REC Difference :: Dollars and Sense

"If you're not part of the solution, then you're part of the problem."

This favorite quote of mine motivates me every day as we're building The Real Estate Collaborative (REC). We are working hard to create a radically re-imagined real estate brokerage that corrects some of the norms we believe the real estate industry has gotten wrong. Our focus is on creating a consumer-centric experience from beginning to end. 

To be absolutely clear, I love what I do. Helping individuals and families find *home* is a privilege and a very important job. Along the way, I also have met some amazing Realtors who I now call friends.

What I don't love is the real estate industry, as a whole. There are many reasons that Realtors are not perceived in a positive way by the general public. And, I believe we've done it to ourselves - starting with the bizarre and complicated way we are compensated. 

The matter of commissions. Typically, Realtor compensation is a percentage of the sales price. Here are some questions for you to ponder ::

• Which is more - 6% of $450,000 --OR-- $27,000? (no using a calculator or Alexa!)
• Which sounds like more - 6% of $450,000 --OR-- $27,000?
• When a Realtor is a listing agent for a $300,000 home versus a $1,000,000 home and their compensation for each is 3% (dollar conversion = $9K for the $300K home and $30K for the million dollar home), is it that much more work to justify the additional $21K in compensation for the million dollar home?
• If a Realtor has a contract with a Buyer for compensation of 3% of the purchase price of the home, would they prefer the Buyer purchase a $300,000 home or a $400,000 home?
• A Realtor representing a client is a fiduciary. What is a fiduciary?
• What is 2.7% of $346,000? (no using a calculator or Alexa!)

This article says it better than I can...
The Psychology of Percentages versus Fixed Dollar Fees

At REC, we decided at our inception that our compensation was going to be in flat dollar amounts. When you sign a contract with us, you know exactly what you are going to pay regardless of sales price. We believe it's more commensurate with the actual work involved in buying/selling a home and it's definitely more transparent. This flat dollar amount varies depending on several factors, including the property, REC's capacity at the time, the market, the number of decision-makers involved, etc. 

The real estate industry has an opportunity with last year's settlement to take a long look in the mirror and reflect on how we can be more consumer-centric. Change is slow, especially for the largest trade association in North America. So far, it seems like many brokerages, especially the corporate ones, are doubling-down on business as usual. Only time will tell, but REC is not waiting for our industry to change. We are building something better. Better for you and better for our communities.

Reach out to us at hello@therecollab.com or call +1 651-412-3765. We are here to make your home purchase or sale a transparent and successful experience.

REC. Real Estate. Radically Reimagined.