1.   What is FSBO?

FSBO, otherwise known as ‘For Sale By Owner’, is the sale of a home without the use of a real estate agent in the process. This method of selling a home is primarily used to save money, but it isn’t always the easiest way to do so. 

Without representation from a real estate agent, you’re responsible for everything involved with the home sale. This means setting the price, managing all of the legal paperwork, negotiations (i.e. home price, repairs, etc.), and the marketing of your home to make sure your property is getting the amount of exposure it needs to sell.

If you’re able to handle all of these aspects of selling your home, great! You won’t need to pay an agent, which results in saving a few thousand dollars in the process. However, if you mess up somewhere along the way, it could cost you more money than it would’ve taken to hire an agent. It’s important to find the happy medium between paying a large commission fee for an agent vs. taking the risk of doing everything yourself.

That’s where Scout Realty comes in. Rather than worrying about commission fees, we sell your house for a low flat fee. 

That’s right. No commission and no hidden fees. 

Just one low, flat fee.

This gives our clients the best of both worlds. We handle the marketing, paperwork, negotiations, open houses, and anything else that’s needed to sell your home so you don’t have to list it as FSBO, but you won’t pay that large commission fee that you would with a traditional brokerage.

2.        Pro’s and Cons of selling FSBO

As with anything in life, there are plenty of pro’s and cons of listing your home as a FSBO. Before we dive in, let’s first take a look at a couple of key statistics: 

According to Zillow.com, “36% of sellers attempt to sell their homes themselves, but challenges along the way lead many of them to eventually hire an agent. In the end, only 11% of sellers end up selling their home without a real estate agent.” This simply proves the level of difficulty that’s associated with selling your home without using an agent.

Another statistic to note comes from DaveRamsey.com, and states “Sellers using the FSBO option sold their homes for less than the median selling price of other homes. In 2018, FSBO homes sold at a median of $200,000. That’s a lot lower than the median price of $264,900 for agent-assisted home sales.” 

So, if you’re really trying to save money by listing your home without an agent, it’s important to note that you may end up selling it for far less than what it’s really worth.

Let’s take a look at some more Pro’s and Cons:

Pros:

–   The most notable “pro” to listing your house as FSBO is that you won’t have to pay a commission fee to a real estate listing agent. This is a large reason why most people go this route.

–   You’re the only one that knows your house as well as you do. This gives you plenty of expertise when discussing its best features and attributes that might be appealing to buyers.

–   You’ll control the open houses, viewings, negotiations, etc. This gives you the control over the entire sales process.

Cons:

–   Although you aren’t paying a commission fee to a listing agent, you’ll still more than likely end up paying anywhere from 2.5% – 3% to a buyer’s agent. If you don’t offer a commission fee to buyers’ agents, they will be reluctant to show your home, resulting in a much longer time on the market.

–   The amount of work required would be quite daunting. Negotiating contracts, scheduling showings and open houses, staging your home, and making sure everything is being done legally will take quite a lot of time and effort, which many people can’t afford to spare.

–   You may undervalue your home, which means you lose out on thousands of dollars.

Fortunately, Scout has been able to help clients that originally tried to list their home as FSBO.

Take Leslie for example. Here is her take on why using Scout to sell her home was far better than listing her home on her own:

 What made you decide to list with our agent?  

“I could get full-service assistance selling my home while saving a considerable amount of money.”

What advantage did you see over listing by yourself? 

“Listing with Scout gave me much broader visibility with being on the MLS (Multiple Listing Service). Plus, I needed to move before my home was sold. By listing with Scout, they took care of all the showings and kept me updated with immediate feedback from potential buyers.”  

Did you get the result that you were hoping for by listing with us?  

“I had a solid offer on my home within 2 weeks.”

What would you tell other DIY sellers after your experience selling with Scout?

“DIY sellers have to rely on potential buyers driving by and seeing your signs. I wasted a month thinking I could do it myself.”

Why were you considering selling on your own?

“The potential savings on commission is the biggest attraction but with Scout, you still save money without having to deal with the hassle.”

