When and Why our Flat Fee Program was born.
A seller's agent in 2022 prevented buyers from acquiring a house they loved, causing the seller to lose $31,134 in net profits.
The founder of this company has dedicated the past 25 years to serving home buyers selecting the appropriate financing and when the company opened in Texas also assisting with the entire home-buying process, from home search to contract negotiation to closing. Over the years dealing with listing agents, one realized listing agents focus primarily on past personal experiences as opposed to obtaining updated knowledge of mortgage loan investors' guidelines. As a result, when offers included financing (which occurred over 90% of the time), the reasoning from agents advising sellers was based on experiences not necessarily applicable to the current situation. This is why the following experience was the final straw that led to the creation of Flat Fee Home Sellers.
In 2022, a $430,000 offer with VA financing was made, and the seller agent, licensed in Texas for 17 years, expressed concern about the offer not needing a down payment. VA financing allows for the most lenient conditions for home loan approval, designed to benefit our country's heroes. By asking for proof of funds, the concern about a short appraisal value could have been eliminated. Furthermore, upon researching the subdivision, it was found that all homes sold with the same square footage were at or above the asking price, so the increased offer of $432,200 still posed no problems with the appraisal value. This offer was submitted along with 3-4 comparable homes sold at the above price, but the seller agent did not appreciate sharing this information. Additionally, the commission was cut down to 2% in the MLS, which did not help the flow of buyer offers.
Rather than considering the offer and negotiating for the seller, the agent decided instead to ignore emails, text messages, and phone calls. The broker was contacted, but she claimed to not know enough about the market and redirected the inquiry to her manager, who stated that the seller had made the final decision, and no other comments could be made. This real estate company was the third-largest real estate company in the world. Twenty-eight days after the buyer’s offer was rejected, the seller accepted an offer for $27,200 less and still had to spend $6,000 on repairs, resulting in $33,200 less for the seller.
This and other experiences led to the realization that some sellers often lose out by relying on the size of the real estate company representing them. This is why Flat Fee Home Sellers was born, offering the same services as traditional real estate companies but with the potential to save sellers one or even two commissions.