Are Discount Real Estate Brokerages Worth It?

This is America 2014 … and things are constantly changing – fast. As such, I understand that there are those who are looking at alternative ways to sell real estate.  And hopefully saving a few bucks for it. Many home sellers at one point or another check out discount real estate business models, that pledge sweet “results” at reduced costs. While claiming to still offer the same high quality service as their more costly brethren.

Realtors Commission Splits

Realtors Commission Splits

Are Discount Real Estate Brokerages Worth It?

I get that the idea of potentially saving some cash sounds intriguing. And I also understand that most Realtors, like myself, are hard working agents that are just trying to make ends meet — doing the best they can to make an honest living as a means of supporting their families. But that’s were the similarities end.

For instance:

Help-U-Sell says; “Our choices are simple, although they do vary by office. In general, you can save the most amount of money by showing your home yourself and conducting open houses.”

Meanwhile, most non-discount Realtors spend their valuable time keeping up to date on the newest technologies and legal issues that drive our market. Are constantly going out on “MLS Board Tours,” keeping updated on the competing inventory and introducing their newest listings to the other Agents on the Board of Realtors; making listing videos and creating Youtube tours for them. Then creating electronic flyers (E-flyers) and sending them throughout their Social Networks.

New Listings Need A Realtor That Knows How To...

New Listings Need A Realtor That Knows How To…

Yet, when it comes to our cut-rate cousins, their philosophy leaves me more than a bit mystified and concerned.

Example; Just down the street for my home in St. George, Utah (actually Bloomington) , a listing has been dying on the vine that has discount brokerage signs littered around yard…but no flyers. A sweet home with great amenities – and one that is surrounded by listings that have sold relatively fast. But this listing is just lingering like an unwanted guest. And I’d be willing to guess that the sellers have no clue as to why?

The reason is pretty simple…

Commissions Count

Commissions Count

They’ve just unknowingly become a FSBO that’s willing to pay the “Buyer’s Agent” (Ordinarily, the “For Sale By Owner” set aren’t overly keen to “cooperate” [aka pay a commission] with Board Realtors) a reduced commission. And more often than not, their property is never even put on the MLS (listing the property on the MLS cost extra). Combined with their train wreck of  a web platform and weak content, any listing that ends up their is destined to languish in obscurity. Relegating that property – that home you hoped to sell fast – to a third tier Assist-U-Sell domain, rather than an industry leader… like Realtor.com.

FSBO x Help-U-Sell = Obscurity

FSBO x Discount Brokerage = Obscurity

In order to sell a home in today’s real estate market, it takes proper marketing. Needless to say, marketing today takes time, skill and costs some serious cash. So, if these guy’s are claiming to save the seller’s $8k in commissions on a $200k transaction … where are they cutting their marketing costs? And with the reduced marketing, comes reduced exposure … ultimately leading to a lower sales price.  Listen for yourself, and see if this makes fiscal sense.