If you're thinking about selling your home, you'll have to make many decisions. Not only do you need to figure out what town/state you're moving to, how much you'd like to sell the home for, and the timeline of selling your home - you'll also have to choose how you want to sell your home.
Believe it or not, there are many options out there. Some people elect to sell their home themselves, also known as a for sale by owner transaction. However, more commonly, people choose to work with a real estate agent to oversee the entire transaction. After all, with most things in life, it pays to higher a professional.
Working with a real estate agent can be expensive, as many realtors charge a 6% commission rate. In Nashville, the average home price is $300,000, and the average realtor commission 5.8%. This means on your average home sale, the homeowner pays $17,400 in commission fees. We agree, it pays to work with a professional, but why should you pay that much? You shouldn’t, you should work with a low commission real estate agent.
A low commission real estate agent is a real estate agent, or brokerage, that helps you list your home and charges you a discounted agent commission structure. And yes, this is completely legal! Realtors are allowed to discount their commission - although many agents won't advertise that for obvious reasons. Your average realtor will charge a 6% commission.
Unwilling To Pay 6%? Then Choose A Discount Real Estate Model
If you're unwilling to pay a 6% commission fee on your home, we don't blame you. There are lower-cost options on the market, which will help keep more profit in your wallet when the transaction settles. The two most common low commission real estate options are:
For a flat-fee, you can pay a company, typically $300 - $1,000 in the Nashville area, to list your home on the MLS. This is all you'll get. These companies typically do not provide any listing agent support or assist in facilitating the transaction. Flat fee MLS companies also will not assist with helping you determine a list price or other crucial aspects of the home selling process. Most sellers that choose the flat-fee MLS option do so solely for the reduced commission fee. Keep in mind that with the flat fee MLS option, you are still expected to offer a buyers agent a competitive commission of between 2.5% - 3%.
You can work with a full-service low commission realtor
Also known as discount brokers, these are real estate companies that in many cases offer the same full-service support a traditional realtor would, but charge a reduced commission. Felix Homes is a low commission realtor or discount broker who is a top white-glove, full service, real estate company. At Felix Homes, our services go beyond that of a flat-fee MLS company as we provide the same services any traditional agent would such as assistance in determining a list price to hosting an open house and so much more.
Commonly Asked Questions About Real Estate Commissions In Nashville
How much do low commission real estate agents charge as a listing fee?
Discount brokers all charge different rates, but they are all less than the typical 3% listing agent commission rate a traditional real estate agent charges. For example, Redfin charges 1.5%, whereas Homie and Trelora charge a flat dollar fee. We keep it simple at Felix Homes, with a low commission rate of just 1% for our services.
How can these low commission real estate agents charge sellers less?
In almost every case, a low commission brokerage will leverage employees instead of contractors. This creates efficiencies, and greater efficiency leads to these top real estate agents or brokers being able to sell more homes. This is a different business model when comparing it to the typical franchise/contractor model of some of the well known real estate groups.
What are some of the pros of having an employee-based business model as a discount real estate brokerage?
At Felix Homes, we have an employee-based business model. Here's why this model works for us. We embrace the concept of specialized roles. Our in-house team is the aggregated sum of highly talented individuals in their own respective areas. We are not trying to be the jack of all trades like a traditional realtor. Instead, we have employees that lead our marketing team, manage our technology, take care of prospecting, and even shoot professional photos for the home. This allows us to keep our agents focused on what they do best, selling a house!
Considering an agent doesn't need to spend time running their finances or creating a new social media post, our agents are able to spend more time focused on selling a home. Our top agents at Felix Home's sell 3x more homes than the typical agent in the Nashville area.
Felix Homes' agents don't pay outrageous brokerage fees either. A traditional agent typically needs to pay their brokerage 50% of their agent commission, which is part of the reason why they refuse to operate on a low commission structure. Our agents don't have to pay this fee most brokers charge.
We leverage better technology for a quicker sale. Because we actually employ technology experts, we leverage the top tools to help us sell your home more quickly. Whether we use this technology to improve your home's position online or when we take a beautiful aerial view photo of your home, we're leveraging the best in class tools, software, and equipment to get your house in front of more buyers.
Our agents pride themselves on providing the full white-glove service for all of our clients. Our level of service is what we're known for, and frankly, the top marketing tool we could ask for. By simply providing an over-the-top customer experience, our sellers and buyers become our biggest advocates. Word of mouth is a free form of marketing, so we have a very low customer acquisition cost! Despite being a discount real estate brokerage, you will not be getting a discounted service level!
