Discount brokerage or flat fee brokerage is going to charge you somewhere in between 1% to 2%. In this area, they charge you at 2% just to list your home. What you need to know is that you have to pay a buyer’s agent commission of at least 2%. In the end, you’re really looking in a total commission of 3% or 4%. And the crazy part is that a normal agent who’s going to work their tail off for you, will charge somewhere between 5% or 6%. So, you’re not really saving that much because in the end, with a discount brokerage, you get what you pay for.
Like if they’re charging you less for services, it’s because they are not providing as many. Let’s talk about it more.
You’re going to get a discounted rate to list your home. You still have to pay the buyer’s agent, and you’re going to do all the work. From preparation, staging, photos, videos, marketing collateral, fielding call from agents and buyers, scheduling showings, doing open houses, going over contracts, and then once you get an offer accepted and you’re under contract, you’re going to be basically, the one project managing the whole deal. Making sure that the buyer’s deposits have come in. That they scheduled the inspections. Title and service has been ordered, and everything that you don’t think about is on track. So that you can close on time. Those are just some of the things to think about.
The other thing is, if you go with flat rate brokerage is that a lot of these companies bank on the fact that this process is overwhelming and if you don’t know what you’re doing you’re going to get overwhelmed very quickly. If you go with flat rate brokerage that charges XYZ to list it on the MLS, they will offer to do the photos, videos, open houses, help you with the contract, etc. for more fees. So, it is all add-ons. By the time you’re done adding everything up, you might as well just paid the standard commission. The other thing to think about is the terms of whatever agreement you go into. A lot of these companies make it really hard for you to cancel their contract, and if you do, there’s more fees for you to pay and wait for more time to be able to re-list your home with someone else. So make sure you read all of the fine prints.
The other thing I’m going to mention is that some of these companies will say that they will only charge you for 2% and they do, but then they don’t actually put it on the MLS and you’re not really paying a fee to the buyer’s agent. Which is kind of, I really don’t know what to feel because those buyer’s agents, that’s where you’re going to get the most eyes on your property. Things to think about and to be aware. I don’t want to say that it doesn’t work, because it does work. I know people that buy and sell all the time and don’t mind doing all the extra work for themselves, and they can still make it work. But if you are a first time seller or if you haven’t bought or sold property, recently, it may not be the best solution for you. I’m just putting it out there.
If you have any questions, feel free to contact me.