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How Does One Percent Realty Work
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There has been a lot of recent talk about the Competition Bureau and CREA and the recent changes to the MLS® rules that govern REALTORS®
Its time to shed a little light on this, at least from our perspective. The new MLS® rules allow for a licensed REALTOR® to do what is referred to as "mere-posting" a listing onto the MLS®. They will charge some sort of nominal fee for this, probably around $500 or something. The idea here is to allow people to market their properties themselves, (For Sale By Owner) and do all of the work themselves.
From where we sit, this is probably a good thing. It gives consumers choices, which they previously did not really have. Now as we see it, consumers have 3 viable options:
Option #1 - Sell it through the traditional "higher commission companies" who will place your property on MLS® and provide full service real estate. Depending upon what your home is worth, this will cost a fair amount of money, though it will vary across the country. A $400,000 home will normally cost somewhere between $15,000-$24,000 through a company like this.
THE ONE PERCENT REALTY Option #2 - Sell it through One Percent Realty. We will charge you $6900 for this same $400,000 home, with all the services and exposure that you would receive from the traditional higher commission companies. This fee also includes payment to the buyers agent ($3000). We do open houses, handle the showings, negotiations, and all the paperwork that you would expect from any full service real estate company. In short, the services and exposure are the same as you would get from option #1 above, but for way less money. There are no "up-front" fees either. We get paid for performance, so, if your house doesn't sell, you owe nothing.
Option #3 - Sell it yourself (FSBO) or Mere Posting. You can now put your home on MLS® and have your home exposed with all the other listings, and deal directly with the public or REALTORS® who may want to show your property. This type of service usually involves an "up-front" fee so, the service provider doesn't have any real interest in if your home sells or not. Also worth noting, is that since your property is on the MLS® system you will have a reasonable chance of dealing with a buyer's agent. These buyers agents will expect to be paid and will negotiate a commission with you. Most likely, they will be looking to the Seller to pay them something, probably at least half, of the fees discussed in option #1. So again, if we use the $400,000 home as our example, a buyer's agent will be expecting to receive between $7500-$12,000 to sell your property.
So, if you can have the full services of our professional REALTORS® for $6900, why would you not just leave it to a professional?
Prior to the Internet, Buyers used to get in the back seat of a REALTORS® car and go on a tour of homes. The REALTOR® would have his/her MLS® catalogue of homes which he was not allowed to give Buyer's a copy of. REALTORS® controlled MLS® information. This is simply not the way it happens anymore.
Nowadays with the Internet, consumers are empowered and in much more control of their new home search. Over 85% of Canadians who search for a home start their search on the Internet. Whether Buyers are looking for properties themselves on realtor.ca, or being automatically emailed MLS® properties directly from their REALTOR®, or other house hunting activities, nowadays Buyer's often know as much or more about their particular market and the homes for sale in it as their REALTOR® does.
It is no slight on other agents, but the buyer basically has access to MLS® and can check www.realtor.ca 20 times a day, and their agent will not be doing that, no matter who they are. These changes in technology and Buyer behaviour created the opportunity for the concept of One Percent Realty to flourish.
When a Buyer sees a home that meets their criteria and is their dream home they do not ask "How much commission is being paid here." It's not of concern to the potential Buyer. The Buyer is concerned with number of bedrooms, bathrooms, location, schools, and obviously the price. Our listings are displayed everywhere that all the other listings are. If you are a buyer looking in a given neighbourhood in a given price range (which is basically all of them), then you will want to see every listing in that neighbourhood in your price range. With the Buyer now in the driver's seat as a much more sophisticated consumer the real estate marketplace had changed forever.
If your home is well kept, and priced accurately, it will sell.
It has no relationship with the amount of commission you pay. With extensive experience in project marketing, we realized that there may be an opportunity to market houses in a similar lower commission higher volume manner. Spending most of their time prospecting for business, the conventional agent requires a higher commission structure to compensate for the lower volume/lower listing success rate in the highly competitive real estate industry. With the help of the technological advances such as the Internet, cell phones and fax machines, One Percent Realty was able to reduce the typical real estate office overhead as well as leverage the productivity advances of its agents to create a successful discount commission business model. Whereby our agents earn less per house sold they make it up in volume of sales at the end of year. But, its not about what we make, its about what you keep! It works great for us, and it works great for our Sellers. We say at One Percent Realty, the more deals we do, the more money we are saving our clients!
