Every Seller Who Calls Me Thinks They Have Two Options

When a seller calls me, almost every one of them believes they have two choices. Hire an agent and pay full commission, or sell it themselves and save the money. They have usually already decided which kind of person they are. The careful ones plan to pay for an agent. The confident ones plan to do it alone.

I let them finish, and then I tell them there is a third way, and that it is the one most of them actually want.

Here is what I have learned running a brokerage. The two-option story is a leftover from how commission used to work. Traditionally, a listing agent charged 2 to 3 percent of the sale price to represent you on the sell side. Nobody ever explained why the fee was a percentage. It just was. And once you ask the question out loud, it falls apart.

No two homes are the same. Every house and every seller is different. But the process of listing one is the same set of steps every time: pricing, photos, the calls, the negotiation, the paperwork. An $800,000 home is not twice the work of a $400,000 home, but a percentage charges a seller twice as much for it. I could never explain that to a seller and feel honest about it. So I stopped charging it.

That is the third way. Full service at a flat fee. You get everything a traditional listing agent does, and you pay a fixed price for it instead of a percentage of your own equity. At Net Gain that price is $1,995.

I want to be clear about what this is and what it is not. It is not the cheap option. The cheap option is a $99 listing where you are handed a login and left to run your own sale. That works for some people, and I will tell you honestly if I think it fits you. Full-service flat fee is different. It is the logical option. Same service, fair fixed price.

And to be straight about the NAR settlement, because it comes up on every call now: the buyer’s agent fee is negotiated separately these days. That is true no matter how you list. So the real number to compare is the listing fee, and that is exactly where a flat fee changes things.

I believe the percentage model is on its way out, the same way a lot of arbitrary fees eventually go. Not because agents are the problem. Most agents work hard. The percentage is the problem. It charges people for the size of their home instead of the work of selling it.

If you want the full version, the side-by-side of all three ways to sell in Chicago, I wrote it out here: The 3 Ways to Sell a House in Chicago.