Feb 9, 2015

Realtors: Discount vs Full Service

The debate continues between the value of a full service and a discount Realtor. Just like you can change your own oil or program your own computer, you can sell your own house. Recently I've heard agents talk about the difficulties of trying to work an offer when the seller is using a limited service company.

Some folks don't understand the difference between the two.

  • A full service brokerage is just that - they offer the full services and set their fee accordingly. Their fee includes a commission paid to the buyer's agent as well.
  • A discount brokerage ( also known as a limited service broker) typically charges either a flat-fee or a discounted commission for limited service and assistance. The amount they offer a buyer's agent varies as well.

  • The services are very different. If an owner wants to sell the property himself and just needs a brokerage to place it in MLS, then they don't need my services. But selling a home usually requires more than sticking a sign in the yard and placing an ad. As a full time, full service agent, I spend a lot of time and money marketing my listings and exposing them to the most buyers possible.

    Any Realtor can list a home at a low price and get an offer. Will it be the best price you could get? This is where expertise and extra work pays off. Listings that sell at top price are typically those well price, well marketed and exposed to the most buyers.

    Most full-service agents hire professional photographers and spend considerable time getting the best photos. The pros know how to accentuate positive attributes through photos. I cringe when I see a property hit the market without photographs because I know that agents and buyers are passing them over. Full-service pros tend to have high quality marketing materials as well. And they pay a scheduling service and lock box fees to ensure the property offers easy access for buyer agents. They track and follow up with everyone who sees the house. Like all commission jobs, there are a lot of dead-end hours behind every sale.

    Full-service agents also counsel sellers on staging and presenting a property. A full service Realtor has the finesse to market via an open house if it suits the property. There is an art to working buyers who come through the home without making them feel hounded or harassed.

    A good full-service agent should offer great negotiation skills as well. An agent who sells at a discount commission is often ready to sell the property at a discount as well. And they keep the paperwork moving and ensure things are legal. Before you hire a discount agent, ask them these questions in addition to the normal questions you should be asking an agent:
    • How will you market the property? What technology do you use?
    • How many years have you been in real estate and how many properties have you sold in this area?
    • Do you personally know the other agents in the area? (85% of the time the buyer for your Dallas home will be represented by another agent in the area)
    • How will other agents book showings and access the property?
    • How do you come up with an asking price?
    • How will you handle the contract and paperwork to ensure we close on time?
    • May I speak with your most recent clients?
    • What are the additional out of pocket fees to me? (photography, advertising, printing, ...)
    • What does it cost me if my house doesn't sell with you?
    A limited service brokerage works for some people. Just take a look at the entire package offered by the agent you interview and decide if they are right for your specific needs.

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