Why A Flat Rate?


Why not 6%* like most agents?

In order to properly understand why we do not charge a commission based on a percentage of the sales price of the property, its important to understand how the '% of sales price' commission structure used by most real estate agents ever started and why. Interestingly enough, most real estate agents don't even know this.

​Prior to the technological advancements of the internet in regards to real estate advertising, when an agent listed a home they would incur a great deal of immediate and up front costs. In order to get the property the most amount of exposure to potential buyers they would need to run costly ads in the newspaper, grocery store local "Real estate for sale" magazines, postcards to neighbors, etc.

The reason why their commissions were dependent on the sales price was simple. If you had any home on the market the listing agent would need to spend XX amount dollars over XX amount time to get it sold. The lesser expensive homes sold faster, the more expensive ones took longer of course. (Statistically speaking, still the case in today's market.)

Because the marketing time varied with the price point of the home, the agent would need to spend more money on advertising that more expensive home for a longer period of time. Since the agents actual marketing expenses were directly tied to the value of the home, their commission was also dependent on the price of the home. This is why the "% of the sales price" commission structure was adopted. You can see, it would be impossible to price their efforts in marketing each home at the same rate as the costs of advertising the property would wildly vary.  Keep in mind, these expenses were 100% at risk to the agent as the home may never sell at all if it wasn't marketed correctly or the price was too high or worse, the housing market was volatile.

You can see that under those circumstances it was necessary for an agent to charge for services rendered based on the price of the home.


FACT #1. A professional real estate agents NECESSARY advertising expense to get your home the highest amount of exposure it can possibly have is ZERO.

 The only exception to some of the information below is with marketing luxury properties. (Typically over $1.0 million dollars)

When your agent lists ANY home and inputs that home to the MLS system, automatically and within a few hours your property is on real estate websites like Zillow, Trulia, Homes, Realtor and literally hundreds more. The additional cost to the listing agent for this global online exposure garnering hundreds of millions of Internet hits on a monthly basis is ZERO.

An agent doesn't NEED to publish an ad in the local “real estate for sale” magazine or the newspaper or send costly postcards to the surrounding neighbors in order to get your home its needed exposure. Over 92% of all buyers use the Internet during their home shopping process.

The local MLS gets your home exposed to every single agent subscribed to the MLS system. Buyers agents comb over the MLS data daily when looking for a buyer in your area and if its in the MLS, its also on the Internet where potential buyers will specifically go to look for real estate. The MLS system is a flat annual cost to Realtors irrelevant of the volume of houses they sell on an annual basis. So one could argue, the NECESSARY additional advertising costs to an agent are ZERO.

The value of making sure the house is in MLS for buyer's agents to have access to is proven by the fact that over 93% of all homes sold that were listed on the MLS system in the greater Phoenix market in 2016 were sold through the use of a buyer's agent. Buyer’s agents use the MLS as a database to locate available properties for sale for their buyers. Buyer's agents do not scour social media, or Zillow, or newspapers, or agents newsletters they send out. Buyer's agents use the MLS system to locate their clients' properties and their clients use the Internet. Buyer’s agents actually SELL the homes, listing agents merely make them available for sale.

Many agents do spend a great deal of money on newsletters, monthly mailers in your mailbox, “Just Listed/Sold” postcards, calendars, door hangers and so much more. Agents very commonly refer to these efforts as “Advertising”. Be very careful to not confuse these “advertising” efforts with “self promotion” efforts. Those efforts are very expensive and require constant and repetitive repeat expenses in order to be effective. Those “advertising” efforts are designed solely to get the AGENT the most amount of exposure in their chosen marketing areas and have little to nothing or nothing to do with actually selling a home.

To further prove the point above, Erin O'Connor has sold over 245 houses over a 13 year career totaling well over $80,000,000 in total sales volume. The total amount of money spent to advertise any of those homes was ZERO. Not a single dollar was spent above the flat expense of having a sign post installed and professional photography. The annual flat MLS subscription dues and board dues are the same irrelevant of the number or dollar value of the homes being sold.

