Understanding Discount and Flat Fee Real Estate Brokerages
What is a discount real estate broker? Discount real estate brokers are licensed real estate agents who operate for a discount instead of a traditional, full commission. Although it’s important to understand that there is NO “standard commission”, real estate commissions have stayed pretty consistent at five and a half to six percent of the home’s sales price. Instead of charging you the typical commission of 3% of the final sales price going to the listing agent, they will work for less, like a 2% or even a 1% fee. In addition, some discount real estate brokers will list a home for a flat fee as opposed to a percentage of the sales price.
Two Sides of a Real Estate Transaction
Many home sellers are not aware that there are two sides of a real estate transaction – both with an allotted amount of commission being offered. There is the listing side, which pays the listing agent. There is also a percentage of the sales price offered to the real estate agent that brings the buyer. These real estate commissions are set when the home is listed for sale.
From the discount real estate broker’s position, they can “discount” either the listing side or the buyers side — or both. In previous days, most discount agents would offer to list a home for a small percentage or a flat fee and offer very little to the buyer’s side. This can put the listed home in a position where some buyers agents don’t want to show or recommend that property as they make less money. Although offering a discount on the sellers side of the commission, we recommend offering a competitive commission on the buyers side to insure that other Realtors are incentivized to show your home.
Modern Discount Realty Services
The modern discount broker now offers options for both sellers and home buyers. As an example, Only Pay for What You Need Real Estate offers multiple flat fee pricing options for selling a home as well as buying.
Seller Side Pricing
If you are selling a home in or around Falls Church VA, you have many options for selling your home at a discounted rate. You can choose multiple flat fee options all the way up to listing your home for 1.5% of the sales price. Below are the options for listing your home for a flat fee:
- The Minimum – $750
- Just The Basics – $1500
- We’re Getting Serious – $2000
Each option adds additional real estate services, but all of them include having your home listed in the local MLS and available to all of the agents in the local Realtor Board.
Buyers Side Pricing
Only Pay For What You Need Real Estate also offers multiple options for the homebuyer. This lets homebuyers leverage the knowledge of a Local Falls Church Realtor while purchasing a home that is not listed in the MLS including homes being sold For Sale by Owner (FSBO). Below are the buyers side options:
- You Found The House – Ready To Offer – .5% of the homes selling price
- Found The House – Not Sure What’s Next – 1% of the homes selling price
- Need Help Looking At Properties – 1.5% of the homes selling price
- Need Help Finding The Right Property – 2% of the homes selling price
Lastly if you are a home builder or real estate investor, Only Pay for What You Need Real Estate also offers special pricing for real estate investors and home builders.
Dual Agency is when the agent or broker that has listed the home is the same agent that brings the buyer. In this instance, the Dual Agent would receive both the buyers side and the listing side of the commission. Some homebuyers are under the impression that if they call the “listing agent” that they will get a better deal. This is not always the case.
When acting as a dual agent in real estate, the Realtor in the middle can not reveal personal or otherwise confidential information. Meaning when you are writing an offer, they cannot let you know what the lowest price the seller will take. On the other hand, they cannot reveal to the seller, how much a potential buyer is willing to pay. While some states do not allow dual agency, most states simply require additional disclosures and treat all parties equally.
There are several different types of discount Realtors. Some of the newer discount models are focusing on the listing side while providing ample commission to the traditional real estate agents on the buyer side of the transaction. Each of these types of discount brokers offer a slightly different take on the discount real estate model but all of them typically focus on discounting the real estate commission.
If you are considering selling a home, understand that Realtor commissions are not set in stone. Different Realtors will charge different prices with different pay structures (think percentage of sales price or flat fee). In order to get the best deal possible, and the unique services you need, you should shop around and find the one that will best suit your needs and your budget.