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Discount On-Line Brokerage Service?
Recently a few new services have appeared on the web promising sellers low-cost alternatives to full-service local real estate brokers like Century 21 Showcase, REALTORS®.
A recent one I came across suggested that instead of the seller paying the industry common 6%, typically split 50/50 between the listing and seller brokerages, that they would offer a complete on-line transaction and only take 1%, while offering the selling brokerage 3.5%. This would equate to a savings of 1.5% for the seller using their calculations.
During the transaction you'd never actually meet your agent as the seller; they would only be available via email or on-line. In person meetings cost extra and showing your property to a prospect would cost extra as well. From the information I read, although they state you'll be assigned a licensed agent, I'm not sure the agent would even see your home or property.
Selling and buying real estate for most of us is a very large decision and while I love services such as amazon and ebay for selling and buying things these are usually commodity items; produced in a factory with many copies. Each home or property is unique, even condominium units are typically personalized by their owners over time.
Selling and buying real estate is a boots on the ground operation. Local real estate agents have an in depth knowledge of your area. They have walked through and inspected many homes. They can offer valuable insight on how to get the most value for your sale and also sit with you and explain the multitude of contract, disclosure, and inspection issues one on one.
When dealing with what is potentially your largest investment it may seem that a 1.5% savings is significant, but a full-service broker can bring more than that in value by representing you and your home personally through the complete process including marketing, negotiations, and closing.
Lastly, what these online services sometimes fail to mention in their calculations is that brokerage fees are negotiable and while 6% is fairly common it doesn't mean that you can't get full-service for less. Each agent or brokerage typically has a floor on their price where they can afford to provide services, but make sure you ask.
The savings claimed by using on-line or other discount services are transitory at best. Local, on the ground, representation can give you a stronger position selling your home with community marketing, personal negotiation, and awareness of both State and local disclosure laws and regulations can more than make up the difference in the savings imagined and provide you better service as well.