Grant Clayton’s Take: How Outdated Commissions Are Crushing First-Time Home Buyer Dreams
The aspiration of owning a home is a cornerstone of how discount brokers empower first-time buyers. This is especially true for first-time buyers navigating a complex and often intimidating market.
Despite significant technological advancements that have streamlined the real estate process, a persistent, often unseen barrier continues to make this dream harder to grasp.
That barrier is traditional real estate commissions.
This article, guided by industry thought leader Grant Clayton, will expose how outdated, static commission structures disproportionately hinder first-time home buyers.
These structures limit seller flexibility and inflate market entry costs.
We will explore how the 1 Percent Lists model offers a vital solution, empowering sellers to make homeownership more attainable.
Grant Clayton has long been a loud voice in the industry, always ready to debate his business model and challenge the status quo.
The Hidden Cost: How Traditional Commissions Affect First-Time Buyers
Let’s talk about the elephant in the room: the standard commission structure.
The prevalent model often involves a 5-6% total commission on a home’s sales price. This fee is typically split between the listing agent and the buyer’s agent.
Crucially, the seller usually pays this entire commission out of their home’s equity.
This arrangement puts sellers in a tough spot, creating a significant dilemma.
These substantial commissions reduce a seller’s net profit, forcing them to either price their home higher or absorb considerable costs themselves.
This directly impacts their pricing strategy and flexibility.
Sellers are naturally less likely to price aggressively or offer buyer incentives when a large chunk of their potential earnings goes directly to commissions.
Ultimately, this creates an indirect burden on first-time home buyers.
Homes are priced to absorb these commission costs, leading to higher initial price tags.
For a first-time home buyer, every dollar counts, and these inflated prices mean a larger down payment and a bigger mortgage.
Furthermore, sellers have less financial flexibility to accept lower offers or negotiate on closing costs.
This is a crucial aspect for budget-constrained first-time buyers who often rely on such negotiations to make a deal work.
There is also less likelihood of sellers contributing to closing costs, repairs, or offering other financial incentives.
These contributions could significantly ease the entry burden for new homeowners struggling to gather every penny.
Grant Clayton’s perspective is clear: “These aren’t ‘free’ costs; they’re baked into the price, and ultimately, it’s the buyer who pays more.”
This hidden cost impacts affordability across the board.
Technology’s Promise vs. Industry’s Stagnation: A Grant Clayton Challenge
The real estate industry has undergone a digital revolution.
Think about the technological advancements we’ve seen: sophisticated online listing platforms like the MLS, Zillow, and Redfin are now standard.
Virtual tours and immersive 3D walkthroughs allow buyers to preview homes from anywhere.
Digital document signing and streamlined transaction management systems have replaced mountains of paperwork.
Even CRM systems and AI-powered marketing tools have made agents far more efficient in their operations.
These technologies have dramatically reduced the time, effort, and manual processes traditionally associated with selling a home.
Agents are more efficient than ever, capable of managing more listings with less overhead.
So, here’s the unanswered question, and it’s Grant Clayton’s core argument:
If technology has brought such immense efficiencies and cost savings to real estate, why have traditional commission rates remained stubbornly high for decades?
Why haven’t these savings been passed down to the home seller, and by extension, helped alleviate the real estate commission barrier for buyers?
We’ve seen this play out in other industries.
Consider travel agencies, where online booking platforms completely disrupted the old model and drastically reduced costs for consumers.
The stock brokerage industry saw commissions plummet as online trading platforms emerged, creating more accessible services for everyone.
Yet, the real estate sector has largely resisted this trend when it comes to standard agent commissions.
The promise of real estate commission efficiency has been realized in operational terms, but not in consumer savings.
This stagnation directly contributes to the challenges faced by those trying to enter the market.
The First-Time Home Buyer’s Obstacle Course
Today’s first-time home buyers face a mounting set of challenges.
The down payment remains the largest hurdle, often exacerbated by inflated home prices.
Rising interest rates mean higher monthly mortgage payments, further straining budgets.
Then there’s the closing cost shock—unexpected fees that can derail a deal even after the offer is accepted.
Many markets are intensely competitive, marked by bidding wars and limited inventory.
This forces buyers to make quick decisions and often offer above asking price.
Adding to these home buyer down payment is a general lack of savings.
Many first-timers have limited emergency funds or savings beyond what’s earmarked for their down payment and initial costs.
Traditional commissions only worsen this plight.
Higher listing prices, driven by the need to cover significant commission costs, mean larger down payments are required.
This creates an even higher entry barrier.
With a large chunk of their profit going to commissions, sellers are less inclined to help with closing costs.
This pushes more of the financial burden onto already stretched buyers.
The cumulative effect is reduced affordability, making the overall home search more frustrating and often exclusionary for new buyers seeking affordable homeownership.
1 Percent Lists: Reshaping the Landscape for Sellers and Buyers
This is where 1 Percent Lists steps in with a truly disruptive model.
Our core promise is simple and direct:
