“Discount” real estate brokerages were all the rage in the early 2000s when the real estate market was red hot. It didn’t take much effort to sell a home in those days, so discount brokerages could offer much lower listing fees than traditional agents and brokers. It seemed like a viable business model until the bubble burst. After that, it became more difficult to sell real estate and the traditional agents benefited because they were better equipped and trained to conduct a sale that would require more time and effort. Not many discount brokerages survived the major downturn of the real estate market.

However, the market has definitely heated up a lot in recent years and it’s been a seller’s market for some time now thanks to a perfect storm of low housing inventory and low interest rates. Listings are selling quickly again and thus you are seeing more and more discount brokerages sprout up to take advantage.

Advantages of Traditional Brokerages

The single biggest reason anyone would choose a discount brokerage is because they want to save money. However, with lower cost also comes a potential for lower quality of service and expertise. And if you don’t get the house or sell the house, then the commission didn’t matter in the first place. Traditional agents will have more training and resources to increase exposure for a property beyond just the “basic” services. This could result in a higher sales price that negates any commission discounts.

Here are some of the pros of working with a traditional Realtor (and consequently, cons of discount brokerages):

  • Extra Services – Most traditional agents will go beyond just the basic marketing services in order to maximize exposure for the listing. Things like professional photography and great property descriptions can help set your listing apart.
  • Expertise – Discount brokers tend to attract newer agents who may not have as much expertise as a traditional agent. A good real estate agent or broker will have strong negotiating skills, be an expert with contracts, have a solid reputation in the marketplace and have access to great resources.
  • Contract Flexibility – The sales and commission structure is pretty well locked in with a discount brokerage like Redfin, whereas a traditional broker will offer more flexibility (especially if you are dealing directly with a broker/owner). Commissions, inspection fees, marketing expenses, cleaning/repairs, rebates, home staging and other services can be negotiated. A custom contract can be prepared to help you get the most out of your specific situation.
  • Personalized Service – Most discount agents are dealing with a larger quantity of clients at any given time. A traditional agent/broker will be able to provide you with more personalized service and response to your needs.

Are you going to be buying and selling this year? Samantha Merritt provides quality and custom services to meet all of your real estate needs.