John Kirkish Discount Real Estate
Now, I'm sure you're thinking, "Why would a Realtor offer his services below the industry standard of 6%. It doesn't make any sense".
Here's why... and it's very simple.
30 years ago Silicon Valley was filled with orchards of fruit trees and houses were priced in line with peoples earnings. The MLS inventory was delivered in a book every two weeks, nothing was digitized, not even flyers. The MLS book was the real estate bible, only real estate agents had it, and searches took hours thumbing through the pages and taking notes. Marketing a home also took time -- printing many photos of the same house and gluing them onto the flyers and marketing them door to door in the neighborhoods.
It was customary to advertise my listings and services in newspapers and real estate magazines, and negotiating contracts took time as contracts were printed and signed with live signatures and then FAXed -- there were no electronic signature platforms to use. Everything took time and was inefficient, and therefore very costly to operate as a sales agent.
Home prices in the East Bay averaged from $170,000 to $225,000... and back then charging 6% to sell a house made sense!
Forward decades later ----> Older, wiser, smarter
The Internet changed everything. Over time, the digital age streamlined everyting. Why couldn't real estate be made more efficient as well?
We set to work designing an efficient system for streamlining real estate processes starting with the brokerage. No more long company meetings taking up our time. We would rather be out in the field helping clients. We successfully researched and tested document scanning apps and PDF handling apps so almost every office function could be handled on our iPhones in the field. We cut costs by eliminating brick-and-mortar offices, so we could spend money for our clients -- on hiring a professional photographer for great interior photos and a good graphic designer to design 1st-rate open house brochures.
We had automated many of the more cumbersome real estate processes,but how much should we charge? What did Henry Ford do? What did CostCo and Walmart do?
CostCo and Walmart reduced prices by selling in volume. When Henry Ford automated the auto industry he made $1 on every car that came off the assembly line. Could we charge only 1% of every home we sold?
Structurally things became easier, faster, and less expensive to sell. At the same time, home prices quadrupled and the broker fee percentages stayed the same. Well, almost, but on average broker fees now are 5% to 6%! ...And it's actually harder to find a seller willing to pay 6% these days.
Compare the difference:
In 1995
Selling at $225,000 X 6% = $13,500 in Broker Fees
In 2022 (peak of the market June 2022)
Selling at $900,000 X 5% = $45,000 in Broker Fees
With these numbers I don't think there's much more for me to elaborate here. Commission earnings have out-paced most salaries in the Bay Area due to inflated real estate prices.
Obviously, my discounted model wouldn't be as successful in places like St Louis, Missouri or Des Moines, Iowa. With Bay Area real estate being so well-off, I can afford to cut a homeowner a break, and keep a smile on my face making a great living and retaining repeat clients.
As always, it's advisable to market your property on the Multiple Listing Service (MLS) as it's the best marketing tool to get your home sold. In doing so, you'd have to compensate a buyers agent if you decide to accept his offer. Most buyer's agents are accustomed to collecting 2.5% to 3%. Therefore the most you'd have to pay in broker fees would be 3.5%.
- 1% to my brokerage Flat Rate Realty and
- 2.5% to the buyer's agent's brokerage.
Saving The Best For Last ----> 1% Total
While on the MLS, if you were to accept a contract with my own buyer who's ready, willing and able through my marketing efforts or if you, seller, have your own buyer ready to purchase (friend, co-worker, family member) that does not have an agent representing them -- then the total broker fee will be 1% of the sales price (min $5,950) as there will be no need to compensate a buyer's agent.
I've researched many brokerages and I don't think there's a brokerage that has yet to compete with this.
If you have any questions you can always email or call me or if you'd like to schedule an appointment to meet, we'll schedule a time that works for both of us to meet... and as always, there is no obligation or pressure to list or sign anything with me. I look forward to helping you!
Best Regards 
John Kirkish / DRE #02070987
JohnKirkish@gmail.com
510-890-8028