The 5 Most Common Complaints from Home Sellers who Used Discount Brokerages

Dated: March 31 2021

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And why choosing to work with a full-service Realtor can mitigate a painful selling experience

Discount brokerages: you’ve seen them. They lure home sellers with shouts of

  • We sell for less!

  • Sell your home in 3 easy steps using our app!

  • Use our flat-rate commission!

I understand that all of this shouting can be really tempting for home sellers who just want to make the most they can from the sale of their home. And I understand that many home sellers see hiring a full-service Realtor as spending money they don’t need to spend. I want to take you past the shouting and plainly state that while the job of a Realtor may look easy and sounds like something that isn’t worth paying for, a lot of what happens in your real estate transaction occurs behind the scenes. And it can get complicated and messy And that’s when you need your Realtor working on your behalf...a REALLY GOOD REALTOR.

What your grandma told you is true: You get what you pay for.

Yes, there are lots of companies that really will sell your home for less, offer you a below-market flat selling fee, or give big discounts and rebates if you use them. The reality of this is that these discounts have to come from somewhere: The marketing, the services, or the agent themselves. And the bottom line for you, as a home seller, is that these companies are not built to do everything they can do to sell your home for top price while providing you with the best experience. They are just built to get your house sold for the lowest commission rate. Period.

Using a full-time, full-service realtor is the best choice for selling your home. Statistics from the National Association of Realtors (NAR) show that clients who retained a realtor as their fiduciary during the sale of a home, sold more quickly and for more money (NAR, 2021).

Here are the five most common complaints we hear from home sellers that used discount brokerages, and most (but not eXp’s!) instant offer programs.

1) There is no single point of contact, and sellers felt  ‘passed around.’

Selling your home is an enormous undertaking, and you are going to want one primary point of contact; a full-time, full-service Realtor who’s phone number is on speed dial in your phone. If something goes wrong, you call them. If you have a question, you call them. If you need something done, you call them. They are with you every step of the way, until you turn your keys over at closing.  When you work with a full-service Realtor, you are a person. With a name (and probably even a nickname). A full-service realtor will know the names of your kids, your significant other, and your favorite taco joint. In many of the discount brokerages, you are just a number, a transaction file, and someone to process. Many home sellers find this disheartening and confusing, and the process can be ripe with miscommunication and misunderstandings.

2) A lack of transactional support, which means big problems when there are problems

Real estate is rarely a smooth proposition. Things get complicated and go wrong. When this happens (and it’s bound to happen), a full-service realtor is going to be in constant communication with you, the client, and whoever is involved with solving your problem. Unfortunately, a seller who’s working with a discount brokerage is just a number in their system and gets passed around, wondering who to talk to. The discount brokers often leave a lot of this to chance (or to bullet points and a tutorial video). This lack of communication and transactional support often makes problems even worse for a seller, and sometimes deals will even fall apart.

3) Driving a seller to close rather than driving for the highest and best sale offer

One of my primary fiduciary responsibilities is “client care”.  That means that as a realtor, I need to represent my client, above all else. Sometimes, it leads to spirited conversations, negotiations, and wheeling and dealing with the buyers’ agents. These spirited interactions are all in the name of that ‘client care’ piece I mentioned and representing my client above all else. Discount realtors, often detached from their clients, don’t truly embody the spirit of client care. They just want to get the deal done, there is no motivation to negotiate upwards, and often this literally comes at the expense of the seller in the way of a lower sales price. 

4) Buyers agents avoid discount brokerage listings, which means many potential buyers won’t ever see a seller’s home

Discount brokerages often cut costs, as I mentioned, by saving money here and there.  In addition to slashing a seller’s fees, the brokerages will also recommend that a seller cut commission paid out to a buyer’s agents. That means that agents will be less likely, in many cases, to show your listing. Why should they show it when the commission they might make on it is much lower than the commission they would earn from sending their buyers to a listing that offers a standard commission rate? And fewer showings means fewer buyers, which in turn, drives down your potential sale price. Not good.

5) The lowered commission rate doesn’t make up for the money lost with a lower sales price

The National Association of Realtors posted these stats on their website: For Sale By Owner (FSBO) homes accounted for 8% of home sales in 2018. The typical FSBO home sold for $217,900 compared to $295,000 for agent-assisted home sales. In other words, home sellers save money on the front end, but lose it on the back end with a much lower net profit.

This same thing happens with discount brokerages, as well.

Just like grandma said, remember? You get what you pay for.

Make your grandma proud. Make the most money. Have the best experience. Use a full-service, full-time realtor for your next home sale. Call me today.

Blog author image

Chuck Gollop

Licensed Realtor, Stand-up Comedian, and Retired Police Sergeant. I took my 25 years of law enforcement experience, threw in my experience as a stand-up comic and college teacher, and used those ideal....

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