To List or NOT to List with a Discount Agent

Posted By Tiffany Hereda @ Oct 3rd 2014 7:52am In: Selling


In recent years we have seen a trend of “discount brokers”.  You may have come across this as you are interviewing agents for the job of listing your home and wonder why there is a difference in commission rates?

When a Realtor lists your home they usually charge a specific commission rate.  Lets say for example, 6%.  Out of this commission, they typically offer half to the selling agent (in our example, 3%) to bring a buyer and keep the other half for themselves.  There are agents out there that in order to get business, cut their side of the commission and offer you, for example, a 4.5% commission rate.  This sounds good right? Or is the old saying “you get what you pay for” true in real estate as well?


Some questions to consider if you come across this scenario:

  1. Why is one agent willing to work for so much less than most others?
  2. Will your home get the same attention from your agent if they are making less?
  3. How much money and time in marketing will your agent be able to do with a lower fee?
  4. Are they going to be a good negotiator on your behalf?
  5. Why are they discounting their business in the first place?
  6. What commission amount are they offering to the selling agent?


It is important to understand that your agent does not walk away with their entire commission.  First, as mentioned, they will split it with the selling agent.  Plus there are many things that an agent has to pay out of their side of the commission such as splits they have with their firm, taxes, marketing fees, license fees, continuing education fees, etc. 


In our business, we do not discount our services because we are worth what we charge.  We fight for our price just as we will fight to get your price during the transaction.   To us, value is not monetary.  Value is what you are getting out of the service you are paying for.  A valuable agent is one that gets you a competitive price in a realistic timeframe.  A valuable agent communicates with you throughout the process and even after it is over.  A valuable agent spends the time and resources it will take to get your home sold for top dollar.   Real estate is our expertise and that is what you are paying for.   Would you for example, feel as good about hiring a discount surgeon?


What qualities are you looking for in the agent that represents you in one of the largest sales of your life?  Someone that is confident in their worth and charges accordingly or one that feels that they need to discount their services to gain business?  When you find the right agent and they do the right things, it is going to take their time, money and effort to do a great job for you.  

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