3.       Do FSBO sellers pay commissions?

If you decide to sell your home without using an agent, you cut the amount of real estate commissions that you’ll have to pay in half (roughly). However, more than likely, you’ll still end up paying 2.5% – 3% in commission fees to the buyer’s agent. This means the notion that FSBO sellers “don’t pay any commission fees” is false. As mentioned prior, if you decide to not offer the buyer’s agent any commission fee, they will more than likely not show your house to potential buyers, which can significantly increase the amount of time your house is on the market.

4.       Can FSBO homes be listed on the MLS?

The MLS (Multiple Listing Service) is one of the best ways to increase foot traffic on your home. Listing your home here allows realtors, brokers and third-party sites, such as Zillow.com, realtor.com, etc. to pull your listing into their database. However, only licensed real estate agents have access to post listings on the MLS database. If you are listing your home ‘For Sale By Owner’, you will still have the ability to list on the MLS, but you’ll have to pay anywhere between $99 and $500 for a package to do so. The price you’ll pay typically depends on the length of time you are going to list your property, and whether or not you’re able to include photographs, legal forms, etc. With Scout, we handle all of that for you in our flat fee listing packages, so you’ll never have to worry about how much you’ll end up dumping into the MLS before your home sells.

In summary, if you’re wondering whether or not to list your home with or without a real estate agent, just know that with an agent from Scout Realty:

1. You can avoid the full-time job of having to balance your normal just with being a full-service real estate agent on your own.

2. You can avoid the stress of worrying about meeting all of the legal requirements that are associated with selling a house, as well as locating all of the legal documents needed to close.

3. Your home will be seen by far more active buyers, which means your house sells faster, and for a more competitive price.

What is Flat Fee Full Service Real Estate? 

A Flat Fee Full Service Real Estate Brokerage is a company that will list your home for a fair flat fee while providing a full service experience that includes everything from inclusion on the MLS to a fully executed marketing strategy that markets and sells your home in the fastest amount of time for the most amount of money. 

This is an important concept for homeowners to understand because traditionally, the cost of most real estate transactions was tied to the value of the home, rather than the value of the services provided by the real estate agent. 

Flat Fee Real Estate Brokers charge a fixed or flat fee for brokerage services instead of a commission based on a percentage of the sales price of the property.  

Why would a homeowner choose a Flat Fee Full Service Real Estate Brokerage? 

The benefits of listing your home with a flat fee full service brokerage are heavily weighted in favor of the homeowner. 

Transparency

One of the most frustrating things with the traditional model is that while you might know what percentage of your home value you’ll have to give away to your agent at close, you might not know exactly what that money paid for.  With a flat fee realtor, you will know the exact list of deliverables and the costs associated with those elements. 

When you sell your home with a flat fee you have the transparency to know exactly what you are paying for and the value you can expect to receive in the process of getting your home sold. 

Predictability 

A flat fee agent does the same work as a commission-based real estate agent, but they only charge a set amount.  This is helpful because as a homeowner you want to know exactly what you are paying for. 

Similarly, with a flat fee real estate agent you will never be surprised at the closing table with how much money you have to pay.  You will know at the beginning of the relationship what the real estate agent fee will be and that price will not change depending on the final sales price of your home. 

Experienced Agent 

A Flat Fee Full Service Real Estate Brokerage gives you the benefit of an experienced agent that can represent your interests in the transaction and help guide and advise you through the process.  You will never have to worry about an agent being incentivized to give priority to a different client because their transaction is “worth” more which is something that can happen in the traditional commission-based real estate model. 

Having an experienced agent in your corner is a benefit to any person considering selling their home. 

MLS Access

Considering that 44% of buyers start their home search by looking online, according to NAR, the MLS is a great way to gain exposure.   

A Flat Fee Full Service Real Estate Agent will ensure that your home is loaded to the MLS which populates the online platforms that buyers are looking at when they are on a house hunt. 