What are the cons of the independent contractor model?
Quite candidly, the independent contractor model most brokers employ is too expensive. These contractors are required to pay 50% of their commission to the broker, despite the broker having little to no involvement with the sale. Therefore, these contractors aren't willing or able to discount the commission they charge on their services, because the broker is already taking a large cut.
Most traditional agents in the Nashville area only do one sale per month. This is because these agents are essentially their own business. They have to do everything from; their own marketing, their bookkeeping, prospecting, and selling. They aren't just focused on the sale, but instead, have to adapt the jack of all trades approaches just to run their business. There are only so many hours in a day and your agent should spend their time focused on activities that will lead to a successful sale for you, the seller.
Most real estate brokers lack sophisticated marketing techniques. This complements the above point, but if the seller's agent is focused on all other aspects of running a business, how can they possibly dedicate enough time to properly market their homes? Unless you have a dedicated marketing team, you can't leverage the best, most sophisticated marketing tools, or technology, in the business.
There is nothing that differentiates one 6% broker from others. Traditional real estate agents are the most common as many feel like being a traditional agent has the most upside potential. Instead of following the herd, we step to the side and go in our own direction as a discount broker.
What kind of homes do low commission agents specialize in selling?
Most low commission real estate agents are focused on listing homes from $175,000 - $1,500,000. This includes single-family homes or condos. Home's that are unique, such as properties priced above $1.5M, homes with 10+ acres, homes located in rural areas, or homes in disrepair are better managed through a traditional real estate agent.
Are low commission agents licensed?
Absolutely! Just because we are a discount real estate agent doesn't mean we can skip out on our education. We go through the same state licensing requirements as any other realtor. We became a low commission agent by choice, to help you save money. But our education and licensing is the same.
Do low commission realtors provide less service to sellers?
This is a complicated answer, as every low commission agency has its own set of practices and service levels. Some low commission realtors, such as Homie - a Utah based company - focuses on a digital-agent experience. They will not meet with you in person, nor will they visit your home or host open houses. Their listing agent services are done electronically.
On the other hand, other low commission realtors, such as Felix Homes, provide you with a full list of agent services. In fact, because we have a dedicated team that specializes in specific roles within our company, we believe we can provide a better service and experience to our sellers. This may include; listing your home, running multiple open houses, leveraging top-notch marketing, and providing prompt customer service, you can count on us to sell your home.
Introduction To Felix Homes
Our company, Felix Homes, started in 2018. Our objective is to create the best, full-service real estate experience for our clients and simultaneously provide the most financially responsible way to sell a home. We're a local real estate company serving Nashville and neighboring communities.
Our objective is to help sellers get the highest price while charging them a lower commission. That said, just because our listing commission fees are lower than typical agents doesn't mean we offer a lower level of service to sellers. We are still a full-service real estate firm committed to our clients. Our discount real estate business is not the cheapest way to go, folks can certainly list their home as a for sale by owner transaction - but if you're looking for a professional, we're the agents that can help.
Our lower commission approach allows us to sell more homes. On average, our agents sell 3x more homes than the Nashville average. More and more people in the Nashville market are looking for a listing agent who won't charge the full 6% commission fee to sell your home.
The Possibilities We Provide Each Home Seller
We're on a mission to sell your house for less commission because we truly want to help more and more Americans live a more financially responsible life. The debt crisis is weighing heavily on many Americans, and many of us can benefit from having a bit more money in our bank account each month.
On average, when we sell your home, the homeowner keeps $8,100 more profit in their pocket. Imagine what you could do with an extra $8,100.
Some of our sellers; paid off a large chunk of their student loans, took a family vacation, or got rid of a credit card expense that was costing them a few hundred dollars per month! If you're looking to sell a home just to buy a new home, think about how much money you can save per the lifetime of that loan if you put down an additional $8,100.
The Unspoken Reality
When technology is done right, it makes life easier. The same is true for real estate. Most buyers find their own homes these days. The days of driving up and down streets for hours on the weekend are long gone. Zillow, Realtor.com, and Felix Homes' search tool can help you find your perfect home all from the comfort of your living room couch. The job of a real estate, in today's modern world, is so much easier than it was many years ago. The same can be said for the life of a real estate agent. All of the technology tools from customer relationship management software to electronic signature platforms make the job of an agent easier.
