The Scoop on Discounted Real Estate Agents: Are They Any Good?
Discount agents are a recent new trend in the real estate world. They offer services to both buyers and sellers at a discounted commission rate. They use many different commission models to offer their clients less expensive real estate transactions.
Some offer cheaper-than-average commission, some offer to put a percentage of their commission back into closing costs, some offer reduced services for reduced fees, and some offer flat fee listing policies.
The Upside to Discount Real Estate Agents
The main boon that comes with hiring a low commission real estate agent is obvious: it’ll cost you less. Sellers frequently cover the commission costs, so an agent that charges a lower rate than the average will obviously save you a significant amount of money if you’re selling your home.
Discount agents also manage to wrack up a lot more experience in a shorter time working in real estate than an ‘average’ agent would. This is because they take on more clients due to lower commissions. Their no-nonsense approach means that they have lots of experience in getting deals done with as little fuss as possible.
The Potential Pitfalls of Discount Realtors
When an agent makes less per transaction, often only charging a discounted commission of 1%, they’ve got to complete many more transactions in order to make a living. While this means that they have plenty of experience getting to closing (since they complete approximately three times as many transactions as a regular agent to make the same amount of money), it may also mean that they have less time to offer each client. Taking a few days to receive a response is expected. That could potentially hold up or even ruin your opportunity at a sale.
You’re likely to get a less personal experience due to the volume that low commissions agents take on. They just don’t have the time (or the budget) to add the cutesy little touches like champagne and flowers at closing that more traditional agents often offer their clients. Hand-holding probably isn’t going to happen, either.
So, Are They Any Good?
The fact is every licensed real estate agent is legally obligated to provide you with a certain level of service. They are required to put your interests first, do as you’ve asked them to do, provide you with pertinent information they may have, and they handle the paperwork required when you buy or sell a home. Whether they’re working at full commission per your area or they’re giving you a discounted rate, they must do those things.
With that in mind, whether a discount agent is good at their job has less to do with how much commission they charge and more to do with their individual acumen in the industry. Some discount agents are great, some not so much; some ‘regular’ agents are great, some not so much.
Is a Low Commission Real Estate Agent Right for You?
If you’re hoping that your real estate agent will offer a warm and cozy experience that guides you along the pathway to either buying or selling, you may be barking up the wrong tree. If your priority in hiring a real estate agent is that you pay less commission at closing or you won’t need much guidance in your real estate transaction, then a discount agent might be right for you.
Hiring a real estate agent is a decision you shouldn’t take lightly. It’s ideal to interview at least a few agents and see if you can garner some references from past clients to help decide if it’s a good fit. You can see if a traditional agent would be willing to negotiate their commission percentage (and the services rendered) so that it’s more in line with your budget. Hire the agent that seems like they’re best equipped to handle your particular needs at the best rate possible.
It’s important to keep in mind that hiring a cheap agent isn’t the only way to save money on your real estate transaction if that’s the reason behind your considering this option. A cash or as-is sale with a property price set appropriately for such a scenario is another way you can save.