3% Total Commission

Full Service Broker – 3% Commission – Why Pay More?

“Paying higher commissions does not lead quicker sales or higher sales prices. On the contrary, the more money you commit up front to commission payments, the less room there is for negotiation to effect a sale.” – Ray Guenther, 2018

3% + $495  Total Commission!
Buyers Agent 2%
Listing Agent 1% + $495
$300,000 home through 3% Real E$tate commission charge = $9,495

Why We Are 3% Real E$tate

The 3% Real E$tate concept grew from my frustration over how home sellers picked their listing agents.  The process seemed so arbitrary.  Many times home sellers simply “gave” their listings to friends or family members.  The language here is so telling; the seller essentially “gifts” the agent the listing.  The agent is grateful for the listing but the agent does not “earn” the business.  On the other hand, while the home seller does not gain anything from choosing the friend or family member to list the house, they can easily rationalize their “gift”.

  1. Everybody charges the same price.
  2. I have to give the listing to someone.
  3. I might as well give the listing to my niece, Maria, since she has her Real Estate license.

After all, with nearly 200,000 licensed agents in Florida, everybody knows a Realtor.

They best way I could figure to disrupt the status quo was through pricing.  Maria “getting” the listing in the above scenario really starts and ends with the fact that everybody charges the same commission rates.  In order for me to use pricing to set myself apart, I new my price difference must be dramatic.  So I went to work building a business model from the ground up based on the lowest possible fees.  The result: 3% + $495 .  At nearly half the usual commission cost, 3% Real E$tate provides a true cost savings alternative.

Changes

The world has changed dramatically in the 20+ years since I entered the Real Estate business.  Median home prices in central Florida have doubled in this time frame.  In 1997, the only tool we had was the MLS listing book that came out monthly.  The internet data base was still a year or two away and if you had a fax machine it was kind of a big deal.  In 2020, On the other hand, agents have cell phones, electronic signatures, client management software and countless other software programs and tools of technology that save them time and/or expenses.  Yet with all these efficiencies feeding into the industry, very little has changed with regard to pricing?

Pricing

In 1997, I charged 6% commission to sell a $150,000 house.  The transaction paid $9,000 commission of which the buyers agent and I each received $4,500.  If I charge 6% commission today and sell that same house for $300,000, I receive $9,000 in commission.  That’s twice as much commission for doing the exact same job!

In the example above, not only does the 2020 listing agent make twice as much money as the 1997 listing agent, technology allows the 2020 agent to sell the house while playing golf, shopping or hanging out at home.  There is no other way to look at it, this has been a pretty sweet ride for Real Estate agents.

Part Time Agents

So you can see now why there are almost 200,000 licensed agents in the state of Florida.  At an average of $9,000 a deal, an agent can make a great deal of money working a few days a year.  It’s no wonder so many people get their Real Estate license.  If you have friends or family that will “give” you their business, why not grab it?  The lucrative nature and the ease by which commissions can be made has driven tens of thousands of Floridians to become licensed agents.   It should come as no surprise that there are so many Realtors.

Sphere of Influence & Part Time Work

The vast majority of Real Estate agents operate under the Sphere of Influence business model.

“A sphere of influence is pretty much everyone within your personal sphere that you can possible work with to sell or purchase a property. Developing a sphere of influence is the best way for real estate agents like you to ensure commissions. Within the sphere of influence, or SOI, is what’s called the sphere of influence business model. The SOI business model should work for any individual who partakes in sales activities no matter the industry. ”

-from the homevalueleads website| May 24, 2018

To put it bluntly, the sphere of influence model (SOI) calls for the agent to position themselves between friends, colleagues and family members when they intend to buy or sell Real Estate.  The SOI agent’s “practice” of Real Estate is more about opportunism than actually working a business model.  None of this develops professionalism, none of this develops deep experience, none of this develops any appreciable efficiencies.  What SOI marketing does develop, however, is an army of part-time agents – all out looking to get their share.  An army of part-time agents looking to capitalize on inflated commissions in no way serves the public good.  This is a broken system.  SOI marketing is fine for selling Amway or Avon but we are talking about the transfer of Real Estate, a fairly complicated legal process.

5%-6% Traditional Commission Structure 

The copious commission amounts available to Real Estate agents in the year 2020 are what sustains this part-time agent system.  At 5%-6% commission, home sellers  pay $15,000-$18,000 to sell a $300,000 house.  By anyone’s calculations, $15,000 to $18,000 is a lot of money.  These inflated commissions help support an inefficient broker-agent structure that is essentially unchanged from last century.  It’s time for more efficiency in Real Estate; it’s time for common sense commission fees.

The public will benefit in two ways:

  1. When home sellers pay less commission, home sellers retain more equity.
  2. When home sellers pay less commission, the business climate is less favorable for part-time agents.

3% Commission Model

3% Real E$tate is a full service Brokerage, a member of Orlando Association of Realtors as well as the Osceola Association of Realtors.  We are members of the MLS and the Kissimmee Downtown Business Association.  I have been a licensed Realtor since 1997 and a licensed Broker since 2001.  License #BK657563

3% + $495  Total Commission!
Buyers Agent 2%
Listing Agent 1% + $495
Saving Sellers Thousands!

We work professionally and efficiently.  We don’t “use” our friendships and relationships to extract business.  On the contrary, our mission is to use our business skills to create and strengthen friendships.  Contact us.

Call: 407-479-0076      Email: info@3percentsales.com    Text: 321-624-0534