Tag: Discount Realtor

This poses an interesting question so let’s take a look at how a discount realtor is actually very similar to a full-service realtor.

Full-Service Realtor

A full-service realtor will usually provide a free market evaluation to determine the appropriate selling price. Once that is established, they’ll:

• list your home on the MLS ® system;
• arrange for showing your home to potential buyers and their agents;
• prepare (or receive) any offers to present to you;
• promote your home on their own website as well as the MLS ® system;
• provide guidance throughout the selling process; and
• provide conveyancing services to bring the sale to completion.

While this list is not exhaustive, it generally describes the selling process. Depending on your agent, they may also offer referrals to other industry experts such as mortgage professionals, home inspectors, and lawyers.

Discount Realtor

A discount realtor provides most, if not all, of the same services but at a lower commission rate. Rather than using the industry standard of 7% of the first $100,000 and 2.5 or 3% of the balance, a discount realtor uses a lower fee structure which allows the seller to save potentially thousands of dollars of commission payouts to use for any other purpose they want.

Some discount brokerages offer a straight 1 or 2% commission. The downside to this is the buyer’s agent doesn’t get their “usual” fee and may not be overly enthusiastic about showing a home listed this way.

Flat Fee Commission

A flat fee discount realtor does things a bit differently. While the buyers’ agent will receive their normal, full commission for bringing a buyer, the seller’s realtor takes a discounted commission by reducing their fee to a fixed dollar amount. This means you won’t lose any buyers because those agents don’t want to take a lower commission and the seller still receives all of the same services as if they had used a full-service realtor.

Some discount brokerages also offer packages that allow you to sell your home on your own, with only certain services being provided by the brokerage. These services may include:

• Listing your home on the MLS ® system;
• Forwarding potential buyers to you;
• Promoting the home on their website and other internet websites; and
• Forwarding title of your property.

The fee for this type of service is usually a flat fee for the service of the discount brokerage, plus the normal commission due to the buyer’s agent. This type of sale can be time-consuming for the seller and if the seller is not experienced in buying or selling homes, there can be pitfalls to trying to sell the home privately.

Either way, the seller ends up saving a significant amount of money by using a discount brokerage.

Education and Training

Discount realtor brokerages have highly trained, educated, and experienced agents in the exact same way and to the same high standard as agents at traditional brokerages. The governing body for the real estate industry requires all agents to undergo the same training and education to ensure the best professionals are representing the public, regardless of the type of brokerage they represent.

Using a discount brokerage doesn’t mean you have to sacrifice experience, training, or knowledge. Many discount realtors are in the top percent of the real estate industry and are high achievers with excellent skills and awareness of the market conditions. With any transaction of this size, always ask your potential realtor for references, and don’t be afraid to check them out before making a commitment.

Just as not all traditional, full-service, real estate brokerages are the same, neither are discount brokerages. And while discount brokerages may have some negative misconceptions surrounding them, here’s why hiring a real estate agent from a discount brokerage can be a great idea:

Top Performing Realtors

Most realtors, whether they work at a traditional, full-service brokerage or at a discount brokerage, work hard to become the top of their field. The services they can provide are exactly the same and include some of the following:

• They’ll do a free market evaluation to assess the value of your home and determine what they believe the home will sell for.
• They’ll list your home on the MLS ® system to maximize exposure to thousands of potential buyers.
• They’ll prepare the paperwork, receive offers from other Buyer agents and present them to you for consideration.
• They’ll walk you through the process and answer any questions you may have.
• Many can refer you to ancillary professionals such as lawyers, home inspectors or mortgage professionals.
• They’ll work with you throughout the closing and conveyancing of the property to ensure a smooth transition.

They Have The Same Mandates

Your real estate agent has to follow the same set of rules and ethics regardless of what type of brokerage they work with. All real estate professionals are governed by the same body – the BC Financial Services Authority (BCFSA) and the high standards of conduct are consistent across the board.

