Frequently asked questions
Say you want to buy a cellphone. Just because you have 10 times the money as the next guy, is it fair to charge you 10 times the price for a phone? From my own experience as a buyer, seller and realtor, I believe it is unfair and outdated to charge a 6% commission for a realtor’s service. Selling a $800K house does not take 8 times the effort of selling a $100K house. The essential services that realtors provide are pretty much fixed from one sale to another.
Realtors often tout they are worth the fee because of their “great service” (always return your call, reply to emails quickly, help you push buyers harder or negotiate with sellers harder, etc.). Well, these are just standard practice for every professional in the industry. The other kind touts “local knowledge and rich experience”. I can’t deny there is some truth to that. But in this day and age, we hardly need “local expert” to tell us that this restaurant has great fish or that road is often congested. We have Google.
This price is what I believe is fair based on the effort a realtor spends on a deal and the cost of technology and office fees. As we evolve, the fees maybe adjusted with new technology or new business methods.
I won’t call it a “catch” but it’s good to know the pros and cons before committing.
First of all, almost everything is done online, and only essential services are provided. That’s a big reason why we’re able to cut the cost. Essential services include, but are not limited to, listing your home online, drafting contract, negotiating on your behalf, and guiding you through the transaction.
All fluff is cut out. Fluff means non value-add services, such as chatting with you about the weather or that rude neighbor, doing marriage counseling, calming you down when anxiety attacks, reading to you answers that can be easily found online, or standing over there when photographers and inspectors do their own work.
For the services I do provide, I will perform to the highest professional standard. After all, my goal of doing this is to save you money, and save you from irresponsible realtors, and the endless pushy sales, and the phony warmth that made you oblige unwillingly.
I set the system this way because if I were the customer, this is how I would like to be treated. But I know that I tend to be a little nerdy and introverted, so my view is probably a bit off. Your feedback, therefore, is extremely valuable to me.
That is correct. If you are a proactive buyer or seller and believe that doing some research online is worth a couple of thousand dollars, you should choose my service.
I will prepare a detailed list for you about what to expect and what to do. You’ll be on top of every step of the way from the beginning to the end. Generally, sellers should prep your homes to the best condition possible, get professional photography done, and probably coordinate some showings. Buyers should have your finance straightened out and be clear with which house, or at least which kind you like to buy.
If you don’t feel like being involved in the process and just want to hand it off to someone else, there are thousands of traditional realtors out there to help you out, as long as you are willing to pay the 6% commission. But from my experience, other than the home showing part, a seller or buyer can’t expect to be completely off the hook. Realtors still need your input on a lot of things. So you are still participating (unwillingly) any way.
Wouldn’t it be nice if the realtor charging 10 times my price do the work 10 times better! That’s a pretty sly marketing line to coax the consumers to pay more, under the impression that they are getting better service. If you think about it, there is no support to back up the argument, and no quantitative measure as to what is “bad” or “limited”. It’s just a flat statement, which could be true or false, or partially false.
In my opinion, the real estate brokerage industry has some inherent flaws. First, the industry has a relatively low entry threshold; second, there is no transparent, universal standard to judge the quality of a realtor. The result of these two is that there are people of different educational levels, different motivation, different worldviews and different technology awareness, all broadcasting themselves as “your local expert” or “best choice” or “real estate guru”.
On the other hand, consumers rarely have a way to objectively compare realtors, like the way they can compare cereals or electronics. Most consumers deal with only one realtor in many years. And due to the uniqueness of every transaction, it’s hard to know if apples are better than oranges. Say you used this really famous local realtor, because she closed hundreds of deals last year and has a 4.8 star review. Half way into the transaction you started to dislike her style, but there’s too much hassle in changing realtors now.
Most of the time, if a realtor really sucks, you just think to yourself “it’s just one deal, it’ll be over in a couple of months, and I’ll just never use her again. It’s better than being stuck with that horrible boss of mine.” Do you think this realtor is counting on your returning business to survive? No. She earns plenty just from the people that decided to try her once. So the market forces driving improvement through competition is not working well here. Then how do you find the “good” ones? Are online reviews reliable? Are their sales numbers reliable? Granted, there are some really good realtors out there. But a lot of times, it’s merely a reflection of how much marketing dollars they spent. And it’s the quandary that consumers are in today.
