What are the advantages and disadvantages of dealing with a discount brokerage verses a full-service real estate company for the buyer, seller and Realtor?
“In a word - service!”
- De De M. Katchen, Keller Williams Jacksonville Realty
“A long time ago, papa always said you get what you pay for. Fortunately, Realtors have this thing called ethics, so this would keep me from saying too much more. I can personally say that I work about 60 hours a week to earn my living. I know that most of my customers work about 40 to 60 hours a week to earn the living that they have. Why would any one want to sell the biggest investment they have with someone that has about 20 customers a month to make the same living that someone like myself has around four to five customers a month? All things said, I think that if I was a customer selling my biggest investment, I would want the agent to been working on my home at least 20 percent of the time instead of 5 percent of the time with less advertising and less service.”
- Todd Arnold,
Re/Max on Park Ave
“A lot of the discount brokers make you deal directly with the seller, who has no idea what to do in a real estate transaction. Therefore the selling agent ends up handling both sides of the deal so they should get both sides of the commission!”
- Peggie Wattron, Century 21 Lighthouse Realty
“I work strictly from Sid Higginbotham Builder so I would not normally be involved with discount brokerage firms. I would make the following observation: when you receive something for less, as in a reduced listing percentage I would suspect, as a seller you would receive reduced services. There is an old saying that all of us know. ‘You get want you pay for.’”
- Bob Hawley,
Sid Higginbotham Builder
“Since the Sherman Anti-Trust Law clearly prohibits Realtors from engaging in discussions about what brokers charge for their various services, I believe that answering this question would probably not be a good idea. However, I would say that there are good, bad and in-between Realtors, just as there are good, bad and in-between doctors, attorneys and other professionals. Just because one charges more or less than the other does not, in my opinion, automatically set the standard. The bottom line is, most people have a pretty good idea of the quality of service they want, how much they are willing to pay for it and which agent and brokerage will meet their needs and accomplish their goals.”
- Elke McMenemy,
Re/Max 100 Realty
“The difference between the two types of companies is what many of the consumers are demanding. The business model is changing rapidly, and will continue to do so until the consumer is satisfied. Agents are part of this group of consumers looking for a better system, and those companies that fail to understand the needs will out of business tomorrow. Take a look at what has happened to the computer industry and the airlines. There are some companies saving money by cutting back on essential services to protect the consumer, but I would rather improve upon the processes required to provide quality service to the customers to save money.”
- Gary L. Harlow, Realty Executives of Jacksonville
“Discount ‘anything’ tends to be that way for a reason. Whether it’s real estate, finance, or title services, you usually get what you pay for. The highest quality people will work where the greatest opportunity for financial success is available and therefore you’ll find them at your full-service real estate companies, lenders, and attorneys. Working for a flat-fee or reduced fee at a discount brokerage provides less incentive than working on full commission. That’s another reason you’ll find significant service and experience differences between full-service lenders and credit unions. However, for those patient and frugal people, discount real estate brokerages, credit unions, and discount title companies offer an alternative.”
-Brad King,
Branch Banking and Trust Co.
“You always get what you pay for, always!”
-Jason Hoffman, Coldwell Banker Palazzo Realty, Inc.
“Since I’m not familiar with the programs they offer, I cannot answer this from any perspective other than the Realtor’s. In the situations where the other broker has an agreement only to put the property in the Multiple Listing Service, post a sign and install a lockbox, period, I have found it difficult to get the deal done. In my experience as selling agent, I received no help at all from the other broker, because that wasn’t what they agreed with the seller to do. The seller felt very knowledgeable and made every piece of the transaction very difficult due to his distrustful nature. With no one on the other side to bounce things off of, it was very tedious and frustrating, and required lots of extra time and patience, while the pay remained at the rate for doing half the deal. And perhaps the crowning blow was that, after several calls to the listing agency following closing for them to come by the closed house and get their ‘belongings’, I finally gave up and removed the for sale sign myself, and the lockbox [after getting the code from the listing agency]; I guess that their agreement only covered installation of those items, not removal. I took them to my office, where they sat for another couple of months until, again after several calls, they were able to come by and pick up their property.”
