Discount Real Estate Brokers
Although today, discount real estate brokers are nothing new, they are still making waves in the real estate world.
Many have come and gone, most making enemies in the real estate industry by undercutting the commission that most real estate agents offer.
What Exactly is a Discount Real Estate Broker?
Discount real estate brokers are licensed real estate brokers who offer a similar set of services as a standard real estate broker, but at a substantial discount. Some have confused a Discount Real Estate Broker with a Limited Service Broker. Both offer to reduce the commission that is charged, but a Limited Services Broker will usually only put your new home for sale in the MLS so it gets put on local real estate websites and the home seller is responsible for many of the standard functions of the REALTOR. Some limited service brokers offer services ala-carte to their home sellers. How much they take depends on what level of service they are providing to their clients. There is another term to not be confused with a true Discount Broker and that is Flat Fee Broker. Those brokers generally take a flat fee to have your home put into the local Multiple Listing Service. That lets the home be visible by all other active agents with a potential buyer. In the Flat Fee Real Estate Broker model, the seller is usually responsible for showing the home, taking offers, negotiations, contract reviews and most other aspects of the real estate transaction. A TRUE Discount Real Estate Broker provides a similar set of services as a full service broker but takes a much smaller commission, claiming to save the home seller thousands of dollars in commissions.
How Can They Do Offer The Same Real Estate Services At Less?
Although this varies substantially from each broker, as a general rule, they eliminate a lot of the excess, time consuming real estate functions that are obsolete, but are pushed by standard agents. This list will vary by the company but may include:
Holding an Open House
Showing Up For All Showings
Daily Phone Calls to the Home Seller With Updates
Discount Real Estate Brokers claim that they can leverage technology to achieve the same sales price of the home for sale, but utilize technology as opposed to raw time and energy to get the home sold. In addition, limiting the services that no longer produce results.
Many of the Discount Real Estate Brokers take a smaller percentage of the commission for themselves, but offer a competitive commission to the cooperating broker. Since most homes that get listed are actually sold by another cooperating broker, they still have incentive for every other agent in the market to bring a home buyer to the table.
Do They Represent Home Buyers?
Many Discount Brokers work hard to get both sides of the transaction. This is an easy way for them to bring additional dollars to their bottom line from the same client. In many instances, they leverage technology to generate buyer leads but may not participate in much paid advertising on the listings that they offer to the public as they don’t generate as much revenue when those homes are sold.
On the listing side, many Discount Real Estate Brokers work off of generating a lot of listings. They set up systems (based on real estate technology) in which very little time is put forth on the marketing and coddling of the client.
Do Discount Real Estate Brokers Really Work?
Just as in anything, you have the good and the bad. A Discount Real Estate Broker that has solid technology systems for automating the marketing on their listings can provide the same results as a full service real estate broker. On the other hand, some may do very little to get your home sold other than put it in the MLS. In either case, if you are a “needy” home seller and want to speak with your REALTOR every day, ask a lot of questions, have them stage your home for showings and hold your hand through the transaction, a Discount Real Estate Broker may not be what you are looking for.