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I Admit It! Why Won't Anyone Else?

Writer's picture: S. HoytS. Hoyt

I Sold A Home I NEVER Set Foot In & I WAS SO OVERPAID!



Buyers agent commission has been the same percentage since I opened my brokerage in 2001. The fee has greatly outpaced inflation due to rising home prices. Hold this thought...



The goal of most agents in now way resembles me or my goals.
The goal of most agents in now way resembles me or my goals.

One of my Michigan clients recently had a liquidity event and wanted to buy a lake home 45 minutes away from his principal residence and he wanted to see it that weekend. I was in North Carolina, usually I would arrange the showing and book a flight. The client said "please don't fly up to show me one house".



Solution was a showing service, I booked a licensed agent to open the door, sent my client property disclosures and surveys with my notes, ran zoning check, did CMA, and when they viewed the home we face-timed and went through a pre-inspect check list. He drove home, I did the offer. He signed, we negotiated, we were done that night. 



This transaction was some of my best work, we got the home under asking (there were multiple offers) by catering to the sellers needs, it was brilliant. 



The seller paid me $25,000.00 as the buyers agent. My time, including setting up the showing, virtually attending the showing, writing, negotiating, inspection review, closing docs review with client and much more was under 8 hours. 



My only expense was $125.00 to the showing facilitator. My net was $24,875.00 or $3,109.38 an hour.



$3,109.38 an hour! I am an excellent broker, it is nearly impossible to find an agent with my experience (6,000 transactions), creativity, and market savvy. 



...I AM NOT WORTH $3,109.38 an hour. In this situation the commission was baked in to the price, the buyer could not have had a better experience and the cost was the same, so lucky me. 



Now buyers are on the hook for the buyers agent commission. How does any agent claim they are worth $3,109.38 an hour? If we do math that is $124,375.20 for a regular work week, $538,544.62 a month, or $6.4mm annually*. This is what real estate has looked like and agents are fighting to preserve. It is gross.



In spite of a lawsuit and settlement real estate commissions are still being protected by agents. Hundreds of posts and videos show how agents are doing their best to keep status quo and ridiculously high buyer commissions for basic levels of service.



We can do transactions faster, smarter and less expensive than ever. We have ability to provide better service at a lower consumer price and make more money. Commissions increase with home prices, 80% over the last 4 years in some markets. 98% of agents are not 10% better, yet they are protecting an 80% raise? Average agents sell less than 5 homes a year, any agent with less than 100 career transactions should come with a warning label. Consumers are getting fleeced.



Just a rant for thought. 



*Clearly, $6.4mm annually isn't happening. AI generated graphic in no way resembles author. I work with discerning buyers and sellers in Michigan and North Carolina.


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