Watch out for Scare Tactics

10-12% of home buyers and sellers equity is paid out in commission when they sell and buy a home!

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Most home buyers and sellers leave out one of the most important steps in the home buying and selling process. Understanding the commission and comparing rates, service and experience. Leaving out this step will cost you thousands!

As a homeowner if you work with ShopProp to both sell your existing home and purchase a new home both valued only at $500,000 you will save between+$25,010-$58,005. On a $1,000,000 home, you will save between +$49,020-$115,010.

Below is the total commission paid out to agents when a homeowner is selling their current home and buying a new one. Even though the seller pays the commission it’s still in the price of the home. Money paid out in commission = lost equity to the home buyer and seller. When you BUY and when you SELL there is a Listing Agent’s commission paid and a Buying Agents commission paid. With ShopProp you can get the majority of the commission back.

We know some people may not understand or want to take the time to understand the numbers and this is what old school agents are hoping for. If you have questions call us at 888-821-0556 or email helpdesk@shopprop.com.

Let me preface this with not ALL agents use scare tactics, collude and coerce clients but it’s fairly widespread. There are great agents and firms. Also, I know from experience that there is work involved when it comes to buying or selling a home and people have the right to charge and to pay as much commission as they want. I am however against anyone that tries to employ tactics to close off the market for the sole purpose of charging higher fees.

The good news is that I don’t know of one home buyer that if they would have written the offer on the home they purchased with ShopProp versus another agent not only would have won the bid but also received a huge rebate! I also don’t know of a home seller that left our firm to list with another company and achieved a higher price. I don’t know of any firm or agent that consistently achieves higher prices than it’s peers even though they may claim to with padded data. So if you are selling your home you don’t have to be coerced into paying a high commission. That being said below are some abuses you should be aware of.

You can easily establish if your real estate agent is a predatory agent and part of the effort to close the market off to the public so they and the industry can keep commissions high by the tactics they use. Do they:

  • Tell you that only the seller pays the commission? Don’t tell you you can share in the commission when buying a home?
  • When selling your home they operate as a dual agent or have someone in their office/company act as a dual agent and get paid two commissions, the listing and the buying agent commission. These agents will set up frontman and call them buying agents, but in actuality, it is simply another person on their team or office that is being paid a commission. I can tell you for a fact that this charade has cost home owners billions. Often these agents will not do the best to represent you and are more concerned about collecting two commissions. At ShopProp you will notice when we operate as a dual agent our clients only pay the listing side (1 commission). These predatory will also make false claims like they sold the homes they listed when in actuality they listed it and another agent brought the buyer.
  • Tell you how they have an in with other agents and somehow you will get a better price? Tell you agents won’t work with certain agents or take certain offers.
  • Tell you how complicated and risky buying or selling a home is? Try to scare you into thinking that some offers get better consideration than other offers.
  • Try to scare you into the idea that agents will not show certain listings? Tell you that you have to work with a local agent or a particular agent to get the best price when buying or selling. Limited service companies/platform companies where there is no commission offered are exceptions because there is no incentive for the agent.
  • Tell you they have pocket listings or they belong to some kind of insider listing service? Make false claims of getting higher prices with padded data.
  • Tell you they will buy your property so you can avoid the trouble of listing your property. The interesting thing is real estate agents would never dream of selling their own home with out listing it on the open market and offering a buyers agent commission for max exposure.

On just a $700,000 home purchase ShopProp buyers receive over $15,000+ more than buyers working with other firms! The amount our clients get back goes up exponentially as the price goes up! What this means is they are buying homes at a lower price than buyers that are using other firms. It aslo means they can be more competitive than other buyers. At ShopProp there are no hidden fees and the rebate for the buyers and cost for the seller are straight forward.

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1 . An experienced agent like you work with at ShopProp knows how to structure an offer that is as good as a cash offer even if you are getting a loan. Flyhomes came on the scene when the market was an extreme seller’s market and sold consumers on the idea that cash is king. If we have a buyer that wants to submit an offer that is as good as cash, the buyer can waive their contingencies and release their earnest money to the seller immediately. Having cash and still having other contingencies is simply not that helpful. The offer as a whole has to be written competitively. If you use these services you end up paying more for the home because of the hidden fees.

