Will hiring a discount broker save you money?
Will hiring a discount real estate agent save you money when selling your home? In a market where many homes are receiving multiple offers and sellers have the upper hand. If your house will likely sell no matter what… why not save some money and hire a discount agent? A discount broker or agent is someone who lowers their commission drastically to drum up business. Aren’t all real estate agents the same anyway? Will you save money?
Let’s look at how a discount or flat rate broker works. Often this is a broker whose marketing proposition is that one of the agents that works for their company will sell your home for 1% if they represent both buyer and seller. Did you catch that? “If they represent both buyer and seller”. Out of curiosity I looked up the statistics for a popular discount broker in my area and found out that out of the 23 homes this discount broker sold in my local market in 2021, only 2 of them were double ended, meaning they represented the buyer and seller on only 2 homes that they sold. So the promise of selling for 1% happened only twice.
It’s also important to understand that in California it is customary for the Seller to pay the buyers agents commission so that 1% only covers one of the two agents in the transaction. As a seller you still need to pay the agent bringing in the buyer. The amount is of course negotiable, but on average is 2.5%-3%. So when a “Discount Broker” says they charge 1% to list your house for sale it sound great and many sellers interpret that to mean the total cost of selling their home is just 1%, but that is rarely if ever the case. Since sellers customarily also pay the buyers agent commission in reality you’ll be paying 3.5%-4% commission, not 1%. That 1% offer seems enticing doesn’t it?
Of course it does.. it’s used to get their foot in the door. Their business runs on volume much like shopping at a large membership warehouse store where you can get great prices on items if you buy a lot of them. But does it benefit you when you only have one house to sell and you want to get the most money for it when you sell. Is it worth saving 1.5-2% if you potentially lose thousands because you didn’t have an agent who was properly marketing your home or an agent who is an expert in negotiations?
I’m Maria D’Aura with eXp Realty. If you’re thinking about selling your home and want to know more about the advanced marketing strategies that I use when selling a home send me a message or give me a call. I’m happy to show you.