Do you belong to Costco? Why? Because you want to get a deal—save a little money. Ever used a coupon? Ever shopped during a sale? Why? You wanted to save some money. Everywhere in your life you try to be a smart consumer and save a little money except one: when it comes to selling your home.
The real estate industry has home sellers so freaked out that they are literally afraid to save themselves money when they go to sell their home. And we are not talking Costco money here. We are talking about tens of thousands of dollars of potential money savings. It is hard-earned equity that rightfully belongs in the home seller’s bank account, but ends up in the real estate broker’s bank account instead. And why are home sellers so afraid to save money when they go to sell their home? Because they have, and continue to, buy into the one big lie the real estate industry is holding onto for dear life.
You get what you pay for. That is the big lie you will hear over and over again if, god forbid, you try and negotiate a more reasonable commission for the sale of your home. What else can explain why home sellers continue to pay outrageous (for the level of effort) commissions, when there are tons of options to pay less and all impartial research indicates that paying less commission results in more money in the home seller’s bank account? In other words, you actually get less than what you pay for. That is why I call it the big lie.
If I call up the best real estate agent in my neighborhood—assuming there is some way to measure that—to list my home, they will want 5-6% of the sale price to do so. Now, if I call up the worst real estate agent in my neighborhood, guess what they will want to list my home? If I call up an agent with 28 years of experience and one with 28 days of experience, they too will both quote me the same commission to sell my home. Am I wrong, or is real estate the only industry where you pay no penalty for being bad or inexperienced? How can you get what you pay for when agents of different caliber charge the same amount? Surely somebody must be a rip off.
A 2002 study in the International Real Estate Review found that had home sellers, en masse, stopped believing the big lie, it would have reduced the size of the residential real estate brokerage industry by about $30 billion dollars. Of course, today, the number is probably closer to double that amount. And that is why it is even more imperative for the industry to perpetuate the mass delusion of the big lie. There are a lot of people whose Lexus depends on it.
But the era of the big lie is (slowly) coming to an end. Information has been set free, technology is empowering consumers and the Millennials are starting to enter the real estate market. The customary (5-6%) commission is under attack on so many fronts, the big lie will someday soon be called the big laugh. Nobody will buy it, and trying to convince someone that getting ripped off is actually in their best interest will no longer instill fear, but rather a howling chorus of laughter. Be afraid, be very afraid just will not work for very much longer. It might be time to think about leasing a Kia.
To learn how ReaListing puts an end to the big lie forever, click here.
To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.