Sellers have a lot on their plate. Not only do they need to prepare their belongings to move out and ready their house for the potential buyers, but they also have the worrisome task of finding a great real estate agent to represent their needs.
As sellers get overwhelmed with the process, they may mistakenly look only at what someone will charge them to see their home without understanding what the final outcome may be.
A discount agent may seem like a good strategy compared to going with a full-time realtor when simply looking at cost.
Discount agents often represent themselves as providing the same service as a full-service real estate agent, but at a lower commission rate. Is a lower rate really a better deal?
What is a full-service real estate agent?
A full-service realtor is often wholly involved in the sale of your house.
They may charge a higher commission, such as 6% of the sale of your home, which typically covers such expenses as marketing your home, open houses, negotiations and paperwork to name a few.
Marketing costs may represent a large amount of those expenses, including services such as online marketing, MLS listing, direct mail, custom website or signage.
Different strategies may apply to different teams, but the bottom line is that full-service agents charge a commission rate that covers all their services.
What is a discount agent?
Just as the title suggests, a discount agent offers discounted services. These agents typically charge less, often advertised as low as 1%.
With this rate, there are usually more expenses to you not advertised, and you’ll likely get fewer services than what you would get with a full-service realtor.
Some discount agents give limited marketing packages that you can pick from depending on your preference. Others allow you to select what you want to pay for, from a list of services.
Discount vs. full-time realtor: What is best for you?
The main appeal to use a discount agent is simply to save money. However, lower costs could potentially mean lower expertise and quality of service.
Many sellers may believe the 6% or more commission is too high, so they consider a discount broker for a cheaper deal. What they may not understand is that the percentage paid to a full-service realtor often translates to a more skilled and experienced agent.
A full-service agent will offer much-needed guidance and professional service, providing more value for the money.
An agent who has complete knowledge of the real estate market and the entire selling process will guide the seller through every step to avoid minor oversights.
Simple oversights throughout the process could cost the seller more money than any discount they initially received.
Discount realtors may not actively market the property. Simply add your property to the MLS and not marketing outside of that would likely net you less overall interest in your property.
A full-service real estate agent goes the extra mile to invest time and money to the marketing process. This includes running ads, using social media and utilizing local resources.
They actively promote the properties, therefore giving it maximum exposure to potential buyers.
A full-service realtor will typically visit your house, tour it and talk to you about any problems with the house or renovations that you have been through while living in it.
They will use this information in addition to their knowledge about sales of similar homes in your area to set the best price for your home.
By doing their homework in advance, the agent may be able to circumvent unnecessary price drops or longer times on the market.
The agent will also take professional photos of your house that highlight the parts of a house that buyers love to see. Such pictures can help set your listing apart and land you the best deal.
If you happen to be great at marketing and negotiations, and you only want to pay someone to handle the paperwork, a discount realtor may be an option for you.
Although that may work for some, most sellers are not as skilled in marketing and negotiations as a real estate professional.
Professional real estate agents have the resources and expertise to increase the exposure of a property. A full-service real estate agent will be able to give encouraging information to the buyer and point out the best attributes of your home.
They will also be in a position to compare it with other homes in the same location and be available to answer questions that may pop up during the course of the showing.
This could result in higher sales that negate the commission discount from a discount agent.
While discount realtors are likely to take on any property, full-service realtors often specialize in specific markets.
You want to get a realtor who specializes in the kind of property that you are selling because they will likely be better positioned to sell quickly and at a good price.
With a discount brokerage, the sales and commission are often fixed, but a full-service realtor may offer more flexibility.
Commissions, marketing expenses, inspection fees, rebates, cleaning and repairs, and other services can be negotiated.
They can prepare a custom contract for you, to help you get the most out of your situation and earn you more in the process.
Ultimately, you have to choose what is best for you and your personal situation when it comes to selling your home.
You may save some coin in the commission rate with a discount brokerage, but are you getting the best return on your investment when you calculate the final numbers?
Both approaches can be successful, but keep in mind that there are other things to consider besides cutting costs. Before choosing who to work with, consider the type of property you are selling and the type of real estate market your area is experiencing.
Additionally, think about your comfort level and knowledge of the process, your desired closing timeline, and the time you have to devote to deal with all aspects of selling your home.
If expertise, speed and available time are some of your concerns, you might want to consider the services of a full-service realtor.
Have Questions? Ask Leslie!
Give Leslie Stirewalt a call today at 916-548-8629 to learn more about local areas, discuss selling a house, or tour available homes for sale.