Online And Empowered Consumers Are Taking Charge And Paying Less
"Internet buyers are better informed about market conditions and more willing to work from home when starting to work with real estate. Fortunately, owners of these changes will definitely hurt not coming, as long as they are able to adapt to new relationships and understand from buyers. evaluate speed and efficiency, not steering. "
As an online merchant, home buyers are changing online home rules
Thanks to the Internet and other technological innovations, real estate information is free than ever. As a result, consumers demand new opportunities, better services, faster transactions and lower prices. According to a recent NAR study, the number of sellers who said they were reluctant to pay sales commissions rose from 46 percent in 2003 to 61 percent in 2004. In 2004, 23 percent of Florida home sellers decided to sell independently, without an agent. According to Planet Realtor, from 14 percent in 2003 and almost twice the national average of 14 percent.
And consumers who support the web demand higher digital IQ when working with real estate professionals. Real estate professionals are expected not only to be familiar with industry-specific technologies, but also to use laptops, cell phones, Sam Mustafa Charleston digital cameras, personal digital assistants, and global positioning systems to keep track of online buyers and sellers.
Pressure down
"If consumers are going to buy a house online, they hope to save money, just as they do through the self-service corridor. As a result, they are vulnerable to online discount brokers and start-ups that promote lower commissions if they only use their agents. These business models advertise to consumers with the idea that they should pay less commissions. "
Realty Times journalist Blanch Evans
Traditional commissions on real estate, which typically account for about six percent of a home's selling price, face consumer pressure and competition. Some consumers claim that traditional real estate commissions do not reflect:
- Home prices today. Years ago, when average-priced homes sold for $ 25,000, real estate commissions were typically five percent, or $ 1,250. Today, when the average house price in South Florida is about $ 300,000, the six percent commission on full-service real estate increases to $ 18,000. Some brokers also charge an additional fee to cover administrative costs. Considering that the average homeowner sells a home today every five to seven years, real estate commissions can have a significant impact on your personal savings and your net worth.
- Ownership. When selling real estate, most landlords calculate the cost of sale as part of the sale price, even if the commission is paid from equity. (Equity is the difference between the value of your property and the outstanding mortgage amount.) Consider this example: You decide to sell a property for $ 250,000, in which you own 10 percent of the equity, or $ 25,000. After paying a $ 15,000 six-percent commission, you'll be left with $ 10,000 before any applicable closing costs. In this example, the commission of $ 15,000 is 6 percent of the sale price and 60 percent of the equity is $ 25,000.
- Perform services. Under the current commission structure, a $ 100,000 home sale for six percent typically costs $ 6,000, while a $ 500,000 home sale costs $ 30,000. Is selling a more expensive home five times harder? Your costs are the same whether the agent spends 1 hour or 100 hours marketing your home. This is one reason why for many real estate consumers, service fees are so attractive.
Development of options
"Consumers want what they want, when they want it, and they will be ready for the most cost-effective source of it. Why? Because our one-size-fits-all approach to selling to sellers is and the buyer is outdated and profitable." access to a variety of help areas. They need it at the right time. That's why new businesses are finding a responsive audience on the web among .com real estate consumers and why owner sales are growing rapidly. "
Julie Garten Judah, Author of Real Estate on Demand: Choose the Services You Need and Pay for What You Pay
Some time ago, you had practical options for traditional full-service and full commission real estate transactions with just one broker. Most sellers pay a single commission for a full set of real estate services, whether they need it or not.
