FAQ

Q.  How do real estate commissions work in Texas?

A.  In almost all residential transactions in Texas, sellers contact an agent to list their property.  Although no regulations mandate existing commissions, the majority of sellers pay a total of 6% in commissions.  At closing, the seller initially pays this 6% to their broker, who in turn shares a portion (most of the time, half of the 6%, or 3%) with the agent who represents the buyer. 

Red Pear Realty believes that this system of paying 3% to each agent no longer makes sense, and are happy to list homes for a FLAT FEE and offer REBATE services for our buyers.  

Q.  I want to buy a home.  Why can't I just represent myself and keep the commission?

A.  Consider the following:

  • Agents are NOT obligated to pay a commission or reduce their commission if the buyer has no representation in a deal.  In most cases (in our estimation, 9 out of 10), per the contract between the seller and the seller's broker, the seller's broker keeps the full 6%, and the buyer just missed out on professional representation.   
  • When an agent agrees to represent a seller, their primary, fiduciary duty is to represent their client's interests above everyone else's.  If you represent yourself, you are fighting an incredible uphill battle against a professional that is not representing your best interests, and you are much more likely to lose out on more than just 3%.  
  • This is why "Pocket Listings" are so valuable to selling agents.  Instead of placing these listings immediately on the MLS and fully advertising them, the selling agent attempts to find a buyer from within their own network so that they can keep the full 6% commission for themselves.  Many sellers and buyers are never the wiser to what is really going on when they buy or sell a Pocket Listing.       

Q.  What is the best way to see a home in person during my search?

A.  You have three really good options: 

  • Go to an open house.
  • Ask the selling agent to show the listing to you.  Most of the time they are happy to do so.  
  • Call a broker and offer to pay them to show you the home.  $150 per home is a very fair amount.  (Please note that if you sign a representation agreement with another agent, Red Pear Realty can not help you until the terms of that agreement are satisfied.)  

Q.  I want to sell my home.  How are your services different from an agent that charges a percentage?

A.  We aim to offer the same great service--just cheaper!  

Q.  Why don't you offer a $99 or $499 option like some Flat Fee brokers do for sales?

A.  Red Pear Realty wants to change the residential realty industry from a commission based model to a fee based model.  We believe that everyone will be a winner with this shift--buyers, sellers, and real estate professionals.  However, with the bare bones listing companies usually comes no professional service, just the promise of inputting your listing data into the MLS.  We do not believe this is in the best interests of our clients and actually hold the opinion that this model does more to hurt the consumer and the reputation of this business model in the long run.  We aren't here to take your money and run.  

Q.  Well then why aren't more people doing this type of thing?

A.  We don't know either!  

Q.  Who should NOT use Red Pear Realty's Rebate or Flat Fee Realty services?

A.  People who don't like saving money!  (But seriously, those looking to buy/sell/lease commercial [including multifamily of more than four units] or farm and ranch properties, as well as mineral and water rights, should seek brokerage services with individuals qualified in those arenas.)  

Q.  You don't offer services for my market.  What's the deal with that?

A.  If your market isn't covered in our current geographic area, let us know!  We are fully licensed to conduct business throughout the great State of Texas, so if you let us know, we can get set up with your local MLS and help you!  Signing up with a new MLS takes about a week to complete.

Q.  If I'm selling, can I offer less than a 3% commission to the buyer's agent?

A.  Absolutely.  The reality in Texas though, is that your home won't get the same attention from buyer's agents that it would if you offered them 3%, and it will either take longer to sell, or may not sell at all.  We highly recommend offering buyer's agents a 3% commission.  

Q.  I've signed a representation agreement with another agent.  Can you do a rebate or flat fee service for me?

A.  Unfortunately, we cannot help you until the terms of your existing representation agreement are fulfilled.

Q.  What's the MLS?

A.  The MLS, or Multiple Listing Service, is a computer database system set up by REALTORS ® to help them market real estate within a certain geographic area.  It also keeps track of historical data for properties that have been listed in the past.  The MLS is an incredibly powerful tool that can be used by REALTORS ® for all kinds of micro and macro information such as pricing, home measurements, commissions offered, market trends, etc.