How to Pay Low Commissions Through Discount Real Estate Brokers
Paying 6% in commission is the bane of selling a property. Yet the figure is often touted as “industry standard.” The truth is you don’t need to be paying 6%. You can still achieve a successful property sale by using discount real estate brokers or low-commission real estate agents that charge you a fraction of the fee your traditional realtor would. Furthermore, using these discount brokers doesn’t mean you get substandard service. Instead, you get the same full service but can keep more of the profit from the sale. If that is appealing to you, all you need to know is where to find these kinds of agents.
Understanding How Low Commission Real Estate Agents Work and Where To Find Them
Given that most real estate agents despise lowering their rates 一 even though the figure is negotiable and not industry standard 一 it’s unsurprising that finding a low commission realtor is challenging. Your city may only have a handful of low-commission real estate agents, which is why it’s great to know about other options. Options like discount real estate brokers and flat-fee agents. These are more widespread and more reliable options to your regular low commission real estate agent but still offer the benefits your low commission agent does.
Discount Real Estate Brokers
Average Cost for a Discount Real Estate Broker: $11,250 for a $250,000 home.
Discount real estate brokers usually charge between 1% and 2.5% commission. The lower the fee, the more likely they are to request an upfront fee for specific services like listing on an MLS, providing necessary documents like disclosures, or even taking property pictures. Then, when your home sells, they take their percentage from the sale, similar to a traditional agent.
Like traditional agents, discount real estate brokers are full-service agents.
Besides only taking between 1% and 2.5% of the transaction, discount real estate brokers also have another benefit: many of them are state or nationwide, saving you the hassle of trying to find a low commission agent. Philadelphia-based Houwzer is an excellent example of a nationwide discount broker. They charge a $5,000 upfront fee, and you have to pay 2.5% to the buyer’s agent at closing. ISoldMyHouse.com and 1PercentLists are other formidable options.
All of these options work with local full-service real estate agents, saving you the trouble of having to find a realtor willing to negotiate on their commission.
Low Commission Real Estate Agents
Average Cost for a Low Commission Real Estate Agent: $10,000 for a $250,000 home.
Low commission real estate agents are often confused with discount real estate brokers, but there’s one difference: duration.
Low commission real estate agents may only offer their lower rates temporarily. This could be because they recently got their real estate license and are trying to get their first clients, or it could be because the housing market is experiencing a seller’s market.
Nevertheless, their structure isn’t as clear-cut as discount real estate brokers. They do, however, charge substantially less than the “industry standard,” often accepting as little as 1.5%. These agents are also less likely to ask for any upfront fee as they work similarly to regular full-service agents.
To find a low-commission real estate agent, your best bet is to ask someone for a recommendation if you don’t want to deal with an inexperienced agent.
You may also find one on social media or search engines since there aren’t any nationwide directories. Of course, you could also ask a traditional real estate agent if they are willing to reduce their commission. Voila! A low commission real estate agent.
Flat Fee Real Estate Brokers
Average Cost for a Flat Fee Real Estate Broker: $500 for a $250,000 home.
If you still think the 1% to 2.5% is high, you’ll be pleased to know flat fee brokers take commissions out of the equation. These brokers charge a predetermined fee to list your property on the MLS.
Unlike low commission real estate agents or discount real estate brokers, flat fee brokers don’t offer full-service assistance.
Instead, you will be required to take the property pictures and oversee the viewing yourself. But, most flat fee brokerages do offer services like viewing and professional property photographs at an additional nominal cost.
Using a flat fee broker also means you get control of the process while getting documentation like disclosure agreements as part of your package.
The best part about flat fee real estate brokers is that many cost less than $500 for a host of value-added services and, like discount real estate brokers, they operate state and nationwide.
Houzeo is one of the best flat fee MLS companies and also the preferred nationwide provider, giving sellers access to a suite of tools that digitize selling and allow them to get offers directly from buyers.
You can check out Houzeo reviews for more information.
Florida-based Beycome is also a fantastic choice for sellers in Georgia, Florida, Illinois, Minnesota, Alabama, North Carolina, and South Carolina.
Alternative to Flat Fee Services
If you want more than just an MLS listing but still don’t want to give a full commission of 3%, then you can opt for a Low Commission or a flat rate company/service.
List With Clever
Clever real estate offers its services either for a 1% commission or a $3,000 flat rate (whichever is higher). They connect you with an agent whom they claim helps you throughout the process.
You might want to check out Clever Real Estate reviews before you opt for their services.
Before you agree to the “industry standard” 6% commission your traditional real estate agent has quoted, know that there are plenty of capable and cost-effective alternatives available.