I’ve been there, both as a consumer and a realtor representing my client. I’ve dealt with realtors that could go days on end without answering my texts, realtors that are snobbish and didn’t care to work with me because the house is under $150k, realtors that are pushy and get upset when we didn’t offer them, realtors that are cunning and tried to take our earnest money when it’s not our fault, and realtors that are flat out ignorant that I ended up educating myself on everything and got my own realtor license. All of it made me think of what is a “good” realtor, and how much is realtor service really worth.
Back to this statement of realtor fee level v.s. service quality. I reckon that different consumers have different preferences, one man’s good realtor could annoy the other man like hell. And that’s fine. No one could be liked by everyone. But there are concrete standards that are universally accepted, like professional skills, knowledge base, care for the consumer, efficiency, and integrity. We have things that we don’t do. But if we do it, we must do it to the highest standard.
“Limited service” is partially true. In order to keep our cost low, there have to be services that are usually provided by traditional realtors but we couldn’t do. But we believe in this day and age, if a consumer is able and willing to do some work since everything could be found online, he deserves to be compensated. And once we strip the puffed-up idea of realtor service to its core, most transactions don’t differ that much. Hence the flat fee.
Sorry I rambled this much. I’m usually not very chatty. But this is a topic that I’m passionate about. I’ve thought a lot about the industry and realtor behaviors, and this is my answer to it. So to summarize, limited service is true; low service quality is absolutely, categorically false. I know that this model would not be for every buyer or seller. But for the ones that choose us, you won’t be disappointed.
There are two scenarios to your question.
First, it is the law in Illinois that requires minimum services provided by one realtor representing his client. That means, if I represent you in this transaction, I am obligated to provide a bundle of service (drafting contract, negotiation, closing coordination, etc). It is only through my representation that I could get my commission, and provide you with maximum rebate.
The second scenario is I only provide consultation service on drafting the contract, which I think is your target. However, I wouldn’t be “representing” you as agent to client. (I will cut the crap where other realtors will talk about not acting out of your interest without representation) The key problem here is that the Seller’s realtor, seeing there’s no Buyer’s realtor, will keep all commission (6%) to himself, or they’ll push to represent you as a dual agent. Occasionally, you can negotiate directly with the Seller’s realtor to let him refund you. But I’ve never seen a realtor willing to let go as much as our rebate.
That’s right. Selling a home involves many parties. The buyer will have their agent. Traditionally both seller’s agent and buyer’s agent expect to be paid 3% or 2.5% of the home price. Now the seller’s agent fee is reduced to $1500 (meaning if your home is sold for any price higher than $50K, you’re saving money by using my service). I wouldn’t advise low or no commission to buyer’s agent, for now. So expect to pay something to them. There are also title fees, attorney fees, pro-rata property taxes, recording fees, etc. But most of the times, realtor commission is the bulk of a seller’s expense.
The short answer is “no”, but please hear me out.
I never believe it when a realtor claims that he can sell homes faster or can guarantee a sale. Because I believe in the market, not individual salesperson’s “skills”. In a hot market, everything sells faster and for more money. In a slow market, even some very famous realtors can’t sell a perfectly good house.
The abundance of information online has made the current real estate market almost frictionless (like what we learned in college about the perfect market). When your home is online, relevant buyers will find it and consider it, the right buyer will make an offer. When we put your home on the MLS, it will propagate to all major real estate websites, Redfin, Zillow, Trulia, Hotpads, Realtor.com, etc.
Real estate purchase is not like grocery shopping. People take it very seriously, so even if the salesperson sing and dance at the top level, people hardly make emotional buys. The most important factor affecting the sale of a house is presenting the right information to the buyers.
At the end of the day, when we’ve done everything we can, whether and when a home sells and for how much is decided by the market and, for a large part, luck. This is not pessimistic thinking, only objective observation. As of the time I write this, the market is hot and everything sells fast and for more, but it’s hardly the realtor’s doing.
