Barry Kunselman | 303.887.0588 | Contact Barry

Can A Discount Broker Really Save You Money?

Commission. Some see it as a dirty word, but when it comes right down to it, it’s the way your real estate agent earns their living. And it’s the incentive they have to do the best job to get your home sold—or next home purchased—with as much efficiency and for the best price possible. Don’t discount the importance of a great real estate agent.

Why discount brokers could end up costing you more in the long run

Discount brokers—those who offer up their limited services at a reduced percentage or flat rate—have been popping up at a more rapid rate with the housing market boom. They promise the same, or even better, services at a lower rate than their traditional competitors. But when it comes to discount brokers, there are several reasons why it should be buyer—or seller—beware. Here are some things to think about before you hire your next agent.

1. ATTENTION: This is one of the biggest and most important transactions you’ll make in your life, and you deserve the one-on-one attention and dedication a traditional agent offers. Discount brokers have to handle more deals to earn a living, which means they have less time to dedicate to you and your home.

2. AVAILABILITY: Deals happen at all hours of the day. Traditional brokers often work nights and weekends to ensure their clients are being served at the highest level. But discount brokerage firms typically run from 9am - 5pm, putting their schedules above your convenience.

3. EXPERIENCE: Traditional brokerages predominantly consist of seasoned agents with years of experience. That’s compared to discount brokers who tend to be less seasoned, without the essential market and contract knowledge to ensure you get the best deal possible. In fact, a traditional broker will likely get you a better price than a discount broker will be able to—which means they could bargain away more than the difference in commission is worth!

4. REPRESENTATION: You might have heard that discount brokers are now offering the “transparency” of letting buyers and sellers work directly with each other. Don’t be fooled! That simply means you don’t have the professional representation you’re paying for. A real estate agent’s full-time job is to act on behalf of their client, finding properties they might not be able to access on their own, negotiating contract details, and serving as a liaison between buyers and sellers to ensure their client makes it to closing table with a deal they can be happy with.

5. SUPPORT: Overall, the main difference between discount brokers and traditional agents is the level of support you’ll be able to expect. A traditional realtor will earn their commission through:

  • Tracking down homes that meet specific and demanding criteria, getting in touch with sellers’ agents and making appointments to see homes.
  • Pricing a home correctly, by knowing the market and comparing all other houses in the area.
  • Preparing a home for sale by properly staging it and taking professional photos for marketing purposes.
  • Using advanced marketing techniques, including online advertising, print collateral and essential networking with other traditional brokerages.
  • Access to the MLS—this vital tool in buying or selling your house is often not availableat a discount brokerage firm.
  • Hosting open houses, broker opens, and showings, and gathering timely feedback on a listing.
  • Negotiating the details of a contract to ensure you get exactly what you want out of your transaction.

See how a discount broker might actually cost you money: 

Discount Broker downsides chart

Denver Metro Home Sellers

Discount brokers imply that you will net more money because you are paying less commission. A traditional full service broker implies that you will net MORE, even after paying a higher commission, because of their expertise and knowledge. 

The bottom line is, traditional brokerages simply bring more to the table. And when you choose a PorchLight agent (me), you get even more service, support and dedication. Buying or selling a home is a big deal. Don’t make a mistake by outsourcing it to the lowest bidder.

Barry Kunselman | 303.887.0588 | barry@porchlightgroup.com

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