May. 4, 2007
Last Modified: 5/2/2007 11:14:07 AM
You may have seen those "You Keep the Commission" billboards around metro Atlanta. They are paid for by real estate companies offering a-la-carte services. These so-called "discount agents" have become very popular as the housing market continues to cool.
So the bottom line is, if you want a full course menu of services and someone to wait on you -– hire the commission-based agent. If it is just as peachy for you to do the leg-work yourself and save some green along the way – give the discounter a shot. You can always hire the traditional agent later if you fail to sell your home the new-fashioned way."
This article doesn't really do much to shed any light on the real going ons in the market, it's really old news. They show that 30% of listings are now with Discounters. There's no data on what was there before flat fee became available. Agents have been doing this for years (cutting commissions). What would be more telling is that if the number of FSBOs went down. Where's the Freakonomic guy when you need him?
What's important to not is that in Atlanta 90% of the FSBOs will list with a Real Estate Company. Additionally, 90% of the FSBOs that do sell are sold to investors and 88% of those offered a buyer agent commission.
Furthermore, discount brokers are able to capture half of that 24% loss when helping the seller sell their home. While full service companies are only giving up 3-5% total off the asking price. When you calculate the commissions into all, this is the breakdown:
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FSBO - Net 74% of asking price
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Discounter - Net 88% of asking price
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Full Service - Net (including commissions) 90% of asking price
The real AHA here should be while opinions can differ on what agents do before the sale, it's the negotiation skill that's worth the big bucks. Bottomline, anyone can make a flier, but an experienced, skilled negotiator is worth their commission.
What's it mean? A full service agent (a real FULL Service agent - one that fulfills their promises) will net the seller more at the end of the day.