Understanding Discount Brokerages

In recent months you may have noticed more and more signs appearing on lawns of homes for sale from so-called discount brokerages. These brokerages offer a discounted rate which can range from a flat fee or an extremely small percent to the seller merely paying a fee to list their home on MLS. These brokerages peak the interest of many homeowners with the promise of saving money. Of course, who doesn’t want to save some cash? However, the old saying “you get what you pay for” does come to mind. Discount brokerages focus your attention on money saved but how often do you see attention focused on what full service Realtors offer? We have the advantage of providing you with an entire team of real estate professionals from mortgage brokers to home inspectors to lawyers. Many Realtors have had a working relationship with these professionals for years. We offer complete document services through our brokerage, confidentiality and expertise.

The lowest fee available for home owners with most discount brokerages is for your home to simply be listed on MLS. With this, you (the seller) are responsible for taking calls from any realtors interested in showing your home. You are responsible for all showings. Many of these showings will take place during the day, which can result in lost time at work; and this needs to be factored in as an overall cost and hassle. Additionally, it can be uncomfortable allowing strangers into your home. Witnessing an unfamilar person going through your personal space can feel very intrusive. Negotiating a home sale can also be tricky business. Most owners will have a biased opinion towards their own home. Hearing negative comments from potential purchasers can create bad blood between seller and buyer. What about the legal aspect of the sale? Are you confident enough in the laws governing real estate sales to ensure that the contract is proper?

Even if you choose a flat rate (which is reduced compared to traditional brokers) from a discount brokerage you need to be aware that the level of service provided will also be reduced. A full-service Realtor incurs many additional costs in listing your home. Not only is your home featured on MLS, but many of us go the extra step to pay for advertising in various home magazines in the area (such as Homes and Land). We email client databases, have numerous brokerage contacts and fellow realtor relationships. We work tirelessly to advertise your home and to help you in every way we can along the way.

When you are considering hiring a discount brokerage you do need to educate yourself on how their rates work. You will pay simply the flat rate IF the discount brokerage lists AND sells your home. If a full-service Realtor brings in a buyer to purchase your home you will need to negotiate a rate with that Realtor. Most professional Realtors have spent a lot of time with their clients and not getting paid is unacceptable. This rate will be in addition to what you have agreed to pay the discount brokerage in your listing contract. How much do you actually save? Currently in the Grande Prairie area there are 261 active Realtors. Five of those are affiliated with discount brokerages. The likelihood of your home being listed AND sold by the discount brokerage is statistically slim; not to mention what happens to you when you are represented in this type of a situation.

Ultimately it is up to you, the homeowner, to choose what level of service will work best for your needs. It is so important to be aware of all cost implications associated with your home sale whether you choose a discount brokerage or go the more traditional route. Selling a home is an emotional and time consuming journey. It can also be downright overwhelming. As a full-service Realtor I am proud to say that I am focused on ensuring your home sale is a smooth and stress-free transaction. I am here to support my clients long after the “sold” sign goes up as there is still much more to do!

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Helen Harder

Helen Harder

CENTURY 21 Grande Prairie Realty Inc.
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