[photopress:j0409344.jpg,thumb,alignright]Since Ardell mentioned the rebates her clients enjoyed, it got me thinking about our small business and how we stack up. During 2006, our purchase and sale clients saved over $60,000 in escrow fees alone compared to our competitors, more if you add up all the other industry inventions consumers are charged for. That figure does not even include the refinance business our office closed.
Put this in perspective:
Let’s say the median sales price in the Seattle area for a single family house is about $450,000 and the fee a seller pays to agents is $27,000, or 6% of the sales price. In contrast, the escrow fee each party (buyer,seller) pays at our office is about .0011111 or 1/10th of one percent of that same sales price. This illustration is not to say agents are overpaid.
Evidently, escrow fees are negotiable. Over the last few weeks our office has received a few calls from people asking if we will match certain title companies who are dropping their escrow fees—ironically, to levels that our clients have enjoyed and where we’ve been residing for the last three years running.
It pays for consumers to shop.
Ardell’s going to kick your butt for calling it a “rebate.” 🙂
And I can REACH him…he’s in a whole lot more trouble than you Norm. LOL
What? I’m busted? Either way, I’d call Ardell incredibly generous, but her clients know that.
I am actually quite surprised by the way my “thread” has played out. I had no intention of being “St. Ardell” as someone referred to me. Quite the contrary.
I wanted to create a road map, so others could apply some things that I learned, by using “bottom feeder” dollars within the transactions. Everyone is kind of taking it in a completely different direction.
My message is “if you are willing to pay 25% in referral fees and bottom feeder fees, than be EQUALLY willing to spend those SAME dollars you already are willing to spend, on YOUR CLIENT”. No one seems to be getting that part.
The lessons I learned being applied by others, was the purpose of the experiment. When and where is an end run “settle up” appropriate, and when and where is an up front negotiation more useful, and when and where do you put the money into the real estate itself, for the betterment of “property” generally.
There were three or four or more completely different methods of dispersing funds. I thought the thread would go in the direction of example, but it didn’t.
You know EVERY agent does some of what I did ALWAYS. This is NOT about me at all. This is “the business”. Newer agents don’t understand that ALL agents have done this at one time or another and often. It’s the new guys who got into it just for the money that don’t realizse that this stuff IS the behind the scenes real estate world. And has been for quite some time until recently.
The fees ARE set high most times to allow for moneys to be thrown back into the transaction where needed. Unfortunately there is no class for teaching when and where an agent needs to be doing that. But believe me guys, I am clearly not the only agent in this country who does this every day. It really is “part of the business”.
Tim,
Sorry for using your article to make my point. Mine is getting to long and it might get lost there 🙂
It can also cost a consumer to shop when they’re trying to obtain rate quotes from mortgage lenders. I’ve watched borrowers lose interest rates by spending days trying to obtain the lowest ones from calling lender after lender.