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Discount brokers: Getting what you pay for?

Sandra and Milton Logan couldn't bear the thought of once again paying a real estate agent a 6-percent commission. So when the couple put their Reno, Nev., home on the market in 2004, they chose to work with a reduced-commission brokerage, Reno-based Assist-2-Sell.

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Assist-2-Sell charged the Logans $4,995 to sell their home. For this fee, the company provided the Logans a real estate agent who did nearly everything a traditional agent would do: He placed advertisements in local newspapers promoting the home, stuck a "For Sale" sign in the Logan's front yard, scheduled showings, negotiated a final sales price, and handled the reams of paperwork that go into selling a home.

What didn't he do? He didn't list the Logan's home on the Multiple Listing Service, or MLS, the online database of homes for sale through licensed real estate agents. He did that so Assist-2-Sell would not have to share the commission with another agency. At the same time, the house is exposed to far fewer potential buyers and may take longer to sell. But in many of today's hot real estate markets, that's not a factor.

The Logans sold their home for $322,500 a little more than three months after they first placed it on the market. If they had paid a standard 6-percent commission, the couple would have spent $19,350, so they saved $14,355. Not surprisingly, the Logans, who put much of their savings into the new home they purchased in nearby Sparks, Nev., are thrilled.

"We had been using the same Realtor in Reno for a lot of years. But working with him took such a big chunk out of our equity every time we sold. We saved a lot of money by going this route," Sandra Logan said. "I knew that Assist-2-Sell had good exposure around here, so we weren't worried that our house would sit on the market too long. Our agent with Assist-2-Sell did a great job."

The Logans aren't the only sellers who have balked at paying agents the traditional 6 percent of their home's sale price as a commission, and Assist-2-Sell is far from the only reduced-commission brokerage that has risen up to serve such clients. Companies such as Foxtons, ZipRealty and Help-U-Sell each offer their own versions of discount service. Some, like Assist-2-Sell, charge a flat fee based on the sale price of a home. Assist-2-Sell's most popular program charges sellers $2,995 for homes that sell for as much as $200,000 and an additional $1,000 for each $100,000 increase in sales price. Others, such as Foxtons, charge a reduced commission. Foxtons charges sellers a commission of 2 percent of the final sales price, while ZipRealty agents charge a commission that is 1 percent lower than the standard commission in a given area.

-- Updated: July 14, 2005
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