Real Estate Commissions and Why They Suck

I’ve lived in my current home for almost ten years—a third of the way through our thirty-year mortgage. It’s a lovely home in a fantastic area of our town, and my husband and I have been able to create a wonderful place for our kids to grow up. The home sale happened so long ago that I barely think about it anymore—this is our house, we paid for it, and we own it. Unless something drastically changes, we’re not going to leave.

Still, we see our house as an investment, and investments need care and attention. We’re on our way to planning a kitchen remodel, and I was reviewing some potential financing options. I’m almost sure we’re going to use our home equity to fund the project, so I was looking back at out old real estate transaction documents. I was kind of shocked—even at the time of purchase, around ten years ago, this home was valuable. That got me thinking about how much we paid for it, but also how much our real estate agent got out of the deal. I know that’s the reality of the real estate industry, but damn, 6% of my home equity was a lot of freaking money.

But guess what! We, apparently, don’t even need to pay commission anymore! That’s how antiquated the real estate industry is! I was reading about this company and how they’re eliminating the practice of paying broker commission. Instead, they have a flat-fee model, which means you pay a one-time fee to list your home. That’s it! One and done! As a result, flat fee realtors can apparently save you a ton of cash. According to this company’s website, they save clients an average of $12,500 per transaction. Want to know what’s going to cost exactly $12,500? My freaking kitchen remodel!

I guess my point here is that the real estate industry is robbing homeowners. Now, that may sound a little alarmist, but I’m serious. The realtor we used to buy our home—though a lovely woman, don’t get me wrong—got us in a house, took our commission, and got out of there as fast as she could. Does that sound like a robbery to you? Because it kind of sounds like a robbery to me. Flat fee realtors are the way of the future, my friends. If you’re in the process of buying or selling a house, research your options—maybe there’s a flat fee realtor in your city.

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