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The kids have left, the house has too many empty rooms, and the yard seems more and more difficult to maintain. Bottom line: The empty nesters are realizing it’s time to move on. And like many baby boomers reaching retirement age, they’re looking to sell their large family home and downsize to a smaller property; one that better suits their lifestyle.
Naturally, these boomers—part of a generation who owns a third of this country’s homes—want to profit as much as they can. After all, they’re selling, what is most likely, their most valuable asset. And part of that profit means spending less money on the sale; i.e., avoiding unnecessary fees.
One way to do that: Take advantage of modern digital technology and hire a full-service brokerage. By doing this, baby boomers can save thousands. Here’s why.
It doesn’t cost 6 percent of a home’s value to sell it anymore
Walking away from a home sale with the most money is an important part of smart financial planning. To that end, a competent agent simplifies the home selling process and accurately prices homes to get the highest offers. At the same time, these services don’t necessarily need to cost 6 percent of a home’s value. Real estate commissions are the greatest expense a home seller has.
Prior to the internet, buyers relied on for-sale signs, newspaper ads, magazines, and agents to get access to Multiple Listing Services (MLSs) and find what homes were for sale. Today, consumers can pick up their smartphones and browse listings on Zillow in just seconds. In 2018, 96 percent of people who bought a home used the internet in their home search. With the internet creating a free and efficient marketplace, it simply no longer costs 6 percent of a home’s value to sell it.
Many baby boomers have been through the home selling process before and question why they should be charged a 6 percent commission when the cost to advertise homes has dropped. In addition, marketing a $600,000 home does not cost more than marketing a $300,000 home. Why pay an agent double for the same time and effort just because a home is worth more? As the U.S. Department of Justice notes, the traditional real estate brokerage industry keeps prices up through a lack of competitive pricing.
“In other areas of the economy, the Internet has dramatically altered the competitive landscape by driving down costs and enabling innovative and more efficient ways of conducting business,” says the D.O.J. “The real estate brokerage industry has been slower to change, with the result that consumers are paying higher commissions and fees.”
the outdated real estate brokerage model
Real estate is ready for a change. Houwzer (the sponsor of this article) is one modern real estate company that makes home selling more profitable for sellers. By employing tech-enabled, salaried agents rather than independent contractors the company is able to bring fees back in line with actual costs — allowing sellers to walk away from the sale with more cash.
When working with a traditional agent, a seller will pay 6 percent — that comes out to $36,000 on a $600,000 home. This is a steep price when you consider that the average budget for a retired household is roughly $45,000 per year, according to the Bureau of Labor Statistics.
Instead, Houwzer, for instance, opts to charge a fixed price of $5,000 for their listing services and a 2.5 percent commission, which goes to the buyer’s agent. In the example listed above, sellers would save $16,000. Houwzer isn’t cutting corners to achieve such low costs — they’re simply offering a fair price for services, reimagining the fee structure of traditional brokerages.
Houwzer listing agent Chris Johnson maintains that modern technology has been a game-changer in keeping costs reasonable. “It’s a mobile marketplace today,” he says. Buyers are now searching for homes right from their phone. We’re leveraging this technology and just setting a fair price for what we currently do.”
When downsizing, baby boomers can benefit from a listing service like Houwzer because it’s simply a smart financial decision: Saving thousands in home-selling helps aid retirement goals, leaving more money for vacations, long-term care expenses, home updates, and more.
you get more than you pay for
Of course, baby boomers aren’t just looking for cheap service — there are plenty of limited service, discount brokers for that. What they really want is a better value. This is where an agency like Houwzer really connects with boomers: It offers a full package for much less.
Houwzer doesn’t use a discount listing model. Home sellers work with a full-service listing agent who has in-depth knowledge of the market. The agent is there every step of the way — answering questions, running a comparative market analysis, identifying a competitive listing price and strategy, negotiating offers and terms of the deal, and guiding clients through closing. Every seller also has a listing coordinator, who handles all the details like scheduling, photoshoots, paperwork, and deadlines. They receive everything needed to sell a home, including a lockbox, lawn sign, virtual tour, open houses, and more.
Houwzer’s approach works: Their listings settle for $4,400 more than the industry average, and spend 55 percent fewer days on the market. So far, they’ve saved sellers roughly $18 million in commissions.
Want to see how Houwzer can save you money on your home sale? Click here to learn more about this full-service brokerage.