What Kind of Services Do Discount Brokerages Provide?
Looking to buy a home? Search all homes.
Looking to sell a home? Get a FREE home value report.
We have all seen the signs for discount brokerages around, so I decided to do some research about the service that is provided at the prices they talk about. Today I want to share what I found as well as some common misconceptions about these types of brokerages.
I found that these companies have a 1% listing commission. You should know that this is only going to pay the listing side. As a seller, you will still be expected to pay the buyer’s agent’s commission as well, which will be about 2% to 3%.
A 1% listing cannot maintain the marketing standards our company prefers. With such a low listing, you are probably not getting the professional photos and marketing coverage that your property deserves. Typically these listings are based on volume. If there are more listings, the quality does not need to be as high.
However, in our office, we like to make sure that each listing is taken care of by a team of professionals that do everything from marketing to open houses to photography so that we can showcase your house perfectly.
When listing your home, it is much like meeting someone for the first time. You only get one first chance to make a good impression. If your listing goes out with poor photos and bad marketing, you may miss out on that good first impression.
Oftentimes, the listing price is set by the brokerage. In order to do multiple listings throughout a short period of time, the strategy is to list your price low so it sells quickly and they can move on to the next one.
We prefer to list your home at the right price for your market and make sure that it gets as much exposure as possible and is shown in the very best possible light. What we do not want to do is lower your return just to quickly get the home sold.
Statistically, we find that homes sell for more and have fewer days on market when they are listed by a professional and full-service brokerage. For this reason, I wanted to understand what was going on with discount brokerages and how the standards could be to our specifications with such a low price. The bottom line is that they just can’t.
With a full-service brokerage, the full package is what you are looking at—the photos, the open houses, the marketing plan, the strategies, and the negotiations. If a broker cannot negotiate a reasonable return for their commission, how can they negotiate properly for you to get the highest and best offer?
Additionally, with a 1% listing, if there are any additional things to do to make sure your home is being shown properly, that charge will be added to that percentage. This means that photos and listing it for a higher price may result in extra charges. Listing with a full-service brokerage will give you everything you need to get the best offer.
If you have any additional questions or are interested in buying or selling, please feel free to reach out to me. I look forward to speaking with you soon.