Discount realtors — those who charge less than “standard” commission to list your home for sale — have become popular in some markets. Is this a realistic way to save money? Although there are no laws governing real estate commissions other than tradition, the “normal” range is a total of 5-6% for residential transactions.
Practices vary, but quite often the old adage holds true: You get what you pay for. The problem lies in knowing exactly what you get.
What’s the difference?
A listing agreement with a full-service realtor will detail the time frame, explain provisions for extending the contract or terminating it, detail all the services to be performed, and fully disclose the amount of the listing fee as well as the commission split to be paid out at closing to listing and selling brokers. It’s all in black and white.
You should expect a detailed market analysis, a listing of “comparables” and some pricing advice, and you may also be offered helpful advice on preparing your home and keeping it “show-ready.”
The full-service broker is your advocate during the entire process and operates under strict legal and ethical guidelines.
Discount brokers are also licensed professionals, but because they agree to less compensation, their services are generally less broad. Some who charge flat fees do little more than arrange for an MLS listing. They may place a sign in your yard, but may not even field telephone calls for you, preferring to pass all inquiries directly to you. Others charge a low listing percentage of 1-1.5% and perform standard services, but may not be as accessible or responsive as full-service realtors. Others, especially if the market is “hot,” will hope to make money based on volume of business. They may, indeed, represent a dollar savings to the seller.
Remember, however, that the seller is almost always responsible for the total commission. If you opt to list with a discount broker, be aware that you are still responsible for a stated percentage of sales price to be paid to the selling realtor.
Enter into any transaction with your eyes wide open, by asking the necessary questions up front.