After you’ve made the decision to sell your home with an agent, you still have another choice to make: hiring a full-service real estate agent or hiring a discount real estate agent. But what sets full-service and discount real estate agents apart? Each has their pros and cons, each brings different skills and services to the table, and each will charge you a different amount for their service.
Before diving into our comparisons, it’s a good idea to brush up on how traditional real estate commissions work, because it’s how full-service agents are paid, and breaking from this model is how “discount” services were born.
Here’s a quick 101 on the subject of real estate commissions:
Real Estate Agent Commissions
Real estate agents earn their money after the home sells. The party who lists the home for sale pays commissions on both sides after the sale closes. Traditionally, the listing agent has earned 3%, with another 3% going to the buyer’s agent for a total of 6% of the sales price. But, that’s not always the case and the numbers are negotiable.
Commissions are still standard practice in a majority of real estate deals, but thanks to advances in technology, there are more options to sell a home and conduct real estate business.
Full-service Real Estate Agents vs. Discount Agents
Professional real estate agents are synonymous with property buying and selling. Agents have been helping their clients buy and sell homes for over a hundred years. But, not all agents are the same, cost the same, or offer the same range of services.
Discount agents and brokerages give home sellers more options and more control when it comes to how the home is sold and how the agent is paid.
That’s why it’s important to understand the differences, know what services you need to sell your property, and come to terms with how much you’re willing to pay when it comes to commissions.
What Is A Full-service Real Estate Agent?
Full-service real estate agents take part in and oversee the entire transaction, from start to finish. They lead their clients through each step of the process, answering every question, and explaining every detail in plain English.
This “full-service” treatment gives their clients peace of mind and makes them feel confident. As a trusted advisor, full-service agents make themselves available all hours, and weekends are most likely their busiest work times.
Full-service Agents Provide Many Services
Here’s an example of what full-service agents take care of:
- Provide options and advice when it comes to decision-making.
- Apply up-to-date tools and data, as well as their local insight and knowledge, to accurately price your home.
- Bring qualified buyers to your home by expertly marketing and promoting the property.
- List the property on the MLS and apply other digital and traditional marketing tactics.
- Recommend personal references and resources for inspectors, handymen, landscapers, escrow, title, loans, etc.
- Guide you through the legalese and stacks of paperwork.
Last but not least, real estate agents negotiate on your behalf, work through counteroffers, and ultimately get you the most money for your home.
While agents catch a lot of grief about how much they actually do for their slice of the commission pie, in reality, they do quite a lot and they do it for more than one client at a time!
What is a Discount Real Estate Agent?
Full-service implies that everything is taken care of and that the client will have every last detail attended to. Discount usually implies that you are paying less, but you are also probably losing something in the process as well. So how does this apply to real estate agents?
A “discount” real estate agent or brokerage will help you sell your home, but they are compensated in a different way than the traditional 6% commission model. They offer a discount by taking less than the usual commission (or none at all), which leaves the seller with more money in their pocket.
As the name implies, discount agents charge less to sell your home. What you save in commission fees by using a discount agent, translates into receiving fewer services, which you have to tackle yourself. Some of those things might include giving home tours, open houses, taking phone calls, calling leads back, etc.
Discount Breakdown
The discount that “discount” agents offer comes in one of three ways:
- A flat fee.
- A discounted percentage of the sale (.07% vs. 3%, or 1% vs. 2.5%).
- A flat fee or a percentage, coupled with add-on marketing packages or À la Carte services menu.
For example, let’s say you decide to go with a flat fee service. You agree to pay the fee and what you get for that is clearly spelled out in the contract. You may get a listing on the MLS, some basic photography, flyers, and one open house. Anything above and beyond that is up to you.
Another example is paying a percentage of the sale, and then you add on the extra marketing services you want: perhaps $700 for an MLS listing, $500 for a website and custom photography, $150 for a CMA, etc., depending on the agent’s pricing structure.
Note: do be careful with this À la Carte marketing services approach. The services can really add up quickly, and you can end up paying more than the flat fee, and sometimes more than a full-service commission!
Find the best-personalized options for your home selling needs at Sold.com!
Which Real Estate Agent Is Right For You?
When it comes to choosing a real estate agent, whether it’s a full-service agent and brokerage or a discount agent and brokerage, there’s basically no one-size-fits-all answer. Every factor involved needs to be looked at and weighed appropriately.
Selling a home is most likely the biggest transaction of your life, and full-service real estate agents that work with full-service brokerages are more than capable of getting you top dollar through their knowledge, experience, and marketing savvy.
However, in a seller’s market, a discount agent may be able to get you the exact same results, and you’ll walk away with some savings. Depending on you and your situation, it could be the right call. It’s up to you to figure out how much you want to be involved, and how much that time is worth.
Before Hiring A Real Estate Agent
No matter what you do, before you choose an agent, make sure you:
- See their track record of sales and performance
- Get a referral from a friend or family member
- Meet them in person and meet with more than one
Choose wisely and good luck selling your home!
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