Black Friday and CyberMonday have come and gone, but a blog post before Thanksgiving asking why there isn’t a real estate equivalent got us thinking and analyzing data. Then when President Obama launched the #My2k campaign to raise awareness about the potential impact of the fiscal cliff on the middle class, our moment of inspiration came:
Why not create a #My$200K campaign to call attention to the Mansion Cliff approaching in luxury real estate?
Why $200K? The Real Estate Cafe’s analysis of MLS sales during the last 40 days of some past years — the traditional “Let’s make a Deal” season in real estate — reveals that 1% of sales across Massachusetts closed for approximately $200,000 or more off their last list price!
So as #My2K tweets stream across the internet, isn’t it fair to offer something to those upper income households – the 1% — who will most likely be paying higher taxes next year?
How about $200K? Not $200K off their taxes, but $200K off the asking prices of a luxury home? In July, 2012, CNBC warned that the luxury housing market was headed towards a “Mansion Cliff,” and there are early signs that some luxury homes in Greater Boston have already gone over the cliff.
We’ll save details of our research for clients, but here’s the deal:
To encourage luxury home buyers to make offers before the end of the year, the capital gains deadline some sellers are trying to meet, The Real Estate Cafe will suspend our normal Menu of Fees & Rebates and base our compensation on how much money we save clients.
Introducing Fee-for-Performance: Basing our compensation on YOUR savings!
Our initial thought was establish a flat fee: If we saved a buyer $200,00 we’d get $40K. But savings that large won’t be possible often, so we’ll simply set our fee at 20% of the savings off the list price. Like a typical MLS transaction, we’ll get paid out of the buyer agency fee ALREADY built into the sales price. If there is any commission left over, we’ll rebate it to you; and GUARANTEE that you’ll never get pay more than the commission built into the sales price — with one exception!
Our experience is that it is actually possible to save more than $400K this time of year, and we’re eager to do it again.
If we go over that figure, we’ll ask for 20% of the savings to be paid whether the buyer agency fee covers our performance bonus or not. So, for example, if we help you save $400K, we’d collect an $80K cobroke check at the closing table; and you’d STILL save $400,000 off the last asking price. However, if the buyer agency fee built into the sales price does not cover our entire bonus — for example, a 2.5% commission on a $3M sale is $75.000, not $80K — then you’d pay the difference, a $5K performance bonus check, at closing, too.
How does that compare to your end of year bonus? A small price to pay is my guess; particularly if we help you save twice your #My$200K (or more) off the luxury home of your dreams!