World We Imagine Part 3

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Affordable Agents

In Southern California, we have seen the price of housing surge more and more each and every day. As of February 2022, the median price of a house in Los Angeles was $945,000 (DePietro). This number is top 7 in the whole country (Burrows). Furthermore, around 14% of employed individuals in Los Angeles make less than $30,000 a year (ZipRecruiter). This makes it almost impossible for families to purchase a home that's within their budget. With that being said, there need to be more ways to make housing more affordable in Los Angeles. This isn’t an easy task, however, this is where Affordable Agents comes in. Affordable Agents’ mission is to allow individuals to purchase their ideal home at a lower cost and save money when they sell their home. 

Affordable Agents is an organization that seeks to make housing more affordable for low-income households in the Los Angeles area by providing them with real estate agents that work on a 1.1% commission. Normally, you see real estate brokers take a 2.5% commission whenever they assist in buying or selling a home, however, Affordable Agents’ competitive edge is that they supply this act at over a 50% reduced cost. When a real estate transaction goes through, it is the seller who pays the commission to the real estate agents of both the buyer and the seller. So, if an Affordable Agents agent is representing the seller, it will save them 1.4% of the sale price of their home, which can add up to be a lot. Furthermore, when a family is working with Affordable Agents to buy a new home, they can use the 1.1% commission as leverage to get the house they want at a reduced price. 

Since agents will be working at a reduced price, Affordable Agents would look to employ new, young real estate agents. The benefit of working with Affordable Agents is that the organization would be the one to bring clients to them, and they can get their foot in the door of the industry. However, since agents can make more money at another agency, we would expect that there would be a high turnover rate, so Affordable Agents would look to keep hiring more and more agents. Also, part of helping people buy and sell homes requires costs such as marketing and having the latest industry software. This is why Affordable Agents adds an extra 0.1% to the 1.1% commission that would go to the organization to help cover some of their costs. Lastly, Affordable Agents would raise even more money by having fundraisers and working with donors who wish to combat the issue of affordable housing in Los Angeles.

I am passionate about the work that Affordable Agents would do as I know how pressing the problem of affordable housing is in Los Angeles. Living in Los Angeles my whole life, I would always hear the talk about how the houses in the area are unaffordable. So, when I was in high school, I volunteered for an organization called Habitat for Humanity. Habitat for Humanity is a nonprofit organization that builds affordable housing for underprivileged households in the greater Los Angeles area. I worked with fellow volunteers as well as the future homeowners of the houses we were building. They would tell their story about how difficult it was for them as everything was out of their budget and how blessed they were to have the opportunity to be gifted a house by Habitat for Humanity. My heart really felt for them and it motivated me to volunteer for the organization even more. As someone who is studying real estate development at the Price school at USC and wants to be involved in the real estate industry in the future, Habitat for Humanity really spoke to me and inspired me to come up with Affordable Agents to further allow low-income households to find affordable housing.

Anima Mundi Development Partners should support Affordable Agents as everyone deserves to have a roof over their head and this organization tries its best to ensure this. Affordable Agents also gives the opportunity for young agents to start their careers as real estate agents and puts them in a great position to succeed. Furthermore, Affordable Agents does have revenue streams that help it turn a profit. This can be seen in the 10% cut they get off of their agent’s commission and the fundraising and donating that will occur. Overall, Anima Mundi Development Partners should take the opportunity to invest in Affordable Agents.








Sources

Burrows, D. “15 U.S. cities with the highest average home prices.” Kiplinger. (2021, October 

20). 

https://www.kiplinger.com/real-estate/603612/15-us-cities-with-the-highest-average-home-prices

DePietro, A. “California Housing Market Report 2022.” Forbes. (2022, April 14). 

https://www.forbes.com/sites/andrewdepietro/2022/03/30/california-housing-market-repo

rt-2022/?sh=6c16bcaf2c4a

ZipRecruiter. “Lower Class Salary in Los Angeles, CA.” ZipRecruiter. (2022, April 19). 

https://www.ziprecruiter.com/Salaries/Lower-Class-Salary-in-Los-Angeles,CA

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