Keep More Cash at Close

Flat Fee Real Estate Agents understand that it is YOUR HOME and YOUR MONEY. Our goal is to help you maximize the amount of money you put in your pocket. 

When you choose to work with a Flat Fee Full Service Real Estate Agent you are protecting your equity and keeping more cash at close. 

For Example: 

Let’s take a house that sells for $650,000.

When you list with a traditional real estate agent that has a commission based on the value of your home, you can expect to pay your listing agent about $19,500 in commissions! 

With a flat fee full service brokerage, that fee is usually significantly lower. 

At Scout, our full service, flat fee Core Plan starts at $7,500.  

By selling with Scout, you save an additional $12,000 at closing to do with as you wish!

What are other listing models? 

When considering how to list your home it’s important to consider your options.  While Flat Fee Full Service Real Estate is a model that has several benefits there are other ways that you can list and sell your home.

Traditional Commission Model

The traditional commission model is what most people are familiar with when it comes to selling and buying a home. 

A Real Estate Agent is paid a commission based on the value of your home.  That means the amount that is paid can vary depending on how much your house sells for.  

According to Bankrate, these old-fashioned agents typically charge their clients about five to six percent of the sales price.  Zillow says that commissions can be as high as seven percent.  That commission is generally split between the buyer’s and the seller’s agent, but at the end of the day listing with the traditional commission model means that agents will walk away with compensation that was tied to the value of your home, rather than the value of the service they provide. 

Here’s another thing to consider, commissions paid on the value of the home erodes the homeowner’s net worth of the homeowner. 

Two-thirds of American homeowners’ net worth is tied up in their houses.  This means that those families risk a significant portion of their net worth if they choose to sell with the traditional commission model.

Consider this scenario: 

Let’s take an average house with a sale price of $500,000.  If the homeowner has a $450,000 mortgage and they build up $50,000 in equity, if they choose to sell with the traditional model there is going to be commission paid. 

The commission paid on the sale price of the house would be about $30,000 in lost equity.  

The $50,000 that they had earned in equity is reduced to $20,000 because of the traditional commission model. In this scenario, the homeowner that pays 6% on the sale of their house is actually paying out 60% of their equity in the traditional commission model.  

If two-thirds of Americans have their net worth in their house, to relinquish 60% of their net worth to a traditional commission is unconscionable. 

This traditional model that was created before the internet is outdated, harms the homeowner’s net worth and is no longer relevant for the modern homeowner.  

Entry MLS Flat Fee

An MLS Flat Fee option is a service by which you pay a very low flat fee to have your property included on the MLS which is a multiple listing service.  This service then populates the information about your property across a variety of online platforms. 

The main benefit of getting your house listed on the local MLS is that it gets your listing syndicated onto top real estate websites like Zillow and Realtor.com. Websites like Zillow, Trulia, and Realtor.com pull data from these local MLS listings and serve it to their millions of users. 

Knowing that 44% of buyers start their home search by looking online it just makes sense to ensure that your property is included in the MLS.  

Keep in mind, only an agent can list on the MLS, which is the only thing you’re paying for with a flat fee MLS service. In other words, you won’t get access to the other services usually offered by agents.

The MLS is also sometimes called an “entry only” listing, which means that the agent entering the listing into the MLS is not performing any other tasks for the seller. So, for example, interested parties will know not to contact that agent to arrange a showing. They’ll go directly to you, the seller. 

If you choose an entry-only MLS listing you can expect to market your house, host your own open houses, negotiate your own contract, and facilitate the entire contract-to-close process. While getting your house included with a flat fee MLS listing is an important component of marketing your house, you can anticipate that the trade-off for a low upfront cost will cost you in terms of time, energy, and potential money as you work to effectively create leads for your sale and then work to close the deal.

For Sale By Owner 

It can be tempting to dive right in and just sell your house without the help of a realtor.  The thought of just handing over tens of thousands of dollars to someone simply because you live in a nice home makes even the most seasoned business-minded people squirm. 

So while FSBO might feel like a good option to keep more money in your pocket consider this. 

