Farewell to the 6% Commission looks like a helpful book for new real estate buyers and sellers. Can you tell us a little about what the reader can expect?
I don’t see the book aimed at new buyers and sellers but instead everyone. Most homeowners don’t fully understand there’s the likelihood 2 agents will be involved with the sale of their property. The one they hire which is the listing agent and the one who represents the buyers. I believe the buyers agents deserve more than 50% of the commission. I say this because just about any agent knows how to post a new listing on the MLS which then gets electronically shared with 700 consumer-facing real estate websites like Zillow, Trulia, Redfin, etc. But, there’s only 1 agent who delivers the buyer and therefore should be properly compensated.
The Zillow’s, Trulia’s, Redfin’s etc. have been educating homeowners and potential buyers of homes and condos for 20 years. Because of this the knowledge gap between consumers and real estate agents has been leveled. What consumers don’t know is how to keep a transaction on a track that leads to a successful closing. Real estate agents who represent sellers nowadays are far less mission critical than they were in the past. My goal was and is to enlighten consumers so they know commissions can be easily negotiated and that they would be wasting a lot of their precious hard-earned equity if they choose to over-pay.
Can you tell us a little about your background and what you do?
My background is in Internet technologies. I started two venture capital backed technology companies. The first one was Desktop Video Conferencing for PC’s over the Internet. I started and sold the company long before Skype and others entered the market. The second startup company was based on advanced speech recognition technology like Apple’s Siri, Amazon’s Alexa, etc. I raised several million dollars from strategic partners and venture capital firms. I hired 4 PhD’s in Computer Science and Artificial Intelligence for the engineering department and a Harvard MBA for the sales and marketing department. While we had what many told us was the Dream Team of executive management the company failed when Apple introduced the iPhone. As you probably know speech recognition technologies have many issues to deal with such as ambient background noise if a person is in a car, bus, airplane, TV or Radio playing, etc. With an iPhone consumers could easily type their questions and not have to rely on voice recognition technologies.
I diversified my investment portfolio company to include residential real estate in 2004. I obtained a real estate license then for the purpose of lowering my transaction costs. At the time I never imagined being a real estate agent who helps buyers and sellers achieve their goals but that’s what ultimately happened.
What inspired you when writing Farewell to the 6% Commission?
The inspiration came from the overwhelming lack of knowledge consumers have about real estate commissions. 99% of people including real estate agents use words like 5% or 6% commission for reasons homeowners don’t fully understand. In many cases the average homeowner selling a home or condo agrees to pay a 5% or 6% commission is actually paying 25-40% of their hard-earned equity. So, if an agent were to say our fee to sell your house will cost you 25-40% of your total equity wouldn’t it sound better if they say 5% or 6%. I see myself as more of a change agent trying to educate sellers so they can keep more of their hard-earned equity.
When writing Farewell to the 6% Commission did anything stand out as particularly challenging?
No, not really. We live in a day and age of transparency. It’s important for homeowners and buyers of property to fully understand everything. Because of my background I’m fine tuned to understand business models in order to determine if they’re defendable against competition, etc. The 5% or even 6% commission can no longer be defended. This is because discount brokerage companies and agents nowadays offer the same full service to their clients so why would anyone want to overpay?
What do you like to do when not writing?
I like helping homeowners to sell their homes at top dollar that includes a discounted commission, full service and without any drama. I also like to help buyers achieve their dream of owning a condo or house knowing they paid a provenly fair price and still receive a generous cash rebate equal to 33% of the what the seller paid me to deliver a qualified buyer that closes on the transaction.
Where can readers find out more about your work?
They can go my website www.TheGeddesGroup.com or see my profile on Zillow https://www.zillow.com/profile/The-Geddes-Group/
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