"The highest price estimate, in terms of money which a property will bring if exposed for sale in the open market allowing reasonable time to find a buyer who purchases it with knowledge of the uses to which it is adapted and for which it is capable of being used." (As defined by the Courts)
The concept behind One Percent Realty is that we provide you full service but at a discount commission. For that full MLS® service we charge just $6,900 for all homes under $600,000 and for homes over $600,000 we charge 1% plus $900. The $900 portion covers the typical disbursement costs to marketing and selling your home. Our agents will provide all of the same services you would get if you were to go with a higher commission company. The only difference is the amount of commission you will pay. Your 1% agent will help you determine the appropriate listing price, list your home on the MLS® and the popular realtor.ca, enter the listing on onepercentrealty.com, take interior and exterior digital photos, place a for sale sign (if applicable), advertise your property where the Buyers are looking, show your home to prospective Buyers, provide you advice and assistance along the way... Our goal, like yours, is to sell your home.
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$ 200,000 |
$ 6,900* |
$ 10,000 |
$ 3,100 |
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$ 300,000 |
$ 6,900* |
$ 13,000 |
$ 6,100 |
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$ 400,000 |
$ 6,900* |
$ 16,000 |
$ 9,100 |
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$ 500,000 |
$ 6,900* |
$ 19,000 |
$ 12,100 |
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$ 600,000 |
$ 6,900* |
$ 22,000 |
$ 15,100 |
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$ 700,000 |
$ 7,900* |
$ 25,000 |
$ 17,100 |
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$ 800,000 |
$ 8,900* |
$ 28,000 |
$ 19,100 |
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$ 900,000 |
$ 9,900* |
$ 31,000 |
$ 21,100 |
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$ 1,000,000 |
$ 10,900* |
$ 34,000 |
$ 23,100 |
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*compared with a broker charging 7% on the first $100,000 and 3% on the balance, not all brokers charge the same.
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Full MLS® Exposure
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World Wide Internet Exposure on realtor.ca & onepercentrealty.com
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Experienced Professional Real Estate Agent
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Market Evaluation
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Digital Photos
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Responding to Consumer & REALTOR® Inquires
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Showing the Property to Prospective Buyers
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Assisting the Seller in Negotiating Favorable Terms & Conditions with an Offer
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Cooperating & Assisting Other Brokerages Working with Buyers
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Assisting in the Completion & Possession process
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Newspaper Advertising (if applicable)
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Open Houses (if applicable)
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Signage (if applicable)
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Full Service Brokerage at a Fraction of the Cost
The simple answer is yes. Our MLS® listings are shown, and sold, by lots of Cooperating REALTORS® all of the time. Logic would dictate that if our system was unable to attract Cooperating REALTORS® to sell our MLS® listings then we would be selling most of our own listings to our own Buyers. In fact, its quite the opposite. Over 70% of our listing sales are sold by Cooperating REALTORS® who represent the Buyer, which is in-line with industry standards. This is the proof that our system works.
Why is that? We believe it is two reasons. First, our listings (under $600,000) typically offer $3000 commission to Cooperating Brokers. While $3000 might not be as much as some of the other listings, it still is a decent amount of money for a paycheque for Canadians these days, including a lot of REALTORS®. The more important reason why other agents cooperate and sell our listings is that Buyers don't care about commission. Buyers are always looking for the best value - regardless of the commission. Buyers don't care what the Sellers needs are, what the Sellers want in their pocket, what their mortgage penalties are, and the last thing on a Buyers mind is how much the REALTOR® is going to make. They care first and foremost about value. Buyers always want to get a great buy. As mentioned above, if the Buyer loves the home, does the amount of commission matter to the Buyer?
Spending $12,000-$20,000 or more to sell your home is a lot of money. If you are thinking about selling your home call your regular agent that you used last time, but this time also call us to compare our services and commission rates. Being full service agents, our agents provide free no obligation market evaluations just like the other guys. Please don't let someone else tell you about our system, let us tell you exactly what we will do to sell your home. You and your hard earned equity will be glad you did.
Click here for a free online home evaluation. Or you can search the entire Lethbridge MLS. In addition you can contact me, go to our FAQ page, go to all my listings, or you can sign up for our hot new listings notifier.
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