|Discount real estate brokers: Get
what you pay for?
You've worked hard for the money -- the equity in
your house, that is, and now that you've decided to sell you're
reluctant to give a traditional real estate broker a whopping 6
percent commission for bringing you a buyer.
The good news is you don't have to. You have options,
and one of them is to sign on with a discount broker, a licensed
Realtor who is willing to shave off 1, 2 or more percentage points.
In recent years, a bevy of discounters has sprung
up across America. They have shaken up the real estate industry
by offering real estate brokerage services for less than the traditional
6 percent of the selling price.
In many cases they also provide somewhat less than
the traditional amount of service.
But generally, they are members of the National Association
of Realtors and are bound to the ethical standards of that group
-- and hey, who needs all that service anyway? While many sellers
do need the service -- as evidenced by the high percentage of them
who continue to retain full service brokers to handle their deals
-- others feel they can get by with less involvement by the agent,
especially if offered at a lower price.
Some discount brokers offer a menu of services and
tailor their fee according to the menu items chosen. Others say
they offer full services and simply are discounting the price.
which operates in 16 markets nationwide, will list your home on
the Multiple Listing Service, or MLS, show your property to prospective
buyers, and help you get the deal to closing.
"We offer home buyers and sellers all of the
services of a traditional brokerage," says Richard Roberts,
ZipRealty's vice president for marketing. "We charge significantly
less to represent the seller while still offering market-rate commissions
to the buyer's agent."
Founded in 1999, the California-based company charges
either 1 percent below the traditional commission or a minimum listing
fee of $2,000. That's in addition to an agreed-upon fee which is
paid to any cooperating broker who brings a buyer.
With the minimum listing fee, and assuming a 3-percent
commission to a cooperating broker, it would cost the seller of
a $200,000 home $8,000 to sell through ZipRealty. Had the seller
gone with a full 6-percent brokerage, the commission paid would
have been $12,000.
is another nationally recognized discount broker. The Reno, Nev.-based
firm offers clients in 45 states a choice of three marketing programs:
- Direct-to-Buyers: "The total commission is
a low flat fee, generally starting around $2,995," says Lyle
Martin, Assist-2-Sell co-founder and co-chief executive officer.
Assist-2-Sell agents will show your home, help with the negotiations
and paperwork, but won't list your home on the MLS. Martin points
out that in some markets where the range of values on homes is
narrow, the low fee may stay the same for all price ranges. In
most markets where there is a wider range of values, Assist-2-Sell
offices may offer a graduated fee structure. Choosing this option
means the buyer will be counting on an Assist-2-Sell agent finding
the buyer for your home through their own marketing efforts and
not through the cooperation of another agent through the MLS.
- MLS for less: Assist-2-Sell's total fee is determined
by adding the flat fee plus the commission -- 2 percent to 3 percent
of the home's selling price, which would go to the cooperating
MLS agent or brokerage who obtains the buyer. Your home would
be listed on the MLS and enjoy that broader marketing exposure.
Again, a $200,000 sale price would cost the seller the fee --
say $2,995 -- plus the 3 percent ($6,000) for a total selling
fee of $8,995, still a saving of slightly more than $3,000 of
the traditional full-service fee of $12,000.
- Paperwork only: You, as the seller of your home,
find the buyer on your own, but an Assist-2-Sell office will handle
all the paperwork that's involved with the real estate transaction
-- coordinating with the mortgage company, the title company and
the attorneys. "Typically, the fee is around $2,500,"
Real Estate, is a nationwide chain of franchise offices that
charge flat fees based on the level of service the seller chooses.
For example, for a flat fee of $2,950, agents will
advertise a home for sale weekly and on their own Web site, supply
yard signs, consult on the offering price, negotiate with potential
buyers and guide the sale through closing. This plan does not include
listing on the MLS.
They'll handle all negotiations, paperwork, contracts,
any counterproposals and manage your transaction through the closing
and even attend the closing. For an additional fee of $2,950, agents
also will show the home.
Direct provides full services for a flat 3.99 percent in nine
states -- California, Arizona, Texas, Florida, Maryland, Virginia,
West Virginia, Connecticut, Massachusetts -- and the District of
Columbia. Services include listing the home on the MLS, on Realtor.com
as well as on the Realty Direct site. Realty Direct will also hold
open houses, show your home to prospective buyers, advertise in
local and regional newspapers, negotiate the contract and manage
the post-contract process.