Well, as much as we dislike talking about ourselves…its only for YOUR GOOD. Lately we have had many questions on our business model. Most of them start off like this: “What the heck is flat fee buyers brokerage” or “Whats the catch, this sounds too good to be true.”
We understand its a very new and innovative way to conduct a real estate transaction but its nothing new and we are certainly not the first company to perform such services, however, the way we package it we think is unique.
Ok….so what is flat fee buyers brokerage
Flat Fee Buyers Brokerage is a real estate brokerage model which serves to buyers only and works for a set (flat) commission fee. In a traditional real estate brokerage transaction there are two brokers involved: 1 Listing Agent who represents the seller and 1 Buyers Agent who represents the buyer.
Lets use a $1,000,000 purchase as the example here.
Typically the listing agent will charge the seller 6% to list this $1,000,000 property and they most likely always set aside 50% of that if a “Buyers Broker” brings a buyer client and performs the sale of the property. (if the property is sold direct by the listing agent..the lucky agent keeps the whole $60k!!!) So in this example, as a buyers broker, we would be compensated $30,000 (ya, I know…awesome!).
Now in the flat fee world, as one of our clients, we would be performing all of these Buyers services for you for a flat fee of $5,000. Because at the end of the day, why should we be compensated more if you spend more? Thats backwards in our opinion!
Back to this example: So we get a check for $30,000 at the closing (thank you), however, our contract with you notes that we were to work for you for $5,000 and any commission paid to us by the seller above $5,000 is to be refunded to you….SO…..in this example we would be cutting you a FAT check for $25,000 – nice perk huh
I know, screwy industry, screwy model…but thats what it is today…there is no question it will change someday, but for now, thats how it works.
Next questions that usually comes is…”Why do we do all of this for $5,000″
1. We think we are that good! (kidding)
1a. We believe our business model is the model of the future (near future)!
2a. We are web-guys, so most of our clients find us on the web, are highly engaged in the transaction and utilize our website.
3a. Why should we get paid more if you spend more We are supposed to be getting you the lowest possible price, right?
4a. The Atmosphere: No sales take place in our office. You engage us as a highly knowledgeable consultant, we work for you, search for you, negotiate for you, and advice you on what we truly believe is best for you.
5a. Its fair a deal, we love what we do…and we are pretty darn good at it!
So why $5,000
Hmm…now that is a good question!
At the core of our business model the “Flat Fee” structure … not the dollar amount connected to it. We just believe that in Boston we can operate a profitable business and be highly competitive at $5,000 flat fee structure. Who knows if we are right…hey, we can always change it if we need to…but for now…our lucky buyers get us for only $5,000!
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