2. If you look at how much more a client is rebated at ShopProp vs Redfin or Flyhomes what you will see is that our clients have a lot more money to work with. Our clients get an extra $13,000+ back when going through ShopProp vs redfin or Flyhomes to buy a $700,000 home. Our buyers can pay an extra $13,000 plus on a $700,000 home and beat the redfin, Flyhomes or traditional agents buyers. We say could pay more but the reality they usually don’t have too. They can pay 2-5K more to beat the bids from other buyers using other firms and still end up paying less money for the property.

3. Cash is King but only when it ends up in the buyers pocket. Flyhomes and Redfin simply found a way to put more of your money in theirs.

4. Zillow offers and offers like them. One of the bigger scams out there are firms offering to give you cash fast for your home. This is similar to a listing agent selling a clients home to one of their own buyers without putting it on the open market. Why as a home seller would I not want the exposure of the entire market? Why would I sell to someone that is going to turn back around and sell it to someone else? If someone is offering you quick cash for your home chances are you can get more for it on the open market. Agents don't sell their own homes to these type of schemes so why would they ask their clieints too? The main reason people choose this option is because the fees are too high to sell and they are generally fed up wth agents. These companies feed off this frustration.

Anytime you feel afraid or an agent tries to make you feel like they are part of an insider real estate market your con artist radar should go off. 95% of home buyers start their search online and every site has the same homes on it for sale. You can check for your self by doing a search on different sites. You can see if there are really any pocket listings by seeing how many sold listings in your area don’t have MLS numbers attached to them (most of these are For Sale By Owners, not pocket listings). You can check how many agents are receiving a higher price than others by looking at sold listing and who has it listed. You will find out there is little to no difference. You can check on what homes sold for and you will find out the BEST offer ultimately won not the one that was presented by a particular Agent.

The funny thing is most old School agents that seller overpay won’t show the home to a prospective buyer that is working with another agent because they want both sides of the commission. Call a listing and tell them you are working with a buyers agent and ask them to show you the home. Most old school agents will not show the home to a prospective buyer that is working with another agent even though you hired them to sell your home. That doesn’t make sense to us! ShopProp will show your home to anyone that wants to see it even if they are working with another agent.

It is my opinion that the real estate industry/agents have been price gouging for years and now with the help of wall street have been trying to come up with new gimmicks to potentially work over unsuspecting sellers and buyers. IBuyer or an offer to buy your house immediately is a new wave in the industry in hopes to keep profits high for agents and wall street. The real estate agent you higher guarantees a certain price for your home if they can’t sell it. The price is low enough that had they done their job and marketed it correctly they would have found a buyer 9 times out of 10 at a higher price. These firms are working with wall street investors in hopes to get the homes sold to them under market.

The other thing to watch out for are Gimmick exchanges that are popping up that are trying to compete with the MLS. Competition is great if they are trying to open the market up not limit the market to their exchange. These exchanges provide less exposure but claim lower fees. You can list on ShopProp for example and pay $0 commission if you sell on your own and get the exposure of the MLS, zillow and other exchanges. With the ShopProp Guarantee, we will beat any verified published price including prices on these new Gimmicky exchanges. With ShopProp you can pay out as little commission as you want to the buyer’s agent so the old rule of 2.5-3% buying agent commission is not in play. If you listed with us, for example, you can offer $500 to the buyer’s agent for example and pay the ShopProp listing fee and you would pay less commission than any of the new exchanges and get more exposure. We utilize the massive MLS exchanges and all the other NON MLS sites that are already there. We just charge lower fees.

Please don’t misunderstand me, as I said there is work involved when buying or selling a home and I am not against anyone being able to charge or pay someone any amount they want. I am against an industry or agents using scare tactics in an effort to limit competition to keep commissions high in a market that most of the public is involved with.

I personally believe Real Estate Commissions have translated into billions of dollars of losses for consumers. I also believe it was part of the 2007-2008 crash. We just saw a steep drop in June 2018 and it was quick in noticeable due to the commission. The longer and faster the trend up the more commission is in Home Prices. (see chart below)

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