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Why I Decided to Flat-Fee My Real Estate Brokerage

Posted by will8180 on January 1, 2016
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I’m William McCoy II, Broker and CEO of Urbana RE.21734I am a “Millennial” RE (Real Estate) broker with over 10 years of working experience in the industry. I’m educated in both university studies as well as real-world work experience. Over the years I have seen a lot when it comes to my industry, with some being good, some being great, and some to put it frankly, bad. What do I mean by the “bad?” Well take for instance the housing crisis, circa 2008, during which time people were extremely desperate to sell their homes just to relieve themselves of a burden they had no way of paying for. For many people during this time it was the worst situation to be in. Just imagine having a home you paid too much for to begin with, your mortgage adjusts to almost double of what you were used to paying because of an interest rate hike, and to top it off many of your neighbors have foreclosed on their homes, dropping the housing price well below the price that you could sell your home. There were friends and family at the time coming to me asking me, “What can I could do? I would suggest selling the home, and the answer in most cases was that “I would but I cannot afford to pay the RE agent fees and closing cost involved.” They would explain that they could break even, but fees would cause them to have to bring money to the table in order to pay the RE agents. And that they just didn’t have that type of money. I felt so bad for them and so I went to my broker at the time, inquiring about what could be done to help so many in turmoil. He relayed to me that he was unwilling to let me list the homes for anything under a 5% fee. To break this down for those who may not understand what 5% actually means on a home sale, here’s the math based on the average home in the DC Metro Area with a sales price of $400,000.00:

$400,000.00 Sales Price

2% Listing Broker (Me)= $8,000.00

3% Buyer Broker (Other Guy) = $12,000.00

Total= $20,000.00!!!

And my broker at the time thought that 5% of the sales price was a discount since the average listing fee is about 6% in the DC Metro area. This does not include closing cost fees that can average about 2% (another $8,000.00) of sales price, and may include subsidies (money given to buyers at closing to assist them in the purchase of the home) buyers now expect in order to purchase a home. So with that model a homeowner is this area could expect to pay about $28,000.00 to sale their home. I mean people were literally going into to foreclosure because they could not pay a RE agent to sell their home! This had be both disturbed and baffled. Could we as RE agents be a part of the housing meltdown? I immediately came to the realization that the RE industry needed a change. At that point I decided to open my own RE firm and charge a flat-fee for all our services. What do I mean by a flat-fee? To listing your home with Urbana RE, we charge a flat-fee of $1,499.00, which includes all the services you would receive from companies like ReMAX, Coldwell Banker, or Keller Williams. And it is same for listing rentals or working with buyers to purchase a home. “Why did you decide to take such a drastic cut in the commissions you receive?” “What is the catch?” Are both questions I get asked all the time. My answer is, “because I wanted to prove a point.” Which is that you can serve far more people in a way that is efficient, transparent, and cost saving through technology. Also, that by making the “barrier point of entry” low more people will actually be less averse to looking into real estate for themselves.

Nonetheless, this takes a lot of education since most people truly believe and have been programmed by fear to think that without a real estate agent holding your hand every step of the way, you are bound to fail. I say “programmed” because just take a look at your emails from RE agents you may know or go to sites like  and you will find tons of articles on the “10, 7, 5 reasons you should use RE agent purchase or sell your next home”, with the undertone that if you don’t you may be DOOMED! Don’t get me wrong, I agree that an RE agent is valuable, since we have real-world knowledge and experience of situations that can greatly help a client reduce the learning curve, while saving time, money, and headache. But so do school teachers, and we don’t pay them anywhere near what an RE agent gets paid on the sale of a home. What I don’t believe and what I would like to change is the thinking that by having a certain name attached to their “For Sale” sign a person can actually sell a home quicker or get a get deal on a purchase. Or that the sign with broker’s name will give better service. In reality there are a few things that causes a home to sell quickly and most it has nothing to do with the name of the RE agent or Broker generally. But has everything to do with what the RE agent does to get your home out on the market and priced correctly. And I believe that you can train both a client and RE agent to produce this winning formula time after time with the right guidelines and platform. The rest purely comes down to the “MARKET.” And when I say “MARKET”, that means politics, economics, social issues, and even the season. See residential real estate is a very personal thing to most people, and there can be a lot of emotions involved. I don’t believe this will ever change. But what can change is the way people approach a real estate transaction. With the correct education, I want to help not only my clients, but other RE agents, and the industry as a whole. So without further ado, here are some truths about the RE industry.



