100% Full-Service, 100% of the Time
The new cost of a transaction®
We believe full-service real estate representation is here to stay. It is the reason we’ve built our brokerage around it. Tomorrow’s consumers do not want less representation. What they want is representation that they believe is fair and straightforward.
Next Generation of Real Estate Services: Consumer Choice™
RT Brokerage Services lets consumers choose the model that works best for them. Instead of only paying for real estate services in the form of a percentage based commission (traditional model), we give consumers the option to pay on a fee-for-service (hourly model) basis.
The Model Advantages
The Traditional Model
Our traditional model operates exactly like any other full-service brokerage in the industry. The brokerage and selling office commissions are negotiated at the onset of representation and only payable if there is a closing. Any agent-time invested or expenses incurred as part of an unclosed transaction are simply written off as a loss.
The traditional model works well for consumers who are not entirely committed or confident they can close a sale. The advantage of the traditional model is it lets consumers engage an agent, whether buying or selling, with no out-of-pocket costs or reimbursement of the agent’s time and expense in the event they change their mind. Up until closing, it is a 100% risk-free relationship on the consumer’s behalf. However, after closing the downside is the risk-free relationship converts to a hefty premium: the traditional real estate commission.
The Hourly Model
We have proven our hourly buy- and sell-side real estate services work for consumers who are 99.9% sure they will close a transaction. We have found that committed and knowledgeable consumers realize significant commission savings because they end up using less agent billable time and more transaction processing billable time.
Translated Commission into Hourly Rates
Table 1.1 below translates a traditional 3% (or $12,000) commission earned by a buy-side agent on a $400,000 property into hourly rates. The five hourly scenarios depicted in the table range from a city-level search to simply writing up a purchase and sale agreement with no extra services provided.
Table 1.1: Agent Commission Shown as Hourly Rates
| ← More Search | Less Search → | ||||
| Service/Type Srch | City | Defined | Validation | None | Doc. Prep |
|---|---|---|---|---|---|
| Define Criteria | 5 | 5 | 1 | 0 | 0 |
| MLS Access | 8 | 5 | 2 | 0 | 0 |
| Tours | 20 | 10 | 4 | 0 | 0 |
| Offers/Marketing | 8 | 8 | 8 | 4 | 2 |
| Neg./Inspec | 8 | 8 | 5 | 5 | 2 |
| Escrow/Closing | 7 | 7 | 7 | 7 | 7 |
| Total Hours | 56 | 43 | 27 | 16 | 11 |
| ========================================================================= | |||||
| AVERAGE HOURLY RATES | $214 | $279 | $444 | $750 | $1,091 |
These scenarios are intended as an illustration and do not guarantee these services listed can be completed in those times.
The table clearly demonstrates that when consumers are 99.9% sure they will close a transaction and know what they want, eliminating an agent’s commission risk, by paying hourly, can definitely pay off to their advantage.
Market Adoption Through Operational Efficiency
Achieving operational efficiency in the real estate transaction requires a new way of thinking. At RT Brokerage Services we have set our sights on achieving operational efficiency by:
- Making an agent’s time have real and payable value.
- Moving away from a value-based percentage commission to an hourly rate structure.
- Restructuring to a true professional fee-for-service organization to improve consumer confidence in the value of a real estate transaction.