In addition to being a great all-around realtor, Mike Thomas offers something that most other agents don't, lower commissions. Lower commissions might just sound like a detail, but actually, they’re fundamentally important in many real estate deals! You’re not getting “less service” - you’re getting the same service for less, and keeping much more of your hard-earned money. That’s something our clients LOVE.
By the Numbers
These days, the average property in some neighborhoods is around $200,000. So let's take that number and calculate a 6% commission. Would you be surprised to see that the 6% commission is $12,000?
That's quite a bit of money, and if you have a slim margin for selling, it takes a big bite out of your profits. Let's look at how that works.
Flipping a House
Joe and Bob, two handy brothers from Lawrenceville, took a $90,000 house and added an extra bathroom. They updated the walls and put in some backyard amenities. They spent around $70,000 in total, and that's not counting their sweat equity - driving to and from the site and directing all the contractors and everything else.
These two brothers go into the market asking $230,000 - that’s reasonable, right? Unfortunately, due to market timing, they only get one offer in 3 months. The offer is $180,000!
Joe flips and Bob stews and they eventually counter at $210,000. Buyer counters at $200,000. They say okay - because they’re beat and they want to get out and go on to the next thing.
At settlement, they’re looking at that $200,000 price tag. But in addition to any closing costs that they may have agreed to pay, that 6% commission brings $200,000 down to $188,000. Keep in mind they've already put $160,000 into the property - is all their hard work only worth $28,000? They’re additionally frustrated because they have to split that money!
Oh boy. Here you can really see how having the option to do a 4% total commission helps out.
Living in the Home
Let's take another seller who has equity in a property. They bought the house in 1990 for $70,000, and they faithfully made the mortgage payments each and every month, even when it was hard. Eventually, they built up around $30,000 of equity, partially due to a slight increase in market price.
Now they go to sell, and they're looking at taking that $30,000 and subtracting $6,000 (On a $100,000 sale price). But they find Mike Thomas, they sell out, and they actually get $26,000 instead of $24,000! They put that extra couple of grand toward down money for a nicer, bigger home.
Bringing down a realtor’s commission by 2% can be an important psychological factor in a deal. It can be the difference between sellers walking away in frustration and depressed that they can't get more for the property, and a successful deal where everyone shakes hands at the end. Let Mike Thomas take a look at your property in Overland Park, Olathe, Leawood, Lee's Summit or anywhere else locally on either the KS or the MO side. We’re happy to help!