It is not a free way to sell your house, you’ll still need to pay a buyer’s agent… which means two to three percent of your sale price and the seller’s closing costs associated with selling the property. 

You will not be on the MLS.  With a large percentage of homebuyers shopping online before they even reach out to a realtor your home will not be visible to those potential buyers. 

You have to do all the work.  From filing paperwork to hosting open houses, and marketing your property there is a significant amount of time and attention that goes into selling your property and the hours of attention you’ll need to give your property to get it sale-ready, marketed, sold, and ensuring that all the legal documents are properly executed can really add up!

Scout Offers A Better Way 

When we looked at the traditional real estate model and the options that homeowners have to list their homes we realized the flat fee Nashville hypothesis proved the model for the modern brokerage. 

The hypothesis was to help customers by driving down the cost by offering services for a fair fixed fee while raising the value to the customer with a full-service experience to get their house sold in the least amount of time for the most amount of money. 

This nexus is called value innovation where the new model modern brokerage truly serves the best interests of the customer.

We have proven that our flat fee full service brokerage can sell houses faster than the industry standard and for more money. 

We are outpacing the industry average of 30 days on the market whereas ours are on the market for an average of 23.  The list price to sales price average in Nashville is 88% and Scout is selling houses in Nashville at 98.7% list price to the sale price. 

All of this happens because we realize that the traditional model was no longer serving the client’s best interest and that the real estate industry was due for disruption. 

Rather than follow outdated legacy modes of doing business, we decided to take a risk and break the mold of how a brokerage operates in order to provide the most value to our clients.

Our first step was to carefully consider how to best serve our clients. 

We believe that our success ought to be measured by what we give rather than what we take and that preserving and growing our client’s net worth was the best thing we could do for them. 

Working from the understanding that monies produced from a home sale was the homeowner’s equity and not our commission, we decided to do something radically different and offer a flat fee full service offer to the market. 

Scout provides specific services including a proven marketing strategy and a dedicated team to help sell your home in the least amount of time for the most amount of money for a fair flat fee….an amount that you will know upfront and with full transparency as to what you are getting for that fee.

You’ll see that working with a real estate brokerage that is designed to help the homeowner retain their equity it enables our customers to have more cash at close.  This gives the homeowner more buying power for their next home or frees up resources to travel, pay tuition, or even put towards retirement.  Most importantly, this model protects homeowners’ net worth. 

Scout has proven in Nashville that a Flat Fee Real Estate Brokerage is the model for the modern brokerage because it has created a repeatable process for excellence that includes a predictable pipeline of lead generation, excellence in its business operations, and a workforce of full service full-time agents that can cater to customer’s needs at the highest level with a fiduciary obligation to protect the homeowners’ net worth. 

Are you interested in hearing more about Scout and our Flat Fee for Service model? Click here https://scoutrealty.com/selling/ to learn more about Selling with Scout.

2020 has been a year for the history books here in Nashville, Tennessee.  

While headlines of tornado destruction, pandemic-related problems, and the presidential election dominate our headlines, there is a bright spot in Nashville. 

The Nashville Soccer Club is on a march to the playoffs. 

This gives all of Middle Tennessee something good to rally behind in our community. 

The partnership between Scout Realty and Nashville Soccer club is inherently aligned around growing the community and celebrating all that Music City has to offer. 

Scout Realty is proud to be the exclusive real estate partner of Nashville Soccer Club and support the good that MLS brings to our city. 

NASHVILLE, TENN. (PRWEB) OCTOBER 29, 2020

Scout Realty has announced a strategic relationship with Nashville Soccer Club that includes Scout Realty as an official sponsor of the club and the team’s exclusive Residential Real Estate partner.

Scout Realty is the new way to sell and buy your home because they offer full service real estate for a fair flat fee which saves you thousands in commissions, closing costs, and more—all while making your process easier, more efficient, and more enjoyable.

