Friday, December 2, 2022

Full Service vs Flat Fee Realtors

If you are a home seller who likes to do a lot of research before making any major decisions, Full Service vs Flat chances are that you might have landed on terms like full-service agents and flat-fee realtors. 

It is only natural to be concerned about the costs pertaining to selling your home and the package of services that come with that cost. Full Service vs Flat This article will help you understand the difference between a full-service realtor and a flat fee realtor.

Also read: The Ultimate Tips For Passing The Real Estate Exam!

Who is a full-service realtor?

Working with a full-service realtor means partnering with a traditional brokerage firm, Full Service vs Flat which usually charges a commission of 5-6%. Such an agent handles the complete process of the home sale. 

When you sell your property with such a realtor, they will help you navigate through the entire sale, right from listing your property to the day you close the sale. These services include a professional home valuation, advice on how to stage your house, advertising your property on the local multiple listing service, managing open houses, negotiating with buyers, and assisting with the paperwork.

All such services, and more, resulting in more attention from buyers, which raises the chances of your home selling fast and for a good amount. 

What is a flat fee or discount realtor?

The majority of the discount realtors focus on providing low commission rates to home sellers. Many such companies provide built-in commission savings of 20-30% more than a traditional real estate agent.

Some discount services follow pricing structures and service models that form real value for their clients. 

For instance, Clever Real Estate creates savings by solving a major issue for traditional agents i.e. producing a steady volume of business. 

Even the top traditional real estate agents spend a lot on marketing and promotion. But, with Clever, they can meet new clients with an almost negligible upfront cost. According to Clever Real Estate reviews, these savings are passed on to the customer in form of a lower commission. 

Other discount brokers are revamping the traditional brokerage experience. Rather than matching sellers with agents at traditional firms, companies like Houwzer and Redfin have their own agents.

Then there are flat-fee MLS listing services, which help you list on your local MLS – the main directory of homes for sale used by all realtors – for a flat fee. They allow you to avoid paying the listing agent’s commission altogether. With a flat fee realtor, you will be acting as your own agent. If your house is in a hot market, you can end up with a lot in your pocket if you use the services of such a company.

There are many for sale by owner websites too that help you save a ton on real estate agent commissions. These for sale by owner websites let you become your own agent. While this is usually easier said than done as most FSBO sellers sell for less than homes listed with a realtor. Nonetheless, if you pull it off, you can end up saving thousands. 

To provide discounted rates and still make money, these discount services have to find ways to operate more optimally than a conventional brokerage. Little wonder, some tactics are more successful than others. 

When going for a discount realtor, you should understand the manner in which that company is creating savings for you and the risks associated.

Commission breakdown

Here is a breakdown of the commission a seller will have to pay with a traditional real estate company and a discount brokerage.

Traditional realtor commission

Fee Rate
Listing fee 2.7%
Buyer’s agent fee 2.7%
Total commission 5.45%

 

Discount realtor commission

Fee Rate
Discounted listing fee 1.5%
Buyer’s agent fee 2.7%
Total commission 4.2%

 

As evident, most discount realtors provide savings on the listing fee side of the spectrum. 

Pros of flat-fee realtors

  1. Getting an entry into the local MLS with the help of a flat fee service will typically cost you in the range of $300 to $600. Given the 5-6% commission charged by traditional brokerages, this can look like a huge bargain. Some entry-only firms usually offer extra services like marketing and home photography.
  2. You get complete control over the entire sale process. You decide the price, the showings, and the negotiations. 

Cons of flat-fee realtors

  1. Homes selling without an agent sell for less as compared to full-service realtors. The difference could be so huge for some sellers that they may eventually lose more by way of a lower sale price than they would have shelled out in commissions.
  2. Even if you are selling in a hot market, selling a house through flat-fee realtors is not an easy process. You will have to put in a lot of energy and time to ensure everything goes smoothly and the sale does not fall flat. 
  3. You could end up in legal troubles that would not happen when using the services of a full-service agent.
  4. People also read: Using Real Money Virtual Casino in Finland

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