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Sally English's Blog

By Sally English | Agent in 30345

The Real Story on Discount Brokers

Writing about the competition is rarely a good idea.   But I have heard so many radio commercials lately I have decided to shed some light on claims made by a discount real estate brokers.

I have heard claims like

“I saved 7%” in real estate commissions by using XXXXX.”  Or, “XXXXX helped me sell my house and I saved $10,000”

Pardon the French but those claims are pretty much bull manure.  It reminds me of a friend who travels to various casino locations for vacations.  We hear a lot about how $500 was won in one hand of blackjack and how $300 was won one morning before breakfast.  What we never hear is how much was lost.  Yes, we know your hotel room was comped and you never had to buy a meal the whole time you were there, but how much did you lose after wining that big $500 hand of blackjack? What was your net gain or loss for the weekend in Vegas.


Anti-trust laws helped open the real estate brokerage business to competition.  There was a time when Brokers perhaps conspired to set commissions at a certain level.  Here in Atlanta, a commission of 7% was “standard” and Brokers knew they were safe in quoting a 7% commission on the listing of a home for sale.  They knew other brokers would not undercut them.  It was also standard for a selling Broker, the person hauling a buyer around in their car for a couple of days looking at houses, to receive half of that commission as a “co-oping” broker.

Fast forward to today.  Commission fees are all over the place.  Some real estate brokers list a home on the MLS for a flat fee, as little as a couple hundred dollars. They are often referred to as “discount brokers.”  Other real estate brokers charge a lot closer to the old 7% “standard” fee and they are known as “full service” brokers. It is up to the individual broker and the client they are negotiating with to determine an acceptable commission rate on a real estate transaction.


Any broker who is a member of an MLS can list your home for sale and correctly claim to have exposed your home to a wide array of potential buyers.  Listing a home on the MLS would be the absolute minimum I would expect from any savvy home seller in today’s marketplace. Many “flat fee” brokers fall into this category.

Discount brokers go a step further, they list the home in the MLS service and also market the home through various Internet portals like Realtor.Com, Trulia and Zillow.  All these Internet portals put your home in front of thousands of potential home buyers.

Full service brokers typically go a step further.  You are going to pay more in fees because you are hiring someone with more expertise in the marketing process.  What you are paying for is the knowledge and experience a full service broker has about the micro market that is the neighborhood your home is located in.  Who cares what homes are selling for in Forsyth County if your home is located in the Hawthorne Elementary School district on Cravey Drive.  What you need is a broker who has walked through the rooms of a house that sold on Cravey drive six months ago and knows that the home that sold for $20,000 less than you plan to list for DID NOT have an updated master bathroom.  You want to full service brokers knowledge of the local real estate market to give you the maximum leverage in negotiations with potential home buyers.


If you list with a discount broker, potential home buyers, potential “selling brokers” representing buyers and your Aunt Edna all know there is some flexibility in the price because you are “saving” money on the real estate commission.

In negotiations, all parties are going to seek to exploit any “soft” areas of the deal.  The discount brokerage sign in your front yard speaks volumes to those who intend to drive a hard bargain at the negotiating table.  They know there is money on the table and they plan to take at least their share of it in contract negotiations.

And negotiations do not stop after a contract is signed.  In the current economic client, negotiations continue until a check is given to the seller at closing.  Thousands of dollars are chipped away from the sellers bottom line by savvy buyers and buyer’s brokers.


Rather than focus on the commission structure, most sellers should consider how much money they will net from the sale after all expenses have been deducted from a negotiated sales price. The most important element to most sellers is how much cash was wired into their checking account at the closing.  The discount broker implies you will net more because your commission expense is lower.  A full service broker implies your net will be larger (even with a higher commission expense) because their wisdom, expertise and knowledge will transfer to a better negotiation of the entire package.


Sally English and The English Team at Realty Associates of Atlanta offer a negotiable commission structure.  Our expertise and knowledge of the local market is unsurpassed, so we can (and do) charge a commission fee that is near the top of the market.  Our track record is excellent and we have plenty of satisfied customers who refer us to friends and family.  These clients felt they had more money in their checking account after the sale because of the expertise we brought to the marketing and negotiation table. Many full service brokers charge less commission.  All discount brokers will work for less.  But, no broker has more to offer than Sally English and The English Team in the micro-markets we call “home”.


By Isabel Elsesser, R.E. Pro,  Mon Sep 3 2012, 17:59
Well Put and I am also a full time Realtor since 1993.
You get what you pay for with a discount broker!

I do not need to do a commerical on the radio businese I have a referrals from past clients.

Isabel Elsesser, Realtor
First United Realty
Save Time & Money!
Direct 770-307-8751
Fax 888-799-3184
Over 28 Million SOLD
By Kirsten Conover,  Mon Sep 3 2012, 21:53
Sally-soooo true! We full service realtors know there is WAY more involved in our jobs than putting a sign in the yard, and the listing on the mls and a few websites. To be honest, as a busy, full-time realtor, I'm always crossing my fingers my buyers won't pick the house that's listed with a discount realtor--it's much more work for me! I now have to help my buyers AND help the sellers get through their inspection, their appraisal (one seller actually thought the assessed value listed on the county tax record was what her home would appraise for with a bank appraiser!)

Just like people that try to sell their homes by owner, these sellers will never know how much more $$ they COULD have made, and how much sooner their house may have sold, with the increased exposure our marketing and service provides....in fact, I've gotten lots of clients from sellers that were not successful using a discount broker--you do get what you pay for!

Kirsten Conover
#3 Agent/Midtown 2011
Prudential Georgia Realty
404-386-1103 Direct
By Kerry Lucasse,  Tue Sep 4 2012, 09:25
So true, Sally! I dread showing properties that are listed by discount brokers.
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