Welcome to my new website! I hope to share relevant, current, and fun information here and welcome your feedback on anything posted.
New Model~I have had two recent conversations with friends and clients whom I particularly respect. Each happens to be a CEO. Each has managed to survive and thrive even during the recent recession. In one conversation, my friend was relating part of a speech he recently gave to a graduate real estate class. Among the most salient points: the seven most deadly words in business are “This is how we’ve always done it!”
In the second conversation, my friend complained of a home he was trying to sell in a different market. “I am amazed that your industry has been successful working on a percent of the price. Seems to me that the cost to promote a house is the same regardless of price and a fixed fee to sell it would be more fair to the sellers.”
I am a good listener and I definitely have a mindset of service. I have spent quite a bit of time thinking through and reviewing with yet another long term great friend and client, a new hybrid compensation model which, although still somewhat percentage based, has caps and delivers distinct value to my buyers and sellers. The construct is a 1% retainer, capped at $35,000 regardless of list or target acquisition price, payable at the signing of an agency contract. An additional 11/2% success fee for all amounts over $1MM would be payable at and contingent upon closing.
Essentially this is just discount brokerage, but for an innovation to work, it has to have tangible benefits to all parties. The benefits to the consumer here are quite significant, the benefit to me would be some evening out of the troughs and spikes in income if the model was to be widely accepted. Average selling price of a property in Telluride, according to Trulia, is $2,527,000. The savings for you in this example, would amount to $30,540. As the price goes up for as potential acquisition or sale, the savings become exponentially greater. For most properties under $1MM, it probably makes a lot of sense for the consumer to stick with the traditional model, as I think it favors the consumer. Please contact me if you would like to discuss this idea in greater detail or try it out. I hope you enjoy my new website. Looking forward to a great summer season in 2015!