Home Selling in Saint Louis>Question Details

Brad Elsner, Real Estate Pro in SAINT LOUIS, MO

It seems like a discount broker is like having somebody sell your home for minium wage??

Asked by Brad Elsner, SAINT LOUIS, MO Mon Oct 27, 2008

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To clear things up I never said that a single agent sees the entire 6%, my point was that the home seller sees the full 6% from their bottom line nearly every time.

Also I never said that real estate agents generate unlimited wealth. My beef is with the structure of the commission system. The sale of a $300,000 house should not force a seller to dish out 30 times as much money as he would pay if his house was to sell for $10,000. Real estate professionals should determine the cost of selling a house and charge a flat fee regardless of the sale price, and that is exactly what discount brokers have started to do.

Also, someone mentioned the blackballing of discount brokers, doesn't that violate the Realtor code as well as one or two laws?
1 vote Thank Flag Link Thu Jan 29, 2009
Sometimes you get what you pay for ,sometimes you get more and sometimes you get less. Not all full service agents provide great marketing or customer service and some discounters have years of experience and a comprehensive marketing plan. Interview both types of agents, Ask how they market the home, what they do and do not include in their fees and what they offter to other agents who show your home (unless you are OK with not having your home available to the 100s of local agents working in your community) then decide which you feel will work best for you.
Web Reference: http://wwwJustCallJo.com
1 vote Thank Flag Link Wed Jan 28, 2009
There are a lot of Idiots out there!
1 vote Thank Flag Link Tue Oct 28, 2008
What's her name?

P.S. I take back my previous comments. Implicating discount brokers in the foreclosure crisis was out of line. However, it is disturbing that in Missouri we have a list of services that all brokers are required to perform and I've found that a lot of discount brokers just collect a fee, put the house in the MLS, and then they are done (leaving the sellers to fend for themselves).
0 votes Thank Flag Link Wed Oct 14, 2009
Every once in a while a blind squirrel finds a acorn! Congrads!
0 votes Thank Flag Link Wed Oct 14, 2009
We recently listed our house with a discount broker. Before going this route, we interviewed two full commission brokers. Not only did the discount broker suggest a higher price for our property (still a realistic price for the market we're in) but she was more professional.

Our house went under contract 16 days after being listed, our agent helped us with the entire negotiation/inspection process, and we closed on the home within 7 weeks of listing. Not only was our selling price higher than than either of the two full commission agents were going to list the property for but we saved several thousand dollars in commissions.

We were very pleased with the service our agent provided from start to finish and would recommend her to anyone.
0 votes Thank Flag Link Wed Oct 14, 2009
Don't let real estate professionals scare you away from negotiating a lower commission. The fact is, discount brokers provide alternatives for home sellers. As with any other profession, you need to decide what services best meet your needs and then do research to get comfortable with selecting a broker. The notion that the rate of foreclosures is related to discount listing services is absurd, total nonsense. Keep in mind it will be the price, the location, and the condition of your home that will determine how fast your home sells. You want to attract the largest possible pool of buyers to your home, so marketing strategy is important. Notice that price is most important. Obviously, you have much more flexibility when you know going into a transaction that you are paying a discounted brokerage commission!
0 votes Thank Flag Link Sat Oct 3, 2009
Good post Brad. I agree with you. It is amazing how so many of the discount brokers have closed up shop. I wouldn't have wanted to have purchased or sold a house with a discount broker in the last couple of years and have some kind of problem with the house now. I am guessing that a lot of the foreclosures out there are homes that were sold or purchased through the help of discount brokers that had very little experience or training in the business.
0 votes Thank Flag Link Fri Jan 30, 2009
Why would you let an agent sell your home who can't even negotiate their own commission??? If they give away the farm on their OWN commission, how do you think they will do when negotiating the sale of YOUR big investment?? Food for thought............
Web Reference: http://www.PeteElsner.com
0 votes Thank Flag Link Thu Jan 29, 2009
John,My Dad was in realestate for over 53 years. Let me pose this question to you? In your current job do you feel you are being overpaid? Not many people feel that they are. Unless of course you are an athlete. Some people cant afford full service because of their financial situation and most Realtors understand that. Just like everybody else fees have gone down and expensives have gone up! Stocks in my opinion as a buyer you have no control over what so ever. Houses on the other hand our peoples personal castles and cant be taken lightly and are very tangible. I have a full time licensed assistant that spends 8 hours right from the start to market one of my homes. Truly you get what you pay for. Some consumers are savy such as yourself and others such as myself would rather go to Jiffy Lube and have my oil changed by a professional and not worry when my car breaks down and the manufactor wont cover the expense because I didnt have a professional work on my car and thought I saved money by doing it myself. Spend one day with me and I bet you would have a better understanding of what I go through. Most people wouldnt have our jobs for love or money. I get one day off a year and thats Christmas. Sometimes that doesnt even happen. I sacrafice my time to help other people live their dream of home ownership!
0 votes Thank Flag Link Thu Nov 20, 2008
Hi Brad, I apologize if I was abrasive in my earlier post. I misread your post as implying that buyers who go with a discount agent are idiots, when in fact you were referring to discount agents.

I still maintain that discount agents are the wave of the future. Take Redfin for example, their website is here: http://www.redfin.com/home. They are an extremely successful example of a streamlined low cost agency that benefits the real estate market. While many people wouldn't pay a dentist 5 dollars for a procedure, they consistently pay brokerages such as Scottrade, ETrade, etc, 5-7 dollars to sell investments with value that far exceeds any equity they may have in their homes. 10 years ago nobody would dare make a stock sale outside of their full service and expensive brokerage, but the discount brokerage model slowly crept onto the scene and the market as a whole is much better and more efficient for it.

Cartel-like laws artificially keep commissions high but the change to low cost real estate brokerages is imminent and should be embraced by Realtors since it will unequivocally be embraced by sellers and buyers once laws are reformed.
0 votes Thank Flag Link Thu Nov 20, 2008
I think it is worth taking notice that many people have a basic distrust of Realtors - and that this distrust leads to people listing (and only sometimes actually selling) their home with the cheapest agent who comes along. While I think this is an example where a few bad apples spoil the barrel, you'd be hard pressed to find someone who hasn't heard a 'real estate horror story' where the Realtor ends up taking the blame.

Maybe the best way to combat this problem is through testimonials. If you can produce quotes from clients that focus on the irreplaceable service you provided as the seller of their home, it might help to prove what you have to offer. Also, bringing up a few horror stories may actually help. It's probably useful to demonstrate that there are oftentimes unexpected problems that come up and that sellers NEED experienced professionals to navigate the process.

I don't know how much the use of discount brokers has effected the market overall. BUT, I know as a lender that when I'm working with one on the other side of the deal from my buyer, things move very slowly and sometimes not at all.
0 votes Thank Flag Link Wed Nov 19, 2008
John Home Buyer...Just curious...what is your line of work?
0 votes Thank Flag Link Mon Nov 10, 2008
Dear John home buyer, When you list with somebody who would work for 100.00 to sell your biