We often hear television commercials advertising selling your home for as little as a 2% real estate commission instead of the traditional 6 or even 7% in some markets. The reality of those offers is that what they are doing is simply listing your home for sale with the multiple list agency in your area. And, then just hoping that a buyer comes along.
Since real estate commissions are usually split between a listing agent and a selling agent if the commission is 2%; that would mean that each side would earn just 1% of the sale price of the home. If the listing agent and the selling agent are the same person, they would keep both sides of the commission. This 1% is then split between the agent and his or her managing broker. If the agent is also an independent broker, he or she may be able to keep the entire 1%. But here is the problem. Why would any real estate agent show your home, when he can show the one down the street that is paying a full commission.
In essence, if you list your home for sale through a discount broker, you are basically doing a for sale by owner because there will be very little service provided for so little money. Real Estate agents earn their money. They make sure that the potential buyer is pre qualified for a mortgage if the deal is not all cash. They don't waste time on looky lou's, people who just want to tour your home with no intention of buying it. They manage the negotiations to get you the best price possible because their earnings are predicated on the sale price. And, once you do have a signed purchase agreement, the real estate agent deals with any problems that come up during the escrow period to make sure that the sale is closed and you get your money.
At Paragon, we work with clients to sell and buy homes are all over the country. We work with the best real estate agents and brokers in the nation committed to providing high quality services to achieve the best sale price for our clients. Discount real estate agents and brokers are just looking to earn a quick buck. It may be possible in some cases in a seller's market. It is definitely not possible in a buyer's market market when it takes hard work to sell a home.
