Photography contributed by Chattanooga Area Chamber of CommerceTechnology has changed nearly every major U.S. industry. Chattanooga firm Real Estate Brokers uses everyday technology to reduce the cost of home selling, and passes those savings on to clients. The firm has created a program that cuts their typical commission from 6% to 4% on single-family homes.
Trend caught up with George Patten of Real Estate Brokers to talk about changes in the industry and how they benefit Chattanooga home sellers.
Trend: How has technology changed the day-to-day job for real estate professionals?
Patten: When I first started in the industry in 2001, potential buyers didn't have access to homes for sale unless they happened to drive by a sign or walk by our office, where we had flyers taped up in the windows. Agents would spend days driving buyers around a community, showing them as many options as possible. And if a potential buyer called on a property, you had to be at your desk to answer, or you had to pay someone to sit there while you drove other clients around town.
Improved technology, from online home listings to electronic signatures, changed everything for us.
Now, buyers have immediate access to listings all over the world; they often come to us with the exact house they want to see. Online home pricing tools have taken most of the mystery out of pricing your home. Sellers know exactly how much their neighbors paid for their houses, and they know what they can charge.
As brokers and agents, we no longer need big offices with big windows where we tape listing flyers; the internet provides a much better solution. And we don't staff phone banks for incoming calls. Our cell phones find us at any time of day or night. Technology has simplified so much of the buying and selling process.
Trend: If someone wants to sell their house, what should they know about real estate commissions?
Patten: For many firms, the home seller agrees to pay their listing broker a percentage of their home's selling price – often 6%, but the seller can negotiate. Once the house sells, the listing broker splits the commission with the agents and brokers on both sides of the sale – buyers and sellers.
While the percentages look small, commissions impact profitability. The difference between 6% and 4% commissions can be the difference between a seller breaking even on their home sale or being able to put $10,000 in the bank after closing.
Graphic contributed by Chattanooga Area Chamber of CommerceTrend: How is Real Estate Brokers able to set such a low commission for home sellers?
Patten: We recognize that the process of buying and selling houses has been simplified, and the expensive infrastructure that was once required to operate a successful firm has largely disappeared. We can run a top-performing agency with a laptop, a cell phone and a reliable car. And since our costs have come down, we want to pass those savings on to our selling clients.
We still split commissions with buyers' agents and brokers, so they are fully incentivized to bring us motivated buyers. Our take-home is less than when we operated on the old model, but when sellers see their savings and how simple the process can be, we get a lot of referrals.
Trend: What services do you provide a home seller for this lower commission rate, and how do the services differ from a full-commission brokerage?
Patten: We offer the same services now that we did before we lowered the sellers' commission. Our team will manage the process from start to finish – professional photography, all online listings and social media promotion, advising on staging and creating flyers for open houses.
The paperwork and contract process is managed in-house, as are coordinating the inspection, appraisal and contingency removal. The only real difference is that we perform all of the same functions in our home office or at one of our favorite local coffee shops.
Trend: For a first-time home seller, what should one know about the process?
Patten: First, work with your agent to identify any home repairs or staging that can accelerate the process. You can find buyers in the market for fixer-uppers, but if you are looking for top dollar when you sell, it's best to present the home as a finished product.
Second, getting a contract on your house is exciting, but is just the starting line of the race. Many home sales are derailed somewhere in the inspection, appraisal or financing process – all of which occur after your contract for sale has been signed. It's important to have an experienced agent representing you who can facilitate the process and ensure you save time, money and your sanity.
Trend: COVID-19 is on everyone's minds. How have you changed your business during these challenging times?
Patten: The safety of our team and our clients is the most important thing. Our unique business model had already implemented a lot of digital tools, so that was easy. In addition, we've expanded our virtual tours to accommodate social distancing. We're also following the recommendations from the National Association of Realtors, such as only showing homes when they are empty, not riding in the car with clients and asking people not to book in-person showings if they have, or recently had, a fever. Currently, our team is working on an appointment- only basis, and we aren't hosting open houses. We'll continue to follow best practices as things progress.
Real Estate Brokers, LLC is actively involved representing clients who are buying or selling homes in the Chattanooga, North Georgia and surrounding areas. Learn more at rebhomeshop.com.