Given the ‘difficult’ state of the housing market in recent years, there’s little surprise that a large number of real estate agents are offering big discounts on their services. This is naturally attractive for property sellers, given that the lower the fees they have to pay the more they keep of the proceeds from their sale. With property prices not at their best often this is a major priority for many people. However, as Agent Harvest point out, using a discount service is not always the best approach and the discounts may not be as large as they first appear.
Menu Style Pricing and The Real Cost
In many cases the discount realtors offer a full range of services based on a menu style pricing system. The advertised price is often only a fee for listing your property; while listing on the Multi-Listing-Service (MLS) is not a bad thing, this part of the service is only the starting point for selling a home. In effect opting for this service only from an agent is almost, but not quite the same as selling your home yourself. There are some advantages to this route, if your prepared to invest time and energy in conducting viewings yourself, negotiating with potential purchasers and are fully aware of the legalities of the buying and selling process. Some local listing services will also allow you to pay a fee to list in your area and this may include posting details on the MLS. Ultimately, if you only choose this option from a discount realtor you may in reality be as well off paying the fee for listing the property yourself. Selling your own property is not for the faint hearted and involves a lot of additional work and expertise, so a discount realtor should be only chosen if you feel you can effectively do much of the work yourself.
Added Extras and Hidden Costs
Most discount realtors will offer enhanced services; each option comes with an additional cost and ultimately, this approach depends on your circumstances. As with a basic listing service you may, or may not have the time and expertise to conduct negotiations yourself, so discount realtors can allow you some flexibility in what you pay and what you pay for. However there are a number of downsides to using a discounted service as opposed to a full service and these can make a big difference when it comes to selling your property as quickly, and at the best price possible. Discount agents often list and represent a huge range of different property types. Those offering a full service tend to specialize in specific property types and/or neighbourhoods. Specialist knowledge counts, when it comes to selling prosperities, and it’s unlikely that a discount realtor will have as much experience as a professional who has worked in the industry for many years.
Established real estate agents offer experience in a number of crucial areas when it comes to the buying and selling process and often have a number of important local contacts too. While intimate knowledge of a neighbourhood is not an absolute requirement in an agent, it really can make a difference when it comes to selling the property to potential clients. This knowledge can include local facilities, schools and infrastructure. It can also cover past, present and future developments along with an understanding of historic prices in the area. Experienced local agents also offer advantages to you as the seller; they should know the type of property you own, who is likely to buy and what prices you can realistically achieve in the current market. While you may have an idea of all of these things, an experienced agent is best placed to understand all these aspects fully. It also helps them to identify which individuals are most likely to be interested in closing a sale, distinguishing them quickly from those that are less interested.
Any realtor relies on a closing a sale for their income; however discount agents (especially those on a flat fee) may be willing to cut corners to achieve the sale. They may be less interested in achieving the best price they can for you and more on simply receiving their fee. More experienced agents on a percentage commission (you can always negotiate this) have much the same motivation as a seller. It’s in their interests as well as yours to get the best possible price. In effect this can mean you may feel more able to trust a realtor acting on this basis. In cash-strapped times it’s easy to opt for the cheaper option but as the old saying goes “buy cheap, buy twice”. With real estate sales and purchase, paying out once should always be your first choice.
About the author:
Home owner and property investor Matthew Rivera has several years’ experience working with a range of realtors; from experience he recommends that discount realtors do not always offer the best solution.