An initial payment of $500 (or as indicated in the Seller page for different plans) is due before the house is listed online. There are many costs related to bring each transaction live on the MLS, e.g. MLS charges, staff hours, market research, office dues, etc. Therefore, this part is non-refundable.
If the deal closes successfully, seller doesn’t need to pay out of pocket, as the remaining of the fee will be collected at closing.
If we’ve worked on a transaction for a while and the seller decides to cancel, it will depend on the substance of our work. To prevent abuse, we would need to be compensated fairly. But if your cancellation is a result of our fault or negligence, there’s no charge. After all, my goal is to try to save you money.
An initial payment of $500 is due before we start property showings. If you find the property to buy in the first 11 properties you visited, there is no further charges, and you will expect a rebate at closing. If you can’t identify a property after seeing 11, there will be further charges based on how many properties you see. This is to ensure that our agents are compensated for their time. Similarly, when we enter the contract stage, there is no further charges. The showing costs are non-refundable.
If the deal closes successfully, buyer doesn’t need to pay out of pocket, as the remaining of the fee will be collected at closing. Buyer will get a rebate after we clear the closing check.
If we’ve worked on a transaction for a while and the buyer decides to cancel, it will depend on the substance of our work. To prevent abuse, we would need to be compensated fairly. But if the cancellation is a result of our fault or negligence, there’s no charge. After all, my goal is to try to save you money.
Traditionally, people rely on realtors to recommend properties to them, and arrange showings. Some people would even see hundreds of houses before making a decision, and maybe they decide not to buy, or not to buy with this realtor. The poor realtor, having worked for months counting on the deal closing to get the commission, ended up not being compensated at all. It was precisely because of this reason that realtors charge an exorbitant fee since they need to hedge for those people leaning heavily on them.
But, if you are capable of finding a house with minimal realtor’s help, why should you pay more? Especially with lots of online resources available, buyers can do just as well without a realtor’s input.
What kind of market research do you need? First of all, ask yourself what do you want from a house. Do you value short commute time, or space for a growing family, or a potential to flip the house for profit? Then research different neighborhoods. As they say, location is the most important feature of a house. Which neighborhood you choose will directly affects your future lifestyle. When you have a vague idea of what properties might interest you, go to different open houses to get a feel. You’ll get first hand experience of further details of different properties, e.g. street parking, neighbors, yard work, oldness or newness, smells, sunlight exposure, room layouts, etc. Then you’ll further narrow down what you like and what you can’t tolerate. I would recommend set up a search alert on real estate websites, so you’ll get notified immediately when new properties hit the market. (Of course, we can also help you set up an MLS alert, but let’s face it, MLS technology isn’t as user friendly as the mainstream websites, like Redfin or Trulia) At the same time, make sure to get your finance in order during the house searching process. When you are ready to offer, a pre-approval or pre-qualification letter from a bank is necessary.
It might seem a daunting task, but trust me, you’ll get the hang of it in no time.
The reason why we don’t involve too much in the market research process is mainly because people’s preference is vastly different. Finding a home is an extremely emotional process, and it’s best done by the buyer in the comfort of his/her home, maybe with inputs from friends and family, reflecting on the past and imagining the future, coffee or wine in hand. A realtor can help with some subjective aspects, but if you google them, there’s a lot of resources online addressing all your questions. Frankly, I think a realtor’s interference with house searching could get intrusive: when you want to linger a little more at a neighborhood, realtors will rush you to the next appointment; when you already decide a property is a no-no, realtors still ramble on about the specifics. Therefore, the process works best when you already have a few candidates in mind, and come to us for showings. This will significantly reduce the emotional stress and wasted time on both parties.
Our process will only work if you have a computer and/or a smartphone, as almost 100% of the process takes place online. So if you have some experience with Google Drive or other smartphone Apps, that’s the best. If not, I would say they are really easy to figure out, that there’s not much of a learning curve. But if the idea of doing everything online still makes you uncomfortable, we’d recommend traditional realtors would be your best choice.