Marketing is still important when trying to sell or rent a home. However, with the invention of the internet, but more importantly Mega Data Exchanges like Zillow, Trulia,, and Hotpads, every consumer now has the ability to see the same listings that RE (RE) agents advertise on the Multiple Listing Service (MLS). However, there is a belief that RE agents have some magical formula for advertising your home. The truth is that there is a basic formula that goes into listing your home. Although RE agents have their own little nuisances here and there according the area, the following applies in most cases for advertising any property:

  1. Pictures– Have good pictures! If you are going to spend some money, spend the money on pictures and/or professional photography. We now live a very visual society that effected both the mature and young mind, ie. SnapChat, Facebook, and Tinder. Some clients don’t appreciate the importance of this until I show them two listings; one with good pictures and the other without. Then all of a sudden they understand when I ask them “which one would you like to see first?” It may also be good to have a video walk-through of the home. This is inexpensive to do and easy produce with the camera on your smartphone. You can then load this video to a server like YouTube with tag words such “affordable”, “home”, “Shirlington,VA”, along with detailed description, and the even address. That way when someone is searching for a home in a particular area, GOOGLE (which owns YouTube) will pull your listing up, usually on the first page.
  2. Description– Let’s be honest, unless I live in the client’s house I will not know all the details and work that went into making that house a home in the client’s mind. So, who better to write a description than the client. I typically ask my clients to write a description based on the things that attracted them to the home and the upgrades they have made. Why? Because likely the type of person that will purchase their home, will be who they were at the time of purchase back then. And with a little education regarding Fair Housing guidelines, I can turn almost any client into an experienced description maker.
  3. Staging– Simply put, declutter, keep it clean, and take down and/or secure your personal effects. That’s essentially what staging comes down to. You want your home to look and feel as anonymous as possible while allowing prospective buyers the ability to see how their items would fit in the provided space.
  4. Collateral– It is good to have something the prospective buyer can take with them that may be memorable. It can be as simple as a print out with description and particular features about your home. Plus, this can easily be made with computer programs such as Microsoft WORD.
  5. Showings– It is a numbers game. You must allow for a schedule where your home is available as often as possible to as many potential buyers as possible. Here’s an example of a good showing schedule: 10am-7pm Monday-Saturday and 12-5pm Sunday. This type of schedule + or – allows for a great amount of prospects to see your home. However, limited times such as 12pm-5pm Monday-Friday, no weekends, or showings only when you or the listing RE agent is present, does not work well for getting many people in to see your beautiful home.
  6. Open House-Go online and there are RE agents for holding an open house and RE agents against them. However, from a Millennial standpoint I can say in my experience that open houses are great for getting new clients, but they are not great for actually selling your home. Out of all my open houses and listings over the past 10 years, only one produced an offer. Usually at open houses you will get neighbors, competing RE agents, and what I like to call “open house window shoppers.” These are people who literally go to open houses as something to do on the weekend mainly for the free food, social aspect, and pure curiosity. It is similar to window shopping. My suggestion to any client is to attend an open house and make your own determination on the benefits of it. In my mind, there is not much benefit to the seller and more for the RE agent who holds it.

The point of the matter is that if your property is on the top websites particularly the Multiple Listing System (MLS), with great pictures, and description, people will want to see your home. The reason I say the MLS and not just sites like Zillow or Postlets (also owned by Zillow), is because although Zillow will eventually be as big as the MLS, most other websites like,, and pull roughly 95% of their data from the MLS. In fact, Zillow pulls most of their listing information straight from the local MLS and pass them on to the consumer in a way that is appealing and easier to understand. Additionally, what is more important than anything else is the pricing. Especially with algorithms like “Zestimates” by Zillow that can essentially give anyone a comparable market analysis (CMA) the same way a RE agent would. This means that if your property is priced way out of range in comparison to similar homes in the neighborhood, you will see this reflected in both the amount of showings that will occur as well as if any offers are placed on it. Pricing in my experience can be one of the biggest deterrents in selling any home. However, if pricing is in line with your market area, then it is just a matter of making sure that as many people as possible get in to see it before an offer rolls in.



