Discount real estate agents are a common choice in today’s hot real estate market, and for good reason. They provide major cost savings to the homeowner, offering to list the house for less than the standard 3% listing commission.
But are the cost savings worth it, and are there any downsides to using a discount real estate agent? After all, the seller is ultimately paying the agent, and you want to get your money’s worth.
Consider the following points that can help you decide if a discount realtor will give you the best bang for your buck.
Pro: Save Big on Real Estate Agent Commissions
One of the biggest reasons why home sellers choose a discount real estate agent is the lower commission rate they have to pay. Instead of paying the typical 3%, discount agents may agree to sell the home for as little as 1%.
For example, the national median home value is $226,000, which would typically result in $13,560 in real estate agent commissions (the buyer’s agent and seller’s agent would each earn about $6,780). But with a discount agent, the homeowner would only pay about $9,040 in commission fees ($2,260 to the listing agent and $6,780 to the buyer’s agent), saving them $4,520 in the deal.
Real estate agent commissions are one of the biggest expenses of selling a house. Homeowners can keep more of their profit by using a discount agent. Or, if you need to drop the price on your home to secure the sale, you won’t be losing as much money since you’re saving on commissions.
Pro: Discount Agents Provide the Same Services
One of the biggest hesitations that home sellers have about using a discount agent is the level of service they receive. You get what you pay for in most cases, so this fear is mostly valid.
The good news is that reputable discount real estate agents will still give you the same attention and service as you’d expect from a traditional brokerage. Things like home staging advice, professional photography, a yard sign, marketing, and assistance with the closing process are all part of the package.
However, it’s always prudent to ask your real estate agent what exactly you can expect before you partner with them. Tell them your concerns and what you need from them so you can begin the relationship on a strong note. If you’re not satisfied with their service, you may be within your rights to fire them and start fresh with someone else.
Con: Discount Doesn’t Apply to the Buyer’s Agent
One thing to keep in mind about using a discount agent is that the discount only applies to the seller’s agent UNLESS the buyer is also using a discount agent.
In a standard real estate transaction, the seller will pay roughly 6% commission to be split between the seller’s agent and the buyer’s agent. When the seller uses a discount agent, the total commission drops to 4%.
When you see companies that advertise a 1% listing fee, that doesn’t mean you’re saving 5% in commissions. In a perfect world, the buyer will also use a discount agent, which means you’d be paying roughly 2% instead of 6% to sell your home, but that’s rarely the case.
What Makes Clever a Better Choice
If you’re selling your home and want to save money without sacrifice, consider the advantages of Clever.
Clever Partner Agents are full-service real estate agents from some of the biggest names in real estate. They’re experts in their local markets and provide all the same services as a traditional agent. The only difference is that they work for a flat-rate commission, giving you an easy way to keep more of your profits in your pocket.
Connect with Clever today and let us introduce you to an experienced discount real estate agent in your local market who can help you get an optimal outcome and save thousands in the process.