articles

The 3 Percent Solution

The good news is that appreciation has nearly doubled the price of Marin real estate during the last five years. The bad news is that real estate agent fees have also doubled, but the workload has remained unchanged. If you exclude real estate and oil, inflation has barely crept up a few percentage points over the last five years, so why has real estate agent compensation doubled when the income of the average Marin resident has remained largely unchanged?

Beginning February of 2006, Barrister Broker will begin offering clients the option of selling real estate via our traditional hourly rate or a flat 3% of the sales price. As those clients familiar with our hourly rate program know, the hourly rate structure has several advantages, but it also has one disadvantage; clients pay an hourly rate retainer, in advance, whether or not the property sells. Because the balance of supply and demand is beginning to shift in the real estate market, we think it is time to offer another alternative to the conventional 5-6% brokerage fee. Welcome the 3% brokerage fee! You'll still receive superior service from attorney brokers working in collaboration with real estate agents, you just won't be paying as much.

Over the last several years the hourly rate approach has proven to be a very effective cost saving strategy for selling real estate. Market conditions were such that seller's had to expend very little effort to attract multiple offers, often within the first few days the property was on the market and frequently for more than the asking price. By paying us an hourly fee to help with all the disclosures and other paperwork related to the sale of their property, home sellers often saved tens of thousands of dollars when compared to traditional real estate commissions equal to 5-6% of the sales price. Indeed, paying a traditional commission was entirely unnecessary because a real estate agent would have to do little more than post the property for sale on Craig's List and/or the Multiple Listing Service and the sale was sure to happen.

next