I’ve been seeing some traditional full-price agents put out some pretty disparaging videos about 1% real estate agents. This article addresses some common claims against us and why we advocate for lower commissions. My sisters and I actually grew up in a real estate family, having grown up touring homes with our dad as grade school kids and learning from our mom who did a ton of the front-end legwork. We remember how the industry used to be 30-40 years ago before the Internet, so we feel very much qualified to speak on this subject.
First things first . . . Why do we do it? Why are we 1% agents?
Simply and honestly put, because real estate isn’t as laborious as it used to be. Back in the day, listings were published in huge books that resembled giant phone books. They featured one tiny, black-and-white photo and a tiny description. There was no Internet so you’d better know the area and what your client wants. No previewing full-color photos online or online maps or online property research OR even searching for properties online – we had to search through paper! There was going to the county assessor’s office for records, TONS of driving and paper maps, and making presentations of offers in person. The Internet changed all that. So much information is available at our fingertips AND at the fingertips of the PUBLIC. Buyers and sellers are coming to the market much more knowledgeable and prepared than ever before. PLUS did you know that real estate agents used to qualify buyers?! That means gathering and reviewing their financials to see if they even qualify to get a loan. We don’t do that anymore! Lenders do that before we’ll even work with buyers. Yet today’s full-price agents are still hanging onto their commission rates from 30 years ago. The amount of work involved doesn’t justify it anymore.
Now that you have a little background, let’s go to assertion 1 . . .
“1% agents are desperate.”
Really?! My sisters and I have been doing this for a combined 20 years and making a full-time living from it. Rather, it’s common in this industry for agents to, ahem, obfuscate the value of your house to get the listing, then count on price drops until they get to actual market value. In the meantime, your house gets stale. But proper pricing would have gotten you a sale, even multiple offers. (I think it’s rather desperate to disparage another person’s business model. There’s plenty of business to go around for everyone!)
Let’s move on to assertion 2 . . .
“In hot markets discount firms get some traction, then fail when a buyer’s market hits.”
Logically, this doesn’t make sense. My firm took off while the entire MLS tanked in 2009 when homeowners took an enormous hit. Think about it — homeowners still need to sell their home in a buyer’s market (e.g., work transfer, divorce, medical needs, job loss, etc.) and you’ll want to use a 1% firm precisely BECAUSE it is buyer’s market and doing so saves you money. There really is no reason to pay yesteryear’s full-price commissions.
“High-end luxury homes require 5-6% commission.”
Why?? Whether it’s a $300,000 home or $3 million home, the contracts, legal requirements, and issues are the same. The square footage and quality of the home only changes the market price. How we market our homes hasn’t changed because we decided to keep up with the times and move to 1% firms. In fact, I create a more custom page on my website for each of my listings. Most agent websites only have the MLS data which (in WA state) is a short 500-character description (about 80 words!) and up to 40 photos. Mine has a much more expanded description to really showcase your property plus many more photos than the MLS allows.
Full-price firms say, “But we have a team!”
What are teams all about? When an agent has a “transaction coordinator” as part of his/her team, what does that mean? All it means is that he or she delegates administrative tasks to another person so they can focus on . . . getting more listings. That’s it! Not on helping you but getting more listings. Do you really want to pay for your real estate agent’s assistant out of your equity?? This is the equivalent of always getting the legal assistant but never talking with your attorney. Or do you really just want one person to walk you through the entire transaction from beginning to end knowing your case intimately?
Listen for Substance
If you’re watching videos or reading articles disparaging 1% real estate firms, listen for substance (i.e., facts and figures to back up their claims) or are they just making personal attacks such as “they’re desperate.” This is an important topic to consider because it’s a large portion of your equity!