GreatNest: We Un-Bundle Fees

Posted by Steve Vincent on Oct 21, 2014 10:17:26 AM

In how agents get paid, GreatNest, Real Estate Commissions, Sellers

The Vincent Group at GreatNestUn-Bundling is a term often applied to service industries.  We un-bundle services so that consumers may pick and choose what they want without having to pay for extras. Your cable bill is an example: you may choose only to purchase the television option or you may take the full bundle: phone, TV and Intenet.

But today, instead of talking about un-bundling services, I want to talk about un-bundling fees, because that's what we do at GreatNest and The Vincent Group.

You see, when you agree to list your home for sale with an ordinary real estate company, you are agreeing to a bundled fee. It is a fee designed to compensate multiple entities whether they are involved in the sale or not. That 5% or 6% or even 7% commission you are agreeing to pay (the one that seems so very high) is designed to compensate not one, but four different people: your listing agent, and his or her office, the selling agent (the one who comes in with the buyer) and his or her office. That's four commissions.

When you list your $250,000 home with your friend who works for Acme Real Estate and agree to pay 5% of the sale price as commission (he gave you a deal because, after all, you are friends), that does not mean he is going to pocket $12,500 when the home sells. It means he will get part, his office will get part, an outside agent who works with the buyer will get part and so will that agent's office.

At GreatNest, we think four commissions is too much to pay! So we un-bundle the fee. The first thing we do is decide that every listing we take belongs to the office. Our sellers have the full force of our entire office team working for them. Since the listing agent is the Office, tremendous efficiencies can be achieved thus allowing us to charge a low set fee and saving our sellers on one of the four commissions they would otherwise be obligated to pay at Acme Realty.

We also think it is wrong to charge our sellers a fee designed to compensate an outside broker and agent when it is possible no outside agent or office will be involved in the sale. So even after we put a listing in the MLS, even after it is shown by agents from all over the area, if the buyer is not brought in by an outside agent and office, our sellers don't pay the un-bundled fees to those outsiders. So there is a good chance our sellers will not just save on one of the four commissions routinely charged by ordinary brokers, they may actually save three!

This kind of un-bundling makes sense for consumers. They pay for the services that actually produce a sale - not for those that don't - and the end result is that they save thousands over what an ordinary broker would charge.

So the choice is yours. If you need to sell, you can agree to pay four commissions no matter how your house actually sells, or you can call GreatNest and never pay full commission again! It's a great system!