FACT #2. The tasks performed by a professional listing agent and the services they provide to their clients are virtually identical in scope, irrelevant of the price of the home.

  The only exception to some of the information below is with marketing luxury properties. (Typically over $1.0 million dollars)

When an agent lists a home, they agree to assist the seller in procuring a ready, willing and able buyer to buy that home using any and all tools available to them. The value of the home should not in any way shape or form effect the level of service an agent will provide for their client.

Because there's no way a professional talented and experienced agent would ever "work harder" for one client over another, their service level they perform is absolutely identical in all ways. As such, the value of the house has NOTHING to do with the level of service you can expect. The only difference that the value of a home will make on the services a professional agent will perform is in the event the agent pays for additional photography and video packages on a more luxurious home. Otherwise, the process is the same, no matter the house's value.

The actual task of getting a home to the closing table for their client is the same. The paperwork is the same. The broker requirements are the same, the timelines are the same, the closing process is the same. The value of the home has absolutely zero bearing on the process whatsoever.

Keep in mind, in 93% of the cases, a buyers agent is the agent that ACTUALLY SELLS the home. A listing agents job is merely to present it for sale in its best possible light, priced correctly and then facilitate a smooth transaction while always protecting his or her clients best interests.

You wouldn't pay the car wash any more to wash your expensive car than they would charge to wash a lesser valuable car would you? ​​

FACT #3. Flat Fee real estate brokerages with small monthly fees and zero commission splits are some of the fastest growing brokerages in our market.

This is simply a testament that the name of the brokerage has little to do with the property getting sold. The larger, better known, nationally recognized brokerages (RE/MAX, Keller Williams, Century 21, Coldwell Banker, etc) that take a high monthly fee or a split of the agent's commissions are losing agents very quickly to brokerages that offer very small low monthly flat fees and don’t take any split of the commissions of the agents.

As agents start calculating how much money they spend on these larger more expensive brokerages, they make the jump to flat fee brokerages and in turn save themselves tens of thousands of dollars a year in some cases. After Erin O'Connor worked with RE/MAX for roughly 5 years, the office and broker fees alone totaled over $140,000!

FACT #4. If you list a house on the market for too much money it will NEVER sell irrelevant of the amount of exposure and advertising efforts put into the house.​

Properly pricing your home to sell is crucial. An over priced home will never sell regardless of which agent lists it, and an under priced home will sell instantly regardless of whom the listing agent is.

Here's the "Secret to selling your home;"

1.  Hire a knowledgeable, experienced and seasoned agent.

2. Price it correctly within the confines of the area comps and based on its unique characteristics of the property.

3. Work with your agent to present the property as best as you can. (professional photography, staging, etc)

4. Cooperate with showings and inspections.

5. Be willing to adjust pricing based on ever changing local market conditions.

That's it. If you do all of the above, your property WILL SELL for the maximum amount the market will bear. Don't allow an agent to convince you that he or she is the secret to selling your home and that you need to pay 6% in order to get it done.

In Summary;

    • Agents are leaving expensive brokerages to cut their own costs of doing business.

    • Their necessary advertising dollars have been completely eliminated.

    • The MLS automatically gives your house exposure on the Internet at zero cost.

    • The scopes of service you can expect to receive from a professional agent are identical irrelevant of the value of your home. (Media packages differ in cost)

    • Technology has made the agent's job drastically easier and less expensive.

    • Buyer’s agents are responsible for over 93% of all sales on the MLS.

    • Pricing the home properly is crucial and more important than anything.

We believe in charging a rate based on the scope of work and the service we will provide you. We will not work any harder for the expensive homes or provide you inferior service for lesser expensive properties. We do not believe it is fair or equitable to you, the seller, to have to be penalized with a higher cost to sell a home because its more valuable.

*= 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.

Click to read reviews!

Erin J. O'Connor PLLC

alt tag

alt tag

alt tag

alt tag

alt tag