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What Is a Discount Real Estate Broker?

Discount brokers offer lower commission rates to sellers, but vary in their fee structures and the range of services they provide.

There is always a cost to selling your home, including the commission paid to your real estate agent. While listing agents typically charge between 2.5% and 3% of the home’s sales price for their services, brokerages that promise to sell your home for significantly lower fees have become more popular in recent years. By understanding the nuances of what an agent at a discount real estate brokerage can offer you, you can decide if this path is right for you and your home.

What is a discount broker?

While real estate agents and brokers are similar, there are important distinctions. Real estate agents assist and guide their clients through buying and selling their homes, while brokers have undergone additional training and licensing that enables them to oversee other agents. Both agents and brokers can work for brokerages, though brokers can also work independently.

A discount brokerage uses the internet to connect sellers with agents willing to accept lower rates, usually in exchange for a larger volume of clients. The level of savings and the payment structure you can expect as a seller will depend on which brokerage you choose.

How discount brokers get paid

When comparing your options, be aware that the traditional 5%-6% commission is typically split between the buyer’s agent and the listing agent. So if you go with a low-commission listing agent, you may also be responsible for a separate buyer’s agent fee.

For example at One Percent Real Estate, we offer a 1% listing fee to sellers. This doesn’t include the buyer’s agent fee, which is often around 2.5%-3%.

This would mean that you would pay closer to 3.5%-4% of the home’s sales price in total commission, which could still represent thousands of dollars in savings compared with traditional commissions.

It’s important to ask about the details when comparing offers from potential agents. One Percent Real Estate provide the full range of services you’d receive from a traditional agent at a reduced fee.

Determining if a discount broker is right for you

Researching company websites, searching for consumer reviews and learning about your local market conditions can help you make an informed decision about working with an agent from a discount brokerage.

Depending on what you’re looking for, you can search for terms such as “discount real estate broker,” “discount real estate agent,” or “flat-fee real estate agent,” plus your location.

Compare rates and payment structures

When comparing possible brokers, you’ll want to calculate their fees versus the traditional 5%-6% commission.

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