When it comes to real estate, the bottom line for most people is simple – doing what is needed to get the best rates and price possible is a must. That’s why discount brokerages get so much attention – they promise to save money. But do they? Is it best to work with them, or do they fail to live up to what they promise?
What Are Discount Brokerages?
With any real estate transaction, those who are involved will end up paying closing fees. These closing fees include commissions that are paid to the buyer's and sellers' real estate agents. Generally, these rates are x to x percent of the overall fee.
But with a discount brokerage, the promise is to offer lower rates – this is due to a broker negotiating to give a certain percentage to the selling agents and keeping the rest for themselves. They also offer lower listing fees and reduced commissions.
Are They Right For You?
While at first glance these lower costs sound great, the old saying that you get what you pay for really shines through in a big way. Remember that any type of real estate transaction is often confusing and complex – well beyond the realms of the average person’s capabilities.
Brokers are there to work for you, and to make sure that you get the best price for a home, the right home for you, and that you are confident going into closing. But when you use discount brokerages, you get little help from the realtors.
This applies to those who are buying as well as those who are selling a home. Buyers end up having to do much more of the house search, research, and negotiating themselves and may even struggle just to talk to an agent. Sellers often work harder to sell their homes than their discount brokers.
The Bottom Line
Discount Brokerages may indeed offer some cost savings. But, the reality is that when you want your property transaction to go smoothly, it is usually in your best interests to make sure that you have a professional real estate firm on your side.
This way, you can relax while the hard work is handled by the pros and you can go about your day. It may cost a small bit more to enlist a real estate firm, but the money is a wise investment that pays off in more ways than one.