Thinking of selling your home? Then you’ve probably already looked into using a traditional agent and factored in their commissions.
If you’re anything like most sellers, after discovering the amount of money you’ll have to pay to list and sell your Central Ohio home, you went online and searched for “better ways to sell a home” or “find a discount real estate agent to sell a home a less“. There are two ways to reduce the expense you’ll pay out on commission when selling your home: Sell the home yourself (For Sale by Owner), or by listing your home with a discount broker.
While selling the home yourself may initially seem like a great way to save, it’s important to keep in mind that the real estate industry would not exist if selling a home were easy. Beyond this, most FSBO sellers think they won’t have to pay any commission at all, however, if the buyer has an agent you’ll have to pay their 3% commission. According to NAR’s 2015 Profile of Home Buyers and Sellers, 87 percent of home purchases included a real estate buyer’s agent. If you fail to offer a buyer agent commission, there’s no motivation for them to show your home. Furthermore, while you compensate the buyer’s agent for their services, they represent the best interest of the buyer — and the buyer’s interest is to purchase the home for the lowest price and under the best terms possible.
While you may have bought or sold a home or two in the past and feel you can manage, the buyer’s agent does this for a living and is an expert, and skilled negotiator. Homeowners don’t have access to, and the ability to promote their listing in the MLS, local brokerage and agent websites, and the overwhelming majority of the top consumer sites including Realtor.com, Trulia, Homes.com, HomeSnap, etc. or mobile Real Estate Search Apps which now make up over 50% of searches (thus if your home doesn’t appear on these mobile search applications, you’ll fail to reach over 50% of homebuyers). For more on this topic read 6 Reasons You Should Never Sell a Home Without a Real Estate Agent.
The fact is a competent listing agent will net your far more than their 3% listing fee, not to mention few buyers even consider For Sale By Owner Listings when shopping for a home, and those buyers that do almost exclusively do so because they know the seller isn’t represented so they expect they will be able to pay a lower price.
Using a discount broker means one of two things: you get all the perks of working with a full-service real estate agent at a discounted flat rate cost, or you pay for partial service (such as just having your home listed on the MLS). Still interested in how listing with a discount broker works? We’ve broken it down for you.
How Do Discount Brokers Operate?
Discount brokers provide the same services and operate in much the same way as traditional brokerages but without the hefty commission. Some discount brokers charge a simple flat fee or a small percentage. This means you as the seller retain more of your home’s equity and net more from the sale. In the case of buyers, these savings typically come in the form of a home buyer rebate at closing which can be used to cover expenses, or as cash in your pocket.
While saving money is always worth pursuing, listing your home as an FSBO is a steep road to go down for little-to-no-profit on your end.
A recent study showed that the average FSBO home sold for approximately 24% less than a home listed by a real estate professional – this is 3x what these FSBO sellers would have paid both the seller’s and buyer’s agent – and they still had to pay the buyer’s commission. As you can see, not only is selling your home FSBO a hassle, it’s actually quite expensive.
Sell or Buy a Home with Us and Save Thousands!
Call us at 614.245.5353 to get started.
What Are the Pitfalls of a Discount Listing?
When you hear an agent or brokerage advertising to sell your home as a discount listing, you often find out they aren’t full-service agents, which means they’re willing to perform some services, like list your home on the MLS, but not others, like installing yards signs, assisting with staging, taking professional grade listing pictures of your home, creating fliers, etc.
Listing your home on the MLS is an important step in selling your home, but you and your home deserve more. A full-service agent goes above and beyond providing not only the way to sell your home but also the means.
Will Agents Show Listings That Are Not Paying a Full 3% Buyer Broker Commission?
You may be wondering if other agents working on behalf of a buyer will even show a listing that does not include the typical commission rate. The short answer is no, the long answer is a bit more involved.
When looking to show a home to a buyer, agents aren’t only looking to confirm the home’s features match their client’s needs, but also the buyer broker commission offered. Sellers pay real estate commissions however, if the commission offered is below the standard 3%, this will force the agent to advise their buyer that if they elect to purchase your property, they will be responsible for the 1% deficiency. In almost all instances a buyer will elect to forgo the listing rather than pay an additional 1% which they wouldn’t be required to pay on just about any other home available for sale.
What’s in a name?
When working with a discount broker, it’s critical that you select a reputable agent that works for a brokerage that isn’t exclusively known for offering discount services. This is due to a common practice among brokers to shun homes listed with discount brokers, this in an effort to maintain and enforce existing commission rates. Using a name brand broker, or top rated local brokerage such as NextHome ensures that buyers agents aren’t aware you’re the beneficiary of discount services and thus that your listing, or your offers in the case you are a buyer, receive full consideration.
Using the right discount broker can go a long way toward getting you the service you deserve, without costing you an arm and a leg.
If you’re looking for a local and full-service agent from a major brand that will list your home for a discount fee we can help.