“We are excited to celebrate Nashville Soccer Club’s inaugural year. The presence of an MLS team in Nashville speaks to our city’s growth. Nashville is a great place to live and we are honored to partner with Nashville SC to serve them and their fans,” said Jonathan Harris, Founder and CEO of Scout Realty.

Scout Realty’s vision is to help 10,000 Nashville families save $100 Million dollars of their equity by making homeownership easy, efficient, and enjoyable.

“Scout Realty is thrilled to support Nashville SC as they continue their march towards the playoffs,” said Jonathan Harris.

Other aspects of the relationship between Scout Realty and Nashville SC include increased visibility for Scout Realty through TV broadcasts, the club’s digital platforms, digital in-stadium signage that will feature ScoutRealty.com, participation in fan giveaways, and other opportunities that will be announced later.

ABOUT SCOUT REALTY

Scout Realty has reinvented real estate in favor of homeowners. Scout offers a full service experience for a fair fixed fee; the average client saves over $10,000. Instead of charging outrageous commissions on a home sale Scout helps clients save more of THEIR equity.

For more information about Scout Realty visit ScoutRealty.com

Is your real estate equity eroding? 

It easily might be. Turns out, a simple solution can reverse this trend and build your net worth.

Your inevitable timeline

Financial planners often take their clients through an exercise. On a vertical line, they pinpoint you (or you with your family) at one end of this timeline which represents the present. Then, they place you (or you with your family) at the other end of the timeline which represents the future. 

Along this timeline, no matter if it spans ten or fifty years, you’re going to face financial decisions. They could be to invest, to save for a child’s college, to buy or sell a home, or many other options. As you do so, one of two things will happen. Your future self is either going to have more money or less money. Which will it be? The outcome is entirely dependent on the type of decisions you make along your timeline.

Your timely real estate impact

Along their timelines, the average homeowner buys and sells every five to seven years. This means a person will own about seven or eight homes and have about fifteen real estate transactions in their lifetime. Under the traditional real estate model, people pay a percentage of their home value each time. This directly correlates to their net worth eroding.

Inevitably, you have built up equity and value in your house. Two thirds of American homeowners have their networth tied up within their homes. As you pay a percentage of that net worth, your future self (at the other end of your timeline) will have less money.

Your way out

How can you avoid this negatively correlated erosion of net worth? Meet a fair fixed fee for services. Put very simply, this model doesn’t charge you outrageous real estate commissions which will erode your net worth. In fact, every time you buy and sell under this model, you’re actually preserving your net worth.

Who are “luxury agents?”

I’ve been in the real estate business for 18 years. We’ve done over 1,500 transactions for over half a billion dollars in sales. Because of this, we’ve learned a thing or two. Historically, I’ve seen many agents desire to be called a “luxury agent” who can focus on the “luxury market.” 

What does “luxury” mean?

When someone says they want to be a “luxury agent,” it typically has a lot to do with getting close to rich people: being their friends and charging them commission based on the value of their home. If the commission is based on home value, “luxury agents” can then often increase their pay without equally increasing their work.

What about non-luxury?

Rarely will you see an agent who says “I want to focus on first time home buyers! I want to focus on people who are struggling and don’t make a lot of money. I want to focus on teachers, policemen, and firefighters because they need our help.”

Unfortunately, you’ll tend to see agents migrating towards the luxury market. On Shark Tank, Kevin O’Leary actually calls this out, saying that the world has a big problem: real estate agents. I’ve been in the business for years, and at first it felt like he was taking shots at me, but I had to admit that he had something there. He said agents are eroding people’s net worth and equity.

What about your equity?

When agents want to focus on the luxury market, it has tangible effects. Sticking to only the selling side, if an agent sold one luxury home at $500,000, she’d make $15,000. If she were to sell another luxury home priced at $1.5 million, she’d make $45,000. 

What has this luxury agent done that’s worth earning $30,000 more for the second home sale? They may talk about doing a wine and cheese for brokers (and it better be some quality wine and cheese they’re utilizing). They may highlight a certain magazine where the home is listed, but do these services account for the additional $30,000?

