Ask a Realtor: Are there advantages with a ‘discount’ broker? (column)
September 1, 2017
Dear Joan: I am such a thrifty person that I have struggled for a year trying to decide whether or not to try to sell my house myself. Recently, I finally made a decision. I came to the conclusion that I will list my home and have a professional help me.
However, now I have learned that there are "discount" brokers who charge less commission and also some companies that offer the seller one set fee to pay, rather than a percentage of the sale. Now I am very tempted again to try to save some money by not going the traditional route of listing with a traditional brokerage firm. I have to admit that the thought of saving thousands of dollars is extremely attractive to me. I would like to hear what you have to say before I make my final decision. Thank you.
Dear Tempted: I think your source of confusion is that you are putting emphasis on the wrong part of your real estate transaction. The most important part to you, and almost all sellers, should be the amount of money you will "net" at closing. Instead, you have been focusing on what the real estate agent will get. You have been thinking that the less you pay the agent, the more you will get in the sale of your home.
I believe this is the cause of your possibly flawed thinking. Have you given any thought to finding the Realtor who will negotiate skillfully to get you the highest price, the lowest costs to be paid during your inspection, the best possible advantages at closing to protect you in the future and effective marketing to bring in the top buyers and brokers in your area?
Have you given any thought to the fact that a percentage-based fee is great incentive for your Realtor to spend his or her time and money to work toward securing you the highest offer? Would a single fee give that kind of incentive? In a highly competitive marketplace, what would cause a Realtor to offer discounts to the public? Do the best dentists, surgeons or financial advisers offer deep discounts?
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My advice would be to take a good look at this (possibly one of your largest financial decisions), and look at the entire picture. Take the time to interview the discount agents, the single-fee agents and the most successful "traditional" agents in your area. Yes, in a good market, you could list at a below-market price, and you could get offers and you could possibly sell relatively quickly.
However, did you accomplish your goal of saving money if you sold at a below market price? Or, in reality, did you possibly leave many more thousands of dollars on the table by going with what you might perceive as a "discounted" commission? By the way, commissions are always negotiable items (it is considered price fixing to discuss or set commission in the market place among competing companies), but remember, what you really need to be concerned with is what you net at the closing table, not what the agent will get paid. Best of luck with your decision.
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years. Contact Harned with your real estate questions at firstname.lastname@example.org, 970-337-7777 or http://www.skiandteehomes.com.
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