Yet the 6% commission rate hasn't changed. Most agents are afraid to admit the truth, that the job is easier today. The more the public realizes this, the less accepting they'll be of paying a high fee just to sell. The public will look for either flat fees, or discounted fees, as they realize the traditional realtor is getting too much money.
Additionally, home prices are surging. A higher commission rate made sense when you could buy a home for $100,000. But those days are also long gone, especially in Middle Tennessee and now your average Nashville home is roughly $300,000. A 6% commission on $300,000 is a lot of money!
The Felix Homes Approach
In addition to saving you money, we believe in offering sellers an increased level of transparency. We're proud of our proven system and would love to give you a glimpse into our process and the services we provide to help a home seller get the best price for your home.
Step 1 - The fact find
Our in-person home valuation is when a Felix Agent conducts their initial fact find of your home. We get a sense of your home's most appealing selling features, inform you of the target price we should shoot for, and even help you identify minor home improvements to complete before listing your home on the MLS.
Step 2 - Professional photos
Our professional photographers will come to your home and capture the best photos possible. We provide props for stagings, such as artwork, flowers, and accent pieces to really make these photo's pop for the photoshoot. We'll take roughly 40 HD photos, including photo's taken from the sky with our drone. Our editing team edits the photos accordingly, and in under 48 hours, these photos are ready to be shared with the world.
Step 3 - Your home is now on the market
Roughly 48 hours after the photoshoot, the actual home selling process can begin by getting it listed on the MLS. This syndicates with over 70+ real estate websites, allowing a buyer easy access to finding your home. We'll take to social media and run various Facebook and Instagram ads. We're no stranger to hosting an open house event, providing you with a professional yard sign, or listing your home in our weekly email newsletter. Each home gets a custom marketing approach because each home is different. We do not believe in a one-size-fits-all approach. We want to help the seller get the best offer possible. The only way to do that is to make sure the right buyer can find the home through a custom marketing campaign.
Step 4 - The offers will begin flowing in
Not long after your house goes on the MLS, your agent will begin to get various offers. We're not just a listing agent with the goal of selling a home, we're also educators. There are various types of offers we will receive from a buyer. These offers can include a full cash offer, conventional loan, FHA loan, or a VA loan to name a few. We'll review each offer together and help you understand the pros/cons of each. There are many variables to take into consideration. For instance, will there be a financing contingency, appraisal contingency, or inspection contingency? As a seller, these waters are difficult to navigate alone, but with our experience, we'll help you get through them as efficiently as possible.
Step 5 - Accepting an offer
Once we accept an offer, the closing process starts. During this time, many clients have questions. Have no fear, your dedicated agent will always be just a phone call away. We'll help you get the price you want from your home, and ensure the offer you accepted was the right one from the pool of offers received.
Step 6 - Closing day
Congratulations! You've officially sold your house! A new owner will move in and create many fond memories in that beautiful home.
Why Do 6% Agents Love To Hate On Discount Real Estate Agents?
That's it, that's our process. It's straightforward, comprehensive, and complete. Why would a traditional realtor throw shade at a model which saves the buyer and seller thousands in commission fees?
A traditional realtor may throw shade at our process because they feel threatened by the way our industry is changing. Discount real estate brokers are disrupting the real estate industry, reducing the agent commission, listing fee, and working with sellers. Most folks are scared of change, we embrace it. We realize the fee you pay to work with a traditional realtor is too much, and we're not going to tolerate it anymore. After all, you work day after day to pay your mortgage in an attempt to build home equity as an investment for your future. When it comes time to sell, why should this hard-earned equity go to the realtor?
Not only do we have a lower commission, but we also provide superior service. You can fact check our data. Our average sales to list price is 100.04%, which is industry-leading and well above the Nashville average. Additionally, most of our homes stay on the market for just 33 days, another industry-leading statistics.
If you're in the Nashville area and have more questions about selling your home or just general questions about low commission real estate agents, we'll be happy to chat! Our passion is real estate, we can talk about it at any time of the day.
Felix Homes has full-service agents who will help you sell your home for the best price possible. We only get paid after your home sells, and we'll keep more profit in your pocket. If we act as both the seller and buyers agent, you'll keep a windfall of profits as our all in commission fee will be just 2.5% instead of the standard 6%. That's right, we also represent buyers and when we combine both the buy and sale in one transaction, everyone wins!
Discount brokers are here to stay. The real estate industry was positioned for change, and we're proud to be part of it.