Most homeowners understand that a full-service broker isn’t necessary to achieve your objectives when selling a home. Instead, using alternatives like discount real estate brokers or for sale by owner websites, you can achieve similar — if not greater — success. There’s a caveat: you need to find the right discount broker or FSBO website.
What Is The Difference Between a Full-Service Broker and a Discount Broker?
Discount real estate brokers have become especially popular since companies like Clever Real Estate have made it easier for sellers to access these discount real estate agents.
But, the recent popularity of discount real estate agents has also led more sellers to consider what differences they can expect, considering the broker takes an extensive pay cut.
Service Offered
If a discount real estate broker says they offer the same service as a full-service agent, you may expect assistance at every step and no need to fork over additional cash. That’s not always the case with discount real estate brokers. Some Clever Real Estate reviews reveal the extent of service some sellers receive, including:
Real estate agents taking property pictures with a phone or having to pay additional fees for professional pictures
Paying more for assistance with escrow, and
Being responsible for showing your home (without help or prep from a realtor).
The service you receive doesn’t depend on Clever’s cleverly crafted promises. It depends on the real estate brokerage they recommend.
While there are plenty of success stories about sellers getting above asking, achieving a quick sale, and having the most attentive broker, these reviews display a distinct difference. In neighborhoods where homes are typically priced in the mid or higher 6-figure and 7-figure range, the service is more attentive. But selling a low 6-figure property or even a 5-figure home, you’re better off selling your home with one of the many for sale by owner websites.
Dual Agency
Sometimes discount brokers may cost you a lucrative sale because many discount real estate brokers prefer having a dual agency — representing both the seller and buyer — to recoup some of the losses they make in commission from the seller’s side.
That’s not to say every experience is a bad experience, but you’ll want to be wary about that.
Selling Price
One peruses of the one-star Clever Real Estate reviews, and you’ll discover a common theme: a recommended broker has trouble selling the home during a hot market. Yes, this can be because of a seller’s adamancy to list at a price that isn’t attainable in current market conditions. However, the reviews paint a picture of agents wanting to get done with the sale as quickly as possible to free up their calendar and make a commission from other properties. Sellers who took the agent’s advice discounted their homes by as much as $35,000. Essentially, the cost of the 1% commission plus the $35,000 off the home’s value means sellers would likely save if they used a traditional real estate agent.
Cost
A discount real estate agent will always be cheaper than a full-service agent, as most discount agents ask for between 1 percent and 1.5 percent commission at closing. However, they could cost you as much — if not more — than a traditional agent if you aren’t careful with the type of realtor you select.
Weighing Up Your Choices
If you’re concerned you could have one of the more unpleasant experiences with discount real estate brokerages, consider your options and determine if listing with a discount realtor is still worthwhile.
Full-Service Real Estate Agent
Full-Service agents are expensive. You spend 6 percent on the service after adding the commission of the buyer’s agent. However, their 3 percent commission ensures they don’t have to take on a ridiculous number of clients to maintain their income. The result is a more attentive agent invested in securing you as much money from the sale.
Discount Real Estate Brokers
Discount real estate brokers are cheaper than full-service agents, asking only 1 percent at closing. Because of this, the level of service can vary. Sometimes to invest less time into selling the home, an agent may expect you to pick up some slack, like showing the property or covering professional photography costs, since their commission may not enable them to cover these costs.
For Sale By Owner Websites
If you’re going to be showing your home anyway and paying for professional photographs, you will have better success For sale by owner websites. These benefits make it easier for sellers to sell without a traditional listing agent.
As a seller, you still get onto the MLS, but you effectively have more control of the process and pay 0% in listing agent commission. The no-commission offer is available because these for sale by owner websites — like Houzeo and Beycome — have digitized access to the MLS and help owners navigate selling with confidence but without the exorbitant cost. Besides, since for sale by owner websites don’t put too much emphasis on the relationship with the listing agent, the possibility of having a bad apple is greatly reduced.
