the Broker, at or greater than the purchase price of your original home. This way, the agent is taking a "commission" on your purchase which will hopefully be greater than your sale. You just need to remember, it's a 2 for 1 so, if you don't buy with them, they will not sell your existing home for "free" so to speak.
MLS Only: For a nominal flat fee, these Real Estate Brokers offer to list your home in the Middle Tennessee MLS only. MLS Only Brokers provide no further assistance of any kind. They do not even offer a-la-carte services so the homeowner is required to do all other task on their own. MLS Only is for those homeowners who want to go "For Sale By Owner" however, want their home advertised in the local MLS for exposure. MLS only brokers do not help you set a price, they do not offer marketing services, they do not negotiate, they don't provide forms, they will not help with setting commissions. All a MLS only Broker will do is put your property in the MLS, that's it.