Using a Discount Real Estate Broker
Traditionally, homeowners have used standard real estate brokers to sell their homes. These brokers take a commission fee of, on average, 6%. And when combined with all the other costs that come with selling a home, listing and selling a house can end up costing upwards of $15,000 or much more.
It’s no wonder, then, that a large number of discount real estate brokers have sprung up in recent years. These brokers offer significantly lower fees or commission rates in exchange for providing more basic services.
There are pros and cons to both discount and traditional real estate brokers, but any homeowner preparing to sell should thoroughly investigate the advantages of hiring a discount broker.
Read on to discover what the three main advantages of discount real estate brokers are.
What is a Discount Real Estate Broker?
Many people don’t understand how real estate commissions work. Although the name might scare you, just because a real estate broker is “discount” doesn’t mean that they provide low-quality services. All the “discount” signifier really means is that the broker charges less.
There are both flat-fee and commission discount real estate brokers. As you might guess, flat-fee brokers charge a set fee to list a home. In some cases, listing the home is all that these brokers do. In other cases, flat-fee brokers might offer a full-service experience — it all depends on the broker.
On the other hand, commission discount real estate brokers simply charge a lower percentage-based commission than the standard 6%. Some brokers charge as little as 1% commission.
The services that a discount broker offers vary between brokerages. At a minimum, the broker will list your house on the MLS, but most brokers also provide other basic services like online marketing and doing open houses.
What are the Advantages of Using a Discount Real Estate Broker?
Of course, the top advantage of working with discount real estate brokers is saving money. Whether the broker charges a smaller flat fee or a lower commission percentage rate, you can significantly reduce the cost of selling a home by utilizing discount broker services. After all, the cost of hiring a realtor is the largest single cost there is when selling a property.
For example, a home sold for $250,000 would have a typical 6% commission of $15,000. A discount broker with a commission percentage of 3%, on the other hand, would only charge a commission of $7,500. Keeping in mind that the buyer’s agent will also require a commission, that can work out to a significant discount.
Discount brokers will often also charge a low flat fee for houses under a stated value. Whether the fee is $3,000 or $4,000, that’s still a drastic difference when compared to the typical fees of a traditional broker.
Discount real estate brokerages tend to make up for their lower fees by processing sales more quickly than traditional brokers. As a result, agents with discount brokers are highly motivated to price and market homes aggressively.
One advantage to working with a discount real estate broker that many people don’t consider is the streamlined process. In many cases, the traditional process for selling a house can take many weeks and requires a very large amount of work.
Because discount real estate brokers are more concerned with selling properties quickly and efficiently, rather than providing a full range of luxurious services, these brokers tend to be more productive and cost-efficient.
Discount brokers are incentivized by their lower fees and need for efficiency to eliminate everything extraneous from the sales process. By eliminating everything that drags out the sale and expediting everything that gets results, brokers save both their own and their client’s money.
Are Discount Real Estate Brokers Better Than Traditional Brokers?
Every home and market is different. There’s no way to say whether a discount real estate broker is better for your situation without taking personal circumstances and needs into account.
It’s crucial to remember, however, that discount real estate brokers have several advantages that you just can’t get with a traditional broker. In addition to saving money, working with a discount broker can result in a faster, more efficient sales experience overall.
Consider using a discount real estate broker if you’re interested in saving money on commission fees, selling quickly, and enjoying the benefits of a streamlined process.