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Johnson Realty vs.
Traditional 6% Full Commission Real Estate Companies
The biggest issue facing traditional 6% Real Estate Companies like Coldwell Banker Gundaker, Re/Max and Prudential is their business model is based on large numbers of agents listing and selling very few homes with one or two superstars. This means that listing agents have to charge very high commissions up to 6% or even 7% of your sales price to make any money for themselves and their broker. Big companies will usually hire just about anyone with a license because they figure if a new agent can sell 2-3 homes a year, they provide income to the company. Most agencies take up to 50% of the listing agent’s income while other “desk fee” companies take a monthly fee usually around $1000/month. So the more agents they have, the more money they can make.
The other problem is that they have been using the same tools and techniques for many years, so they have a difficult time adjusting to new trends and new technologies. With more and more buyers realizing that the MLS is what you really need to sell a house, it’s becoming very hard for a traditional agent to justify lowering their price. A typical agent when listing a $200,000.00 home will receive a 6% commission for selling the house. 6% of $200,000.00 is $12,000.00. Half of that goes immediately to the Buyer’s Agent which now leaves $6,000.00 to the listing agent. From there, another 50% is split with the broker, so now the agent is left with $3000.00 of income. Out of that $3,000.00, the agent has to pay their MLS and Realtor fees, plus fees for any additional marketing, publications, open houses, etc. If they only sell a few houses a year, there is not much money left, and even less, if they offer a discount. This is why you see so many agents from OTHER companies list their own homes with Johnson Realty.
What does this mean to you? A traditional 6% agency has all the same tools that we have at Johnson Realty but instead of lots of agents listing a few houses, we have a few agents listing a lot of houses. Think more in terms of an assembly line. This is how we can offer a lower price and still offer the same marketing tools that work and provide all the service you need at closing. It is important to know that there are a few things we don’t do that a 6% agent might do. 1) We don’t attend the closing. The main reason agents go to the closing is to receive their check. We carefully review each settlement statement before you ever see it, so there is no reason to waste 3 hours of our day watching you sign your documents. 2) We don’t do open houses. It is important to know why agents do open houses. They do them NOT to sell your house, but to bring in buyers that are NOT working with agents. That way they can take the unrepresented buyers to other houses and get the back-end commissions. Open houses only account for 2% of all sold houses so we recommend doing them on your own. If you really think it will help sell your house, we will do them, but at an additional fee. 3) We don’t provide feedback. If you want your agent to call you once a week and tell you why your house did not sell, then you probably need a 6% agent. The only agents that have time to call other agents and ask what they liked or disliked about a house and then call you, are NOT busy selling houses. They need to fill up their time in the day, and make themselves feel needed. If you want feedback, you will have a sign-in sheet or a Supra log and you are more than welcome to call agents or buyers, but all you will likely here is, “I don’t remember, we saw 10 houses that day. My clients didn’t like it.” You will not hear things like, “I loved it, too bad it was $5000.00 out of our price range,” or “We would have bought it if it had a new dishwasher.” You can expect. “It didn’t have a basement, and we want a basement.” You are likely not going to put in a basement. You have to be patient for the right buyer to come along, and they will come along just as you did for your house.
It is important to remember that the internet has changed everything and the power is in the buyer’s hands. You need to get your house in front of buyer’s and that means..on the MLS, on the internet and having a sign in your yard. Offer a fair buyer agent commission, and make sure you align yourself with an experienced and knowledgeable agent to help you through the contract process. Our closing agent handles hundreds of transactions a year, while most agents won’t see that many in a lifetime. Do you want your friend or family member to help with the biggest investment of your life, or a professional? That’s why Johnson Realty truly is A Better Way!
