Flat Rate

Why do I charge a flat rate?

The short answer....The Internet.​

Regardless of the price of your home, the task of selling it is the same. The sales price has little to no bearing whatsoever on the efforts of the listing agent.
(Luxury properties excluded $1.0M+)

Most sellers and even most real estate agents don't have any idea how the "% of sales price" business model ever even started. Whats more important is why its no longer necessary for a seller to accept that type of commission structure.
​Prior to the internet and the online based MLS system that agents use today that went on the internet in the late 1990's, when an agent listed a home, in order to get the home the necessary exposure it needed to sell, they were responsible for out-of-pocket advertising expenses immediately. The agent had to spend their own money on frequent newspaper ads, home sales magazines and various other forms of print advertising. These up front expenses weren't even guaranteed to be recouped because at any point the could lose the listing and those advertising dollars were all simply lost.
​The reason why the commission structure was a percentage of the sales price was simple; the more expensive the house, the more expensive the marketing costs would be to the agent due to length of marketing time.
​According to the US Census Bureau, the median price of a home in the USA as of September 1990 was $113,600. A commission of HALF of 6%* ($3700+/-) of that price wasn't as much money considering all of their immediate out of pocket and necessary expenses. Now, half of 6%* of today's median price being $305,400, ($9,000+/-) seems like a lot to pay an agent that doesn't need to spend a dime to get your home sold.
​The Secret to selling your home for top dollar:
The right price, the best possible presentation for your home and on the MLS system for the buyers agents and the world to see.
​Today, things are far different. Now, once an agent inputs your home into the Internet-based MLS system, instantly all other agents with buyers looking in that area will see it and within a day, your home will be featured on hundreds of public homes for sale websites. (Zillow, Trulia, Homes and Realtor.com etc) Not only will your home be readily available for viewing by any and all buyers agents with buyers for your home, but now will have global exposure due to those aforementioned websites! The extra cost to your agent for this immense amount of advertising and exposure for your home...
ZERO. $0.00. Nothing. Zilch. Nada.
Additional exposure is automatic upon entry into the MLS and is included in the annual MLS dues.

Necessary advertising costs for agents to get your home the exposure it needs are virtually nothing. When an agent brags about their advertising budgets, they are typically referring to their "Self-Promotion" budgets. Those advertisements (news letters, monthly mailers in your mail, door hangers etc "farming material") are designed and implemented for the sole task of promoting themselves and their services.
​Even agents that spend the extra dollars on professional photography for your home as well as the yard signs and various other small efforts still pay the same for those services irrelevant of the price of the home. The caveat is that more luxurious properties will have higher photography and media costs due to the caliber of home.
​​In summary, after selling hundreds of properties in the last 12+ years, I can tell you with 100% certainty, the core "task" I have performed to get any of those homes sold and closed was virtually identical on each house. Additionally, I have spent absolutely ZERO dollars on any advertising any of those homes. Because my scope of work to properly market your home and the actual time it takes to get it sold remains mostly the same regardless of the price of your home, I think its only fair that I charge a flat fee listing commission.

So here's the "Million Dollar Question..."
Why are agents still charging so much money to list a home if their necessary advertising costs have been all but eliminated?

*= 6% is a commonly charged commission rate. There are no "standard, traditional, normal" or otherwise commission structures. All agents are free to charge whatever rate the property owner and the agent agree upon.

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Erin J. O'Connor PLLC

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