- Clare Berry,
Berry & Co. Real Estate
“What is it worth to the customer and what is it worth to me? If the money is there to pay for my time and effort - do the deal! A wise man once said some of something is worth much more than all of nothing.”
- Jeff Kern, Embassy Mortgage and Realty Services
“Well, if it makes any sense. The discount broker seems to have some gray area in the way he or she can play with the number. As it is true when dealing with a mortgage versus a banking institution, the mortgage broker can find rates and plans from several different companies and the banking institution has there set plans and if nothing is applicable to your needs they can’t seem to help in a lot of instances.”
-Robert McGee,
Associated Land Title
“I believe the biggest thing for a buyer or a seller to determine in dealing with a full service real estate brokerage firm or a discounted brokerage firm is to find out what they are giving up or gaining. Selling a home is sort of like buying a car. There are different accessories available on all models. You can get the one with all the bells and whistles or you can get the one that is a bare basic model. The buyer or seller need to make that determination and choose accordingly but they need to be informed enough to know what they are getting. You cannot get all the bells and whistles for the basic model price. Each company has their own model they follow which includes how much advertising will be done, how often and with whom. Does advertising include real estate magazines, television, newspaper, websites etc or does it amount to a sign in the yard. Will the home be place in the Multiple Listing Service? How will the client be represented? Will there be brochures placed in the home for potential buyers to take after they have viewed the home and for further reference? Will there be other marketing materials? What is the company’s professional reputation in the community? Are they noted for their knowledge and strong negotiation skills to assist the buyers and sellers in getting the best price, terms and conditions? Do you get regular contact and feedback from the agent? Are you a person or a number? How much will the seller or buyer be involved with the process? If selling, will they have to set their own appointments and have to be home to show or open the home? There are a lot of things for a buyer or seller to concern themselves with but the real question is what will they get for the money they will be spending and will the net amount the buyer saves and the seller makes far out way some sort of a discount. Somebody gives something up when an item is discounted. The buyer and seller need to determine what that is and make their choices accordingly.”
-Dan Daniel,
Prudential Network Realty
“Using a discount real estate broker works well if the seller knows a good deal about real estate sales, the buyer pays with cash, and the home is completely problem free with a great location.”
-Paul Gruenther. Watson Realty Corp in Jacksonville Beach
“With regard to the terms ‘discount broker’ or ‘discounted commissions’, commissions are not fixed and are negotiable; therefore, they cannot be ‘discounted’. When traditional companies talk about ‘discount’ companies, they are misleading the public by giving a negative connotation to business models that are not like theirs.
“As owner and broker of three of the 13 local Assist-2-Sell offices in Jacksonville, our goal is to give our customers and clients the same professional services our industry already provides but at considerably lower fees and commissions.
“We are a licensed full-service real estate company and members of the Northeast Florida Association of Realtors and the St. Augustine Board of Realtors. Our services include preparation of a CMA for the property and a detailed net cost sheet at no cost or obligation, providing the yard sign, brochure box, and fliers for the home, taking all the phone calls and handling all of the showings, paying for all of the advertising by marketing the home where buyers are looking including the Internet, newspaper, radio, television and in neighborhoods where they want to live [signs]; negotiating and writing the sales contract and helping buyers obtain financing, meeting with the appraiser and individuals doing the inspections, providing closing coordinators who work closely with the title companies and lenders and overseeing all the details right through to closing. The biggest difference between our business model and traditional companies is that we don’t require sellers to go into the MLS to have the professional services of a Realtor.
“Additionally, just like traditional companies, we get paid at closing - there are no up-front or hidden fees. Our slogan ‘Full Service With Savings’ is our registered trademark. From my perspective, there are no disadvantages to using a non-traditional company. There are currently two ways to sell a home - For-Sale-By-Owner and 6 percent - and this leaves a large gap for a real estate company to come in and provide the professional services of a real estate agent for a reasonable fee. The industry is changing. Buyers and sellers have access to all the information they need through public records, the Internet, and MLS to help them make an informed decision about how they would like to buy and sell real estate. Consumers want choices and to save money - Assist-2-Sell is the future of real estate.”
-Lorrie Reynolds,
Assist-2-Sell