Discount real estate brokers and firms sell your home for significantly less than the traditional agents who charge a 3% commission. This negotiation in fees can save sellers thousands of dollars in commissions.
Discount real estate agents generally offer the same services as full-service agents. However, their discount rate sets them apart.
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What is a Discount Rate?
“Discount rate” refers to the lowered fees of discount real estate brokers. However, sellers should weigh the benefits of discounted fees against the level of service and expertise of the discount brokers.
Discount real estate brokers are of the following types:
1. Flat Fee MLS Companies: These companies get you on the MLS for a small flat fee. Top Flat Fee MLS listing providers like Houzeo can complete your MLS listing within 24 hours.
▶️ Check out Houzeo Reviews: Here’s why Houzeo is America’s #1 FFM listing service.
2. Flat Rate Full-Service Companies: Instead of the typical 3% commission, these firms charge a fixed fee ranging from $3,000 to $5,000. Flat-rate realtors are an excellent choice, especially for high-end properties.
3. Low-Commission Estate Agents: Low-commission discount brokers offer full-service packages, typically priced at 1% or 2%. A low-commission agent handles everything from listing to closing.
4. Virtual Full Service: As the name suggests, they are full-service brokers that offer everything online. Online full-service companies like Houzeo offer 5-star customer support and offer management tools.
Pros and Cons of Discount Real Estate Brokers
When considering the services of a discount realtor, it’s essential to weigh both the advantages and disadvantages. Here’s a breakdown:
Pros:
1. Reduced Costs: Traditionally, real estate brokers charge 3% of the home’s selling price, while discount agents charge as little as 0.5% to 2%.
Want to save more? Read Now: Where Can I List My House For Sale By Owner For Free?
2. Access to BasicReal Estate Services: You get all the services of a traditional agent without paying the 3% commission. These services include assistance with pricing, marketing, and negotiations.
Cons:
1. Hidden Costs: Some discount brokerages may charge hidden fees at closing. Or they may offer traditional services on services à la carte basis, which may result in you paying more than expected.
2. Not Ideal for First-Time Sellers: Popular discount brokers like Redfin work virtually, limiting in-person interactions. This may not be suitable for first-time sellers or buyers who need constant guidance and support.
3. Lack of Personal Attention: Discount realtors often handle multiple clients simultaneously to compensate for their reduced commission rates, which can result in less personalized service.
4. Cancellation Fees: Be aware of high cancellation fees imposed by discount real estate companies. It’s crucial to thoroughly review the contract’s terms and conditions before signing.
How to Select the Right Discount Brokerage
Here are some parameters you should consider while choosing a discount broker:
1. Savings: Discount real estate brokers have different pricing structures. So, research the best discount brokers in your area before…
2. Technology: Technology can make selling or buying a house faster and easier. Look for companies that use tech, offer online forms, and have a mobile app.
3. Customer Reviews: Read what others have to say. Customer reviews give you a good idea of what kind of service you can expect.
How Much Can I Save With a Discount Realtor?
You can have net savings ranging from $1,632 to $6,680.
Normally, home sellers pay a total of 6% in realtor commissions. This 6% is split between the listing agent (3%) and the buyer’s agent (3%).
But discount real estate brokers work for a lower listing agent commission, usually between 1% and 2%. That means you save a hefty 4% to 5% on your home sale.
Now, if you’re buying a home, you could get a buyer’s rebate, like getting cash back after the sale.
A typical rebate is 1% to 2% of the home’s price.
For instance, if you were to purchase a $400,000 house and a company offered a 1% to 1.5% rebate, you would save a whopping $6,000!
Buyer rebates usually require certain requirements, including meeting the minimum price range.
Alternatives to Discount Real Estate Brokers
If you don’t want a discount Realtor, there are some alternatives to consider:
- Flat Fee MLS Companies: These companies can list your property on the local MLS for a flat fee, usually just a few hundred dollars. This way, you save on commissions and benefit from their technology to help sell your home faster.
▶️ How To Get An MLS Listing Without A Realtor: You can put your house on the MLS without an agent. Read now!
- Full-Service Realtor: If you want much help and guidance, you can go with a full-service Realtor you meet in person. They’ll provide you with all the professional support you need, but you’ll typically pay a full 5% to 6% commission.
- iBuyers: Some companies like Opendoor and Offerpad buy many homes across the U.S. for instant cash. If you want to sell your house quickly, iBuyers can be a great choice.
- Cash Home Buyers: Individual cash buyers or companies that buy houses for cash often make all-cash offers within 24 to 48 hours. This allows you to avoid the hassle of listing on the MLS, inspections, appraisals, and such.
- Selling For Sale By Owner (FSBO): You can list your home on the For Sale By Owner websites and save thousands in listing agent commissions. Here are the best For Sale By Owner sites.
