Hot Market Has Renewed A Demand For Discount Real Estate Brokers
Discount real estate brokerages promise lower commissions than full-service realtors. The majority of discount real estate brokerages offer full service real estate for a discount on the commission price, often 1-1.5%, or sometimes simply a flat fee rate. When the real estate market begins to tip in favor of sellers, as the current market has done, the demand for discount real estate brokerages rises.
Markets have definitely heated up in recent years and it’s been a seller’s market for some time now thanks to a perfect storm of low housing inventory and low interest rates in many popular markets. Listings are selling quickly again and thus you are seeing more and more discount brokerages sprout up to take advantage of these market conditions.
It doesn't take nearly as much effort to sell a home in a hot market, so discount brokerages offer a significant savings over traditional agents and brokers. When a brokerage offers true full and professional services like this discount columbus real estate broker, significant savings can truly be realized, especially in cases where the brokerage is well established, has substantial experience in a market, and is astute at negotiating both buyer and seller contract situations.
In the traditional real estate brokerage model, the seller pays the listing broker a percentage of the property's selling price, in most cases 6 percent, though that is negotiable. That listing broker usually has a split with the listing agent and also offers out a cooperating broker compensation of up to half the total commission to the buyer’s broker, who then splits that with the buyer’s agent. To any seller, 6 percent can be a lot, and in some cases, may make the the difference between breaking even on your home or being able to pay off the mortgage at closing. In these cases especially, discount brokerages can be very useful.
In a discount real estate broker situation, the seller is likely to only pay 3-4% in commission fees rather than 6%. In traditional brokerage commission situations the seller/buyer agent split will usually go straight down the middle with 3% going to each side. In the discount broker situation, that split is more likely to be something like 1% for the seller, and 2-3% to the buyer. In a case where only a 3% total commission is needed to successfully sell a home in a market, that can be a significant savings, at least have of a traditional commission.
Before you list your property for sale, it's recommended that a seller interview multiple agents, including those at a discount brokerage. If you really like an agent who works at a traditional brokerage but aren’t sure you have enough equity to afford the standard commission, try negotiating. Remember that real estate commissions are always negotiable. If you plan on selling and then buying a new home, find out if the agent will reduce the commission on the sale of the first house if you buy the new house with them as well. There is plenty of money to be saved on commissions, especially in a hot real estate market.
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