Discount vs. Full Service Realtor: What's The Difference?

Clever Real Estate


Clever Real Estate

December 1st, 2020
Updated December 1st, 2020


Discount vs. Full Service Realtor: What’s The Difference?

When listing your house, do you choose a full-service realtor or a discount realtor? What's the difference between a full-service realtor and a discount realtor? Read on to find out.

What's the difference between a full-service realtor and a discount realtor?

Seller's have a lot on their plate they've got to prep their belongings to move out and ready their house for potential buyers to walk through. If they're using an agent they need to find one who will do what they need without cutting into their profit too much. If they're not using an agent they've got marketing, negotiations and contracts to worry about.

As they consider costs, a good meet-in-the-middle strategy seems to be going with a discount agent who advertises themselves as doing most of the same things as a full-service agent but at a smaller commission rate. Is it really a good rate though?

Many discount agencies claim that any monkey can list your house on the MLS. While that may be true, the MLS is responsible for helping thousands of potential buyers view your home. Any Joe can put a sign outside a cafe, but if you want people to come to your cafe, wouldn't you want a marketer who can make the right sign?

Discount Realtors

Discount agencies offer partial services at a discounted rate. Many of these services include listing your home on the MLS, giving you a sign to use, and maybe a few other things such as a half hour of customer support.

Look out for discount realtors that promise to list your home, but do so without images or a description. Because the MLS feeds major home search databases like Realtor and Zillow, having images and a description highlighting the house is key to selling your house for a good price. If you decide to go with a discount realtor, make sure you ask if there are pictures included and if there are edits involved with the listing.

Don't compromise your home selling experience.

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Beyond simply sticking your house on a website, discount realtors will often price your home as well. As they are working for a discounted rate, many don't put in the time and effort to properly price your home. Mis-priced homes lead to price drops and which leads to selling your home for way less than you originally hoped for.

A good way to circumvent dropping your price multiple times is to ask your realtor for a list of previous house sales with the amount of price drops per transaction.

Full-Service Realtors

Full-service realtors are often more involved in the sale of your house.

A good full-service realtor will come to your house, tour it, and listen to you talk about any problems or renovations you've been through while living in it. They'll use that information as well as any information about sales of similar homes in the area to price your home.

By doing their homework in advance, your realtor eliminates any unnecessary price drops.

Your full-service realtor will also either take photos of the house themselves or hire a professional photographer to do it for them. Professional photos highlight the areas of the house that buyers love to see, such as the view of the mountain from the living room, the length of the hallways, and the sheen of the granite countertops. Pictures like that sell a house.

Beyond the listing, full-service realtors will be the conduit between you and any buyers in the area. If a buyer has a question on the house, rather than you getting a call while you're in an important meeting or taking Jimmy to practice, your realtor will be the one to answer it for you.

Your realtor will also negotiate pricing (with your approval along the way), schedule open houses, and actively market your home on the web, and even though more conventional methods-- like local magazines.

Full-service realtors typically specialize in certain markets. While a discount realtor may take on anyone who comes their way, a full-service realtor prefers a certain type. Realtors specializing in luxury homes wouldn't be well-suited to sell your $140,000 rambler, for example. You want the right type of realtor for your house to sell at a good price quickly.

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What's the difference in cost?

A full-service realtor typically costs you anywhere between 2.5-3% of your final sale price. This can be quite pricey, especially when you realize it's cutting into your profits.

Some full-service realtors (like those at Clever) charge a flat-rate fee. Clever's fee, for example, is $3,000 or 1% for houses that sell for more than $350,000. Flat-fee realtors still do everything a typical full-service realtor does, but for a lesser cost.

How do flat-fee realtors do the same amount of work for a portion of the price a typical agent costs? It's because they get more volume of sales coming in from the brokerage. Clever Real Estate acts as a marketing agency for local expert realtors and in return, the agents agree to render their services for less.

Discount realtors either wrap up their costs into the closing costs of your buyers (who could turn around and have you pay for it) or charge anywhere from a few hundred dollars (for listing alone) to 2% commission.

The difference in cost isn't only what you pay up front, however. The realtor you use could ultimately determine the amount you make on the sale of your house, which could add up to hundreds of thousands of dollars. When it comes to that, wouldn't you rather pay an agent to do it right?

The Bottom Line

You should do your due diligence and vet out your realtor before you use them. Ask for their price drop rate and for the services they provide. Make sure you have the ability to change the listing if you desire, and have marketing in place that will get your house sold.

While the amount you make on the front-end is important, consider who will help you save-- or net-- more money overall. Do the math and interview your agents, and you'll do just fine.

Need a top full-service agent to list your home for a lower flat-rate? You need Clever.

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