Just because you have the money, net worth, and dream home does not mean that you should give it away when you sell. 

What now?

If you hear from someone who focuses on the luxury market, make sure they can quantify exactly what they will do for you to merit the extra money they’ll make. Ask questions, and do pay them more if they have a clear value proposition and clear additional benefits you’ll be offered.

And if they don’t? Preserve your equity. Don’t pay more just because you’re worth more.

I want to tell you a secret.

You’re not going to hear this from other real estate agents. If you know this, it can make you a lot of money. It can equip you to make better decisions.

What’s the secret? Buyer markets and seller markets really dictate the home sale.

Where’s the market balance?

The National Association of Realtors has said that a balanced market is six months. This means that if your home is listed for 180 days, neither the seller nor buyer has the advantage. However, if it sells before 180 days, the seller is winning. If it’s after 180 days, then the buyer is winning. 

What drives the sale?

Does the listing agent actually move the sale of the house, or is the market really driving the value and sale? Even though most real estate agents base their commission on the value of the homes, the listing agent is rarely in a position to actually sell the house. Almost always, the sale is market driven as the type of market is going to drive the sale of the home.

Who’s the seller?

There’s more. I’ve been in the business for 18 years; we’ve done over 1,500 transactions for over $500 million in sales. What I’ve seen is that, typically, the buyer’s agent is showing and tangibly “selling” the house. The listing agent usually has very few opportunities to actually sell the house. The buyer’s agent is the one who brings the buyer, unlocks the door, and walks through the house without the seller’s agent there.

Why the commission? 

Why would you pay a commission in a seller’s market to the seller’s agent, the? On top of it all, the sale is heavily market driven. All home values are determined by what a buyer will pay for the property and what the seller accepts. In essence, the buyer and seller are coming together and saying yes.

What about a flat fee?

If you want to hang onto your equity and preserve your wealth in such a market, negotiate a flat fee for your agent as you understand that they may not be driving the sale of the house. It may have more to do with market conditions, what the willing and able buyer has said, and what the buyer’s agent has done to promote the house. If you’re selling your house, in a seller’s market, and things are selling in less than a hundred days, a flat fee may be your best solution.

What about Scout?

At Scout, we offer a flat fee starting at $5,000. This $5,000 is full-service because we understand that we are sellers in a sellers’ market. Since our sellers are winning, we want to position you to win. Welcome to behind the curtain of how markets influence sales, with strategies of how to succeed.

What does the federal reserve’s deception of the housing marketing mean for you? 

Looking at a twenty year history of the value of homes, we can find the average home value–$200,000–in American during the early 2000s. Looking forward to this year, 2020, we see that house prices have increased to $400,000. They’ve almost doubled in twenty years. 

The increase for agents

This housing price increase is great for real estate agents working off commissions. If you attach a 3% sliding scale, agents who were making $6,000 in 2000 and now are making $12,000 in 2020. We need to ask what agents are doing to warrant making double the income.

To figure this out, since I’ve been in the business for eighteen years, I asked myself what I was doing even just 10 years ago. In 2010, the average home price was around $260,000 which meant the average agent was making about $7,500 per sale. Since the current 3% agent commission rate on an average home means the agent comes away with $12,000, what differences in services result in the $4,500 increase in pay?

The impact of technology

Working back in 2010, the real estate process was actually much more physical and manual. We had to get wet signatures on physical, paper documents. I had a call log; if people wanted to see a house, I’d write down the name, number, and everything else to coordinate with the seller. We had desk computers, SD car plugins, and perilous MapQuest. 

Now, in 2020, we have digital signatures so we can email documents, and with a click and signature, everything stays online and is very easy. We have laptops. We have iPhones to help with photography. We have apps to unlock doors and pull up surrounding listings.

In the ten years as commission doubled for agents, technology has made many things much more efficient, faster, and easier for agents as well. And, this technology has even decreased costs. Often, agents can work less and make more. Unfortunately for the customer, there has not been a clear pass down of benefits. 

