Discount! Flat Fee! Sounds like a good deal, right? Well, maybe not when it comes to selling your home. Yes, a discount real estate agent can save you money, but will he sell your house? There are many reasons why you may want to avoid going to the discount route.
First of all, the selling tactics of a discount representative can be well- somewhat lacking. Not always, but you will often have to do your own marketing and advertising. A flat fee broker will charge you an up-front fee. For this, you may get your home listed on an MLS site, which may be viewed only by a limited audience, because of listing regulations. That may be the extent of the marketing. Some companies purposely omit MLS sites from the marketing, because if another agent gets involved, the commission has to be shared. This eliminates a lot of prospective buyers for your home. Other companies may put up a sign in the yard, advertise in the paper and magazines, and work with contract negotiations. Because the companies vary so widely on the services they offer, you really have to do your homework to make sure you get what you need. Some discounters offer a price list of services they offer.
Now, if you hire a traditional real estate agent, you pay nothing up front. Yes, you will sign a contract with him, but he makes no money until he sells your home or, if for some reason, you default on the contract (which does have an expiration date). And, this is good motivation to get your house sold. Traditional agents and firms offer a variety of marketing tools for the seller. They will get the home into the local trade magazines, hold open houses, print MLS sheets, place the home on the Internet at local and national sites and some areas even have local television programs. Many will even come in, and stage your home for you or at least give you a list of things to do, to help get the house sold. You get all this and you haven't paid a penny for it.
Hmmm. sounds like a lot of work right? Do you really want to do that yourself? Yes, a traditional representative makes about 6% commission which he usually splits with the buying agent. That is a lot of money, especially, in making the houses more expensive. But, what if you have a hard time selling the home yourself or through a discount firm? Every month it doesn't sell, costs you money anyway. Traditional agents will often set a time frame within which they must sell your house. If they do not, you are free to seek a different broker and you are not out any money for the attempt.
Now, there are ways to save money and still use the traditional method of selling. There are many ways to negotiate down the commission fee. For example, if your agent happens to bring you a buyer, he will usually knock a percent or two off the commission. Or, if you agree to sell and buy with him, he will reduce the rates for the repeat business. Talk with him and see what he is willing to do for you.
This is not to say that all discounters are the same and that you will not get a great service from them, just a caution of what to expect. If you still decide to opt for the discount route, be sure to get everything in writing- fees, services, etc. However, your best bet is to hire someone who really wants to get your house sold. Discounters are concerned with the quantity of clients to off-set the discounts. Traditional real estate agents focus on quality and getting a sold sign in your yard. Do not sacrifice quality work for savings. The old adage is true: Sometimes you do get what you pay for. And that's not necessarily a good thing!