Discount Real Estate Agents Vs. Traditional Agents: Whom to Hire?
By Sadiya Anjum
It seems like the war between discount brokers and traditional brokers is not going to end anytime soon. But for our consumers the real question is – who should you hire? We all have a basic idea of the kind of services that traditional brokers provide. Discount brokers, on the other hand, provide different packaged services that you can benefit from.
Each firm which offers discount services has its own set of services to offer. Some may offer complete services, some may offer all services except a listing on MLS, some will offer only the services you require etc. The reason they are called discount brokers is simply because they charge a lesser amount. For any seller, paying the traditional 6% commission may make them wince a bit. Discount agents have different ways to charge their fee. Some charge a flat fee, some accept a really low commission (1-3%) and some let you pay for each of the services you may avail.
The disadvantage of paying a flat fee is that if your home does not sell then you may have paid for services to gain nothing in the end. Traditional firms usually charge a commission on the successful sale of a home. Discount agents (depending on the service you pay for) may not list your home on the Multiple Listing Service (MLS). This will reduce the exposure of your home to many potential buyers and it may take longer to sell. Traditional agents may also be hesitant to deal with discount agents if the commission will not be split. So their hesitancy is understandable as they stand to gain nothing from such a deal.
Some believe that discount brokers are not as experienced or will not be able to do the job properly. Discount agents counter the attack vehemently with their ability to provide all services with just as much of expertise as any traditional agent. It all boils down to the agent himself: is he experienced? will he live up to your expectations? will he be able to support you every step of the way? It is all the questions you may consider when hiring any real estate agent.
Some of us are highly suspicious of services or products which are sold at a lower price. We think that there may either be a catch or the quality will just not be the same. Being suspicious of discount brokers may be natural. But discount brokers are probably just trying to establish clientele or realize the need for reduced commissions/ charges as more people are beginning to understand that selling a home is not brain surgery.
It may seem tough to decide between the two but it is all dependent on your own situation. It depends on the market condition, the saleable value of your home and the services you are looking for. For instance those who are selling on their own (FSBO) may require only certain services such as handling negotiations, paperwork etc. In such a case, using a discount agent is the right way to go.
Analyze your own needs and what you require before hiring an agent. Make sure you do not land up with an agent (traditional or discount) who is all talk and no action. What is important is that you ask agents to give you the whole deal upfront – what they will provide and what they won’t, what are the total costs involved, any hidden costs etc. Hiring someone who has the expertise, commitment values and a good reputation will help you succeed. If you are still unsure, shop around in both segments before you hire an agent.
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