The results for you

Home values are skyrocketing. That means your equity should be increasing. Whenever the agent has technological advances that makes their job quicker, easier, and more efficient, I believe there should be a monetary pass down to you as the client.

And that’s just what we’ve done for you at Scout. We decided that we just can’t ride this wave and make money off you. We’re just going to establish what we feel like our services are worth and set a very low fee. This has worked; our clients are saving around $10,000.

The bottom line

Don’t allow the agent community to erode your net worth. Be an informed seller, make decisions based on your best interests. And we know you’ll come out ahead on the other side. At Scout, we know it’s about a win-win and hope that we can win for you.

Have you ever wondered why real estate companies do not offer clear value for the customer? When customers consider all the various local and national real estate brands, how easy is it for them to notice what separates one company from another?

What about sellers and buyers?

It’s very uncommon to find a real estate company that clearly says “hey, if you’re a seller or buyer, this is the benefit of working with us.” In essence, most companies place their value proposition in being agent-centric. They aim to attract agents, because if they do so, theye figure the agents will go and attract clients.

However, companies like Zillow or Red Door have emerged with a great online platform. These companies are able to write an offer right off the bat without even listing the house. Even with their challenges, they, unlike the more traditional real estate companies, are doing a much better job of being client-centric. 

Why does client-centrism matter?

Being client-centric is simple. It means that everything the company and agent is thinking about is with the client in mind. 

The traditional real estate environment could learn from this model by simply asking “what are we doing uniquely different and especially beneficial for the customer? That’s why, at Scout, we started to innovate.  We realized there’s so many companies focused on the agent and the benefit of the agent. And, it’s not that we don’t value, love, and want to serve and benefit agents (because we do). It’s just that we want to be client-centric first and have the agent come second. That’s why, if you visit our website or see our ads, we aim to speak right to the heart of the customer.

What’s the Scout difference?

We are obsessed with adding value to our customers. We’re obsessed about over-delivering, about creating wins for them, about offering flat-fee service pricing rather than charging outrageous real estate commissions. 

What comes to mind when you hear the phrase “real estate commission”?

We each might have different ideas. We may have had various experiences with paying (or receiving) such a commission. However, when we take a step back, do we really understand how commissions  operate, and does the way they function actually make sense?

Unpacking Real Estate Commission

Imagine a real estate agent who does exceptional work. They’ve been in the business for ten or twenty years. They’ve served countless clients, completed extensive coursework, earned many certifications; they are agents with incredible value to offer customers. Then, imagine a real estate agent who has just earned their license four days ago and completed a two week course. 

What you might not realize is that both of these agents–experienced or fresh into the industry–can very literally charge the exact same amount of commission. 

Now, the agent who has been in the industry for twenty years has great value competency to offer their clients and should, arguably, be able to make more than the less experienced agent. This would be true if the real estate agent’s commission was based on their offered value and not the value of the house. 

Yet, this usually isn’t the case. A person who owns the home is often going to make their decision of who represents them often based on their connections. This means that agents frequently influx into and out of the market and around 90% quit by the end of their third year. It’s practically just as easy to get into the market as it is to get out of it.

Rethinking the System

We can put it another way. 

What if I took my car to a car wash, and they priced the car wash based on the value of my car instead of the quality and type of wash I wanted? I would probably drive away. I wouldn’t take my car to that car wash becauseI believe the price I pay should be based on the value of the service. 

Yet, this unconventional car wash model is how we often do real estate. The real estate commission is often priced on the basis of the value of the house, not on the value of the agent.

Finding the New Mission

I believe we have a lot of value to offer clients. And doing so, we want to go on mission to eliminate commission.

This starts sby putting the customer at the center of the conversation. We asked what it could look like if we charged clients a simple, low flat fee for service real estate. We want the clients to win and keep a substantial portion of the equity.

At Scout, we’re doing it differently. We’re disrupting the traditional real estate model and striving to create a customer-centric company by being on a mission to eliminate commission. That’s why we changed our commission structure; we eliminated it. 

It’s for you.