I’m going to make this short and sweet. Most RE brokers and RE agents use the same exact local association provided contracts, forms, and other addendums. Why? Because simply put when the state makes changes to laws the real estate association are the first to receive and enact those changes to the contracts. Which means that by using the local real estate associations’ contracts the RE Broker reduces the liability to themselves and their RE agents. If we all use the same contracts what are you really paying for?



This is the piece where agents make most of their money and spend a good portion of their time. Negotiations begin when a buyer and seller or renter and landlord (less likely) have a difference of opinions on price. This then causes two agents to speak on behalf of their represented parties. But how stringent is negotiations these days. It can be pretty quick! Here’s an example of a typical exchange between a RE agent representing a seller and me representing a buyer.

Phone call to RE agent at 4pm Monday

Will (Me): We saw the home you have listed at 123 Main St, and my client would like to make an offer.

Agent: What are they thinking?

Will: They are thinking somewhere around X based on the condition of the home and how long it has been on the market.

Agent: That offer is below the listed sales price. I don’t know if my client will accept it, seeing that they already dropped the price X amount just a few days ago.

Will: I understand, but there was another down the street that sold for our offering price. Plus we’re going into the winter months where no one moves. Do they really want to sit on the house through the winter?

Agent: The property you are referring to is a bit smaller than my clients and has less yard space.

Will: Totally understood. I will be sending over my clients offer today. What email address should I use to send it?

Agent: Please use

Will: Thank you. We look forward to hearing from you all as soon as possible.

9am Tuesday morning the Agent calls me on my cell phone.

Agent: My client has accepted your offer with the following contingency.

Will: Sounds good. Send over the changes for us to review and initial off on.

My clients agrees to the terms and we have a ratified contract in less than 24 hours.


You would imagine that there should be a lot more back and forth and fighting for every penny and contingency. The truth of the matter is that both parties know in their head what they are willing to accept, bottom line. Notice how I circumvented the Agent’s own speculation by stating “I will be sending the offer over today.” I did this because many times agents get in the way of a deal getting done due to their own pride, nervousness, or whatever other issue. However, by sending the offer over you at least get some dialogue started. Can two parties, such as a buyer and seller do this on their own? Absolutely, but it is sometimes easier to do it through a channel. This in some cases causes people to make offers and require things they would not normally if they had to deal with the person face to face or through direct communication. In fact, when I have had really persistent clients who make offers that may seem unreasonable, I will ask them to send the request via email to me. At the same time I let them know I will be sending their terms directly to the agent and that they will be copied. It is amazing how often that changes the person’s mind as to what they may be requesting. And if that doesn’t work the response from the agent regarding their clients’ decision is more than enough to help in educating my client on making a reasonable offer from then on.

I personally believe that you can educate any individual to negotiate on their own behalf in the transaction, either by having them send the offerings over directly or by trial and error. And if given a platform to do so, they can accomplish this with minimum interference and maximum advisement from the RE agent.



This is another situation where a RE agent (RE agent) will earn their money. Why? Because when inspections happen like a home inspection for instance, it can be a little alarming for both buyer and seller. The buyer thinks the home is amazing and if they are first time home buyer, it can be surprising to know that a home that looks so well-manicured may have latent issues. From the seller’s perspective, it may also come as a surprise that there are things wrong with their home that they may not be aware of, or if they are aware, didn’t feel it was a big deal while they were living there. So how is this resolved normally? Again, through some negotiating between the buyer and seller. Outside of the buyer walking away from the home purchase or the seller refusing to make repairs that are mandatory for the buyer, there is always room for negotiation. Buyers will need some education before the home inspections on the fact that there may be repair items here and there that they will have to decide if it is important enough to have fixed, or if they are willing to take on the burden of repairs once they purchase the home. Seller will also need to be educated on the fact that home inspections will in most cases bring up issues with the home they may not be aware of or may have forgotten. And that these repairs may need to be completed in order to sell the home. Again, let me say that this is not a huge factor as long as both parties have expressed an interest in completing the transaction. With that out of the way, all we need is solutions.

