Blog with MAE Capital

Real Estate has been an honorable profession for over 120 years and has been evolving since the first house was sold.  Agents that assist in this process today are trained to deal with both home buyers and home sellers and all the laws and disclosure rules that accompany this.   As you can imagine, over the years, the profession has become increasingly more complex due to the implementation of laws and rules.    When I started in the business in 1985, the purchase contract was only one page, and now the purchase contract is 17 pages.  The reason it has grown to such a large document is all of the laws associated with selling real estate, not to mention how litigious the real estate profession has become.  Which is why Real Estate Agents have become a necessity to many people wanting to buy or sell real estate.  In 1985, when I started, a Real Estate Agent who wanted to show houses to his or her clients needed to have a “Listing Book,” a book that was published every month that had all the information on houses for sale. Today, we use the Multiple Listing Service (the MLS).  Real Estate back in the day was word of mouth between Agents until the book was published monthly.

The old way that real estate agents had to work required a lot of time and energy, and the commissions that were charged to do this work were typically at roughly 6%.  When I say 6%, that was meant to be paid by the seller to sell the house, and was normally split between the Listing Broker and the Broker representing the buyer’s broker.  The work that was required before the internet was tremendous for agents to get the word out that a house was for sale, and the commission reflected this.  The internet has changed the way the real estate business is done and has made it a whole lot easier.  We also have to remember that sales prices have escalated as well over the years.   In 1985, the average sales price of a home in California was only $84,300, so with a 6% fee, it would cost a seller $5,058 to sell a house.  That same house today would be worth about $750,000, depending on where the house is located.  It would cost a seller today $45,000 to sell the same house with less work.

If this seems crazy, then you are right.  Although the liability to sell a house has risen, it has not risen as fast as fees have; the cost to sell your home should not be a prohibitive factor when contemplating the sale.  Most Agents in today’s world have the perfect script for potential sellers when they want to list their house to sale.  They will tell you that they are marketing geniuses, or they will say they have connections with potential home buyers, or they will tell you that they can get a higher price for your home than the next Realtor.  All of this is the sales schtick of a Realtor.  The reality is that all they need to do to market your home is put it in the Multiple Listing Service (MLS), and all the other services feed off the MLS.  An example would be that when I list your house and put it in the MLS, Zillow, and all the other Real Estate search sites, including MAE Capital’s website, pull all the data from the MLS.  So, when your Realtor tells you they are marketing experts, know that this is all they are really doing to market your listing.  

The computer has changed everything over the years in the Real Estate game.  For this reason, I can’t see the reason for charging my clients a 4-6% commission to sell their home.  In addition, the rules have changed for Agents who represent potential home buyers.   If a home buyer wants to work with an Agent to show them homes, they now have to sign an agreement with the Realtor that if the seller does not pay their Broker, then they (the home buyer) must pay the commission.  You will see when you talk with an agent that you want to show you homes that they will have you sign a Buyer Broker Compensation Agreement, which is a contract that states if the seller will not pay the buyer’s agent, then the buyer must pay that agent out of his or her own pocket.  This is new as of the first of the year 2025.   The Agent’s schtick on this form will go something like this:  I will get the seller to me you won’t have to worry.   Although this is mostly true, a buyer will end up paying for the Agent’s fees in the sales price of that home as the seller will have to raise the price to get your agent paid in most cases.  This is a new situation in Real Estate that Realtors are having to deal with, explaining to their clients how this works, and in most cases, it is very uncomfortable to talk about as they have not had to in the past.

I have not even talked about the coming of AI in the Real Estate game that stands to change everything.  This will change how real estate is marketed and how potential home buyers search for property.  In the not-so-distant future, the contracts, marketing, regulation, and many other aspects of the real estate process will be automated in a way that there will be little need for human interaction.  Until then, we still need to input the listing into the computer so it can be uploaded into the MLS and we need a buyer’s agent to show the property and let customers look at the property.  This is why I have instituted an advanced way of selling real estate on behalf of my clients.   First, I will list your house for only 1%, and then when you want to buy your next home or your first home, I will only charge 1% on the Buyer Broker Compensation Agreement.  I will also be able to take the savings I negotiate on your behalf and apply it to your new home loan, which I will arrange for you as well.  

This is a simple process, and when you understand the philosophy behind the process, the light bulb will go off, and you will wonder how other Agents can charge so much for the same service.  I have made it simple for you, as I have a clear understanding of how this process works after doing it for 40 years now.  I will do exactly what all the other Agents do to market and sell your house, but with more knowledge and experience to protect you.  I will bundle your services to save you even more money.   Before I even list your house to sell, I will get you a mortgage approved for your next home.  Then I will list your house for 1%  and explain to you that we can negotiate how much you (the seller) will have to pay the buyer’s broker.  We will adjust the sales price to reflect the highest amount back to you for your next home.  Then, when we are looking for your next home, I will only negotiate 1% for myself, and if the seller has already agreed to pay 2-3% for my side fees I will give you the difference to buy down your interest rate on your new mortgage or lower the cost or both.  This works even if I only represent you as a first-time buyer, and I do your home loan.  This is the way efficient Real Estate is going to be in the future.  By being able to arrange your home loan and find your house for you, I know intimately what your situation is and can negotiate appropriately.  You will only have to call me versus, under the traditional real estate way, you would have to call your Agent and Your Loan Officer.  You will get 40 years of mortgage experience and real estate experience.  This will benefit you as I have rehabilitated many homes and understand how to inspect homes for potential problems now and into the future.  I know how to negotiate and will get you the best deal that can be negotiated.  This is the new way real estate will be done until AI changes things yet again.  I am here for you, so take advantage of a guy who has trained underwriters in the past and has mentored and trained many top-producing Loan Officers and Real Estate Agents.  Work with the best so you don’t have to deal with the rest.  Call Gregg Mower @ 916-849-7170