Using a discount broker to sell your home - penny foolish?
Should you use a discount broker to sell your home?
Competition is usually good for consumers but it has its limits of effectiveness. The rise in the number of discount agents has been directly proportional to the rise in home prices and the speed with which homes have been selling. Rising prices and ease of marketing made discounting more affordable for companies. If it costs less to sell a home, why not pass the savings on to your clients and use those savings to draw new clients by advertising discounts?
The playing field has changed once again.
Homes are no longer selling quickly and prices are no longer rocketing through the roof. Profits per homes sold are diminishing. Discount brokers are beginning to feel the squeeze.
Homes that once sold in days are now taking weeks and months. In order to sell a home now, real estate companies are competing for shrinking number of buyers and huge numbers of new agents. It is becoming much more expensive to market homes and get them sold.
I have a simple suggestion for you as a home seller. Commissions are negotiable. Find the best company and then negotiate the commission. Some homes are easier to sell than others. Some homes have a higher probability to be profitable for the agency you select. Realize that, to get the results you want, the company you work with will need to have some commission flexibility.
Am I suggesting avoiding every discount broker? Not at all - but I am suggesting that you can negotiate commissions with companies with whom you are comfortable - regardless of whether or not those companies are full-service, full commission companies or limited service, discount commission companies. Find a company that you like and work with them on the commissions.
The company you choose should have a good idea of how much it will cost to market your specific home. They should know your market. They should know how much homes are selling for and how fast in your part of town and in your neighborhood. They should have a good idea about how much it will cost them in order to do a good job marketing your home. Because they can estimate their costs of doing business, they should be in a great position to work with you to determine a fair commission to get the results that you want.
Avoid being distracted by advertised commissions. There is so much more that you need to consider.
In making a decision about whether or not to use a discount broker, think about the bottom line. When it comes to selecting someone to help you sell your home, the commission you pay to an effective real estate company could look very small in comparison to the cost of an ineffective marketing campaign or poor negotiations.