So what are the choices for a seller and buyer when it comes to items noted on a home inspection? It is really simple. It comes down to accept, counter, or decline. Take a look at the following real world example of an item noted on the home inspection.


12B. Roof has excessive shingles dues to re-shingling over existing shingles, instead of removal of old shingles and replacement with new ones. (Basically instead of removing the old shingles on the roof the previous owner/contractor re-shingled over the existing shingles. This was mostly dues without the former owner’s knowledge. Or could have been done to save cost to the previous homeowner.)

SUGGESTION: Removal of old shingles and re-shingle with new only.

The Seller could have

Accepted: The seller could have agreed to remove the shinglesand re-shingle with the new ones at an estimated cost of $3,000.00.

Countered: The seller could have agreed to offer a credit at closing to the buyer for this repair. This causes a deduction from the seller proceeds in the amount of $3,000.

Declined: The seller could have declined to make the repair, in which case the buyer has to decide what they will do regarding moving forward with the transaction. Note: If the buyer decides that she/he does not want to purchase the home at this point, he may do so pending the sales contract is contingent on a home inspection.

In this real-life situation my client decided to accept the credit in lieu of the repair since it was not necessarily harmful in his mind to the structural integrity of the home. He received this credit at the closing table since it was allowed by his mortgage holder Wells Fargo.

In any situation regarding the home inspections, appraisal, or even the final walk-through it comes down to essentially three choices; ACCEPT, COUNTER, or DECLINE. That is really the only choices either party has in the transaction. If you can get both parties to understand that it is that simple then the entire process is a lot easier to navigate. This can again be completed over a platform where a buyer and seller are allowed to interact while having their RE agent advise them accordingly. This in turn moves the deal flow along in a progressive real-time manner, instead of having negotiations bottlenecked because of RE agents having to relay information to each other, who then relay it to the client they represent.



A closing is simply a review of what both parties have agreed to in the transaction, transfer of consideration (money), and exchange of keys. People feel as if the agent they worked with will be able to assist them if something goes wrong at this point, but that is not the case. The only person that can really do anything at the closing is a settlement attorney and/or closing agent, the buyer and the seller. (NOTE: The required role whether attorney or licensed settlement agent varies state by state.) In any case, these people, we will just refer to them as “settlement agents” on average complete about 20-30 closing per week. They have seen it all and have more experience negotiating a closing than 95% of all RE agents. So what is the RE agent there to do? Usually to hand over the keys to the buyer and I guess “peace of mind.” However, if you know going into it that the settlement agent/attorney has the most experience, then peace of mindshould be in them and not the RE agent, right? If buyer and seller were educated on this beforehand, you could again have a situation where the two can complete a transaction on a platform without the interference of an agent. I have literally been at a closing with a RE agent who is trying so desperately to prove his worth that he makes a big deal about a relatively small issue to his client and causes the remainder of the settlement to be tense situation. Of what benefit is that to either party in an already sensitive situation? Let’s keep it real, most agents attend closing to ensure their commission is sent and for peace of mind to their client. That’s really it.



As you can see I have walked you through a home purchase transaction and broken down many of the myths and stigmas people have toward real estate in general. I could not in an article cover every point and situation, but I think I did a pretty good job of nailing down the main points in a real estate transaction. However, if you have further questions I invite you to visit my website and subscribe to my blog where I post different situations. Also feel free to send me your situation and I would be more than happy to offer you advice on how I would handle it.

Real estate is changing from the old to the new. Technology can make real estate easier to navigate. Very soon there will be a program that comes to market that can do this for a buyer and seller or landlord and renter with minimum interference/bottlenecking from the RE agent, maximum transparency for each party, maximum autonomy, and save you a crap ton of money in the process. Imagine, selling or renting out your home at fraction of the cost of the traditional way, but with a bird’s eye view of the transaction where you control everything while getting the high-level advisement from your experienced RE agent. This is the future of real estate! And I invite your questions as well as comments on what changes you would like to see is a system like this.

Thanks for taking the time to read my vision and look forward to hearing from you soon.