How much can a seller save with Home Sense?
Let’s look at three different scenarios…
Traditional Real Estate Model:
Let’s take a $400,000 home sale for example. In a traditional real estate model, the seller would pay the listing agent a 6% commission and half of that will be shared with the buyer agent. So, the listing agent gets 3% of the sale price, and the buyer agent also gets 3%. Yes, you read that right… the seller (or the listing agent) actually pays for the buyer agent to negotiate against him! At closing, the seller will pay the listing agent 3%, or $12,000. The buyer agent will also receive 3%, or $12,000. So, the seller has paid a total of $24,000 in agent commissions and nets $376,000 at closing (excluding other normal closing costs like title insurance, repairs, transfer tax, prorated property taxes).
Home Sense Model – Buyer Represented:
For the Home Sense scenario, the seller pays Home Sense 1% total commission at closing. If the buyer has a buyer agent, that agent will be paid directly from the negotiation between the buyer and the buyer agent. This may be 1%, 2%, 3% or more of the sale price. But whatever the buyer agent fee is, the seller does not pay it. So, for this scenario, the seller pays $4,000 at closing to the listing agent, which is a savings of $20,000 ($24,000 – $4,000)! Again, the buyer agent is paid directly by the buyer, not the seller and the seller nets $396,000 at closing (excluding other normal closing costs).
Total savings: $20,000!
Home Sense Model – Buyer Unrepresented:
Another scenario could exist if the buyer is unrepresented and chooses to remain that way throughout the transaction. In this case, Home Sense, acting as the listing agent, would charge a total commission of 2% to the seller: 1% to represent the seller and his best interests, and 1% to help the buyer prepare the purchase and sale agreement and ensure both parties make it safely to closing. So, the seller would pay 2% total, or $8,000 in listing agent commission at closing, saving $16,000 ($24,000 – $8,000) over the traditional 6% model above. The seller nets $392,000 at closing (excluding other normal closing costs).
Total savings: $16,000!
A 1% total commission? Is that legal? I thought it was supposed to be 6%.
Yes, it’s absolutely legal. Many agents must split their commission 50/50 with their office broker. So, if an agent charged a 3% listing fee, they’re actually getting compensated only 1.5%. And if a referral is involved, that’s 25% less, or a total of 1.125%. Now we’re getting close to the 1%. With Home Sense, there are no referrals involved, the office broker is the same person as the listing agent, so we are not splitting our fees with anyone else, we are not paying an expensive lease for a downtown Nashville office, and we don’t host elaborate employee parties.
According to federal and state laws, real estate commissions are not set industry-wide, even though most include the familiar 6% due to geographic tradition and the requirement to split the commission between the buyer and seller agents, instead of a single transaction broker like Home Sense. So if Home Sense charges 1% and the industry standard is 6%, where does that extra commission go? It stays with the seller!
The real estate rules and ethics in Tennessee allow for significant latitude in how real estate services are offered. And for that, we are very thankful because that allows us to take a different path and separate ourselves from the pack by going “over and above.” We’re so excited about what we do and how we do it that we guarantee your satisfaction and offer any of our clients the option to cancel a listing agreement due to lack of industry transparency, integrity, and honesty.
Are there any upfront fees or other costs?
Absolutely not. Nothing is due upfront and the only fees the seller pays are either the 1% commission if the buyer is represented by an agent or 2% commission if the buyer is not represented by an agent, all paid when the home goes to closing. That’s it. We do not have extra admin fees, extra transactions fees, extra MLS listing fees, agent closing fees, silly “office” fees, etc.
What area does Home Sense cover?
We service the entire state of Tennessee. If your home is out of our comfort zone of Middle Tennessee, we’ll find the best agent to honor our 1% listing program or service it ourselves for a 1.5% listing fee.
Alright, what's to catch, really?
We have a minimum $4,000 listing fee, that’s our only “catch.” But even for a $300,000 home sale, we save sellers up to $12,000 to $14,000, and without sacrificing service! We don’t know if that’s a “catch,” but it’s the one thing that differentiates us from every single other agent in Tennessee.
The real estate rules and ethics in Tennessee allow for significant latitude in how real estate services are offered. And for that, we are very thankful because that allows us to take a different path and reinvent real estate. We’re so excited about what we do and how we do it that we guarantee your satisfaction and offer any of our clients the option to cancel a listing agreement due to lack of industry transparency, integrity, and honesty.