Loyalty to their clients is of the utmost importance and they are required to maintain your confidentiality at all times – even after the sale or purchase of your home is complete.

Your real estate agent will, and must, follow all of your lawful instructions regardless of whether or not they agree with them.

Your real estate agent has your best interest in mind at all times. They will provide input, guidance, and recommendations to assist you in making the best, biggest decision you’ll likely ever make.

The education and training real estate professionals receive are exactly the same across the province. Where they work doesn’t change the requirements of the real estate Rules and Regulations so you can be assured that a realtor working with a discount brokerage is trained to the same high level as at a traditional brokerage.

Where They Differ

The difference between the two types of brokerages comes down to a financial one. At a discount brokerage, you can receive the same high level of service as at another brokerage, but at a much lower rate of commission.

Discount brokerages can save the seller thousands of dollars by reducing the amount of commission they take. This could be based on a percentage, or as a flat fee but either way, the seller will have some extra money in their pocket at the end of the transaction to use for any other purpose they choose.

Some discount brokerages also offer incentives to buyers. Since the buyer’s agent will receive their “normal” commission, they may offer a cashback percentage to the buyer as an incentive to hire the brokerage. This could be as much as 25 or 50% of the buyer agents’ commission depending on the level of service required from them.

Whichever way you decide to go, always do your homework, research the agent and company you are considering, and don’t be afraid to ask questions or read the fine print. You may just decide a discount brokerage is right for you.

Real estate prices continue to soar and with that, traditional commissions being paid to the real estate professionals involved with the purchase or sale of a home continue to rise. If you are the seller, this means your costs increase exponentially depending on the price your home sells for.

Hiring a discount real estate brokerage to sell your home might just be the answer you are looking for. But how does it work? And why should you consider it?

Discount Brokerages Can Save You Thousands Of Dollars

The most obvious reason to use a discount brokerage is to save money when you sell your home. Some brokerages offer a one or two-percent commission structure, while others offer different packages which allow you to select how many services you want the real estate professional to provide. This type of brokerage can still provide all of the services you need, but at a discounted price.

Discount Brokerages Provide All The Same Services As Higher Priced Brokerages

Don’t be fooled into thinking a discount brokerage provides less service or lower quality services than a traditional brokerage. Real Estate professionals at discount brokerages still undergo the same level of education and training as those at higher-priced brokerages. And, they still provide the valuable experience and knowledge needed when selling the biggest asset many people will ever own. Education is ongoing as required by the governing BC Financial Services Authority so each agent is fully up to date on changes to the rules and requirements of providing real estate services to you.

Discount Brokerages Use the MLS/Realtor System

Although the listing fees are lower with a discount realtor, homes still receive the same level of exposure on the MLS ® listing system used across Canada. This means your home can be viewed by countless potential buyers at a reduced rate.

Some Discount Brokerages Still Pay The Traditional Commission To the Buyers Agent

Depending on the brokerage, the buyer’s Agent may still receive their “full” commission. Reducing the Buyers Agent commission discourages agents from bringing their buyer clients to view your home because the financial incentive is no longer there. By keeping the Buyers Agent portion of the commission the same as at a traditional brokerage, the potential buyer’s pool remains large and widespread.

Buyers Can Get Cash Back From A Discount Real Estate Brokerage

Again, depending on the brokerage, a buyer may be able to receive a portion of the agent’s commission back as an incentive. This can help with closing costs, moving expenses, or even new furniture. The level of cash you receive will depend on the services provided and can be 25% or 50% of the commission paid to the buyer’s agent. If for example, your buyer’s Agent received $10,000 on the purchase of your new home, you could receive either $2,500 or $5,000 as a tax-free incentive to be used for whatever you want.

Discount Realtors and Brokerages offer all of the same services as a traditional brokerage while saving sellers thousands of dollars which can be used to offset other costs associated with moving.  As with any Real Estate Agent, ask for references and do your homework to ensure you are getting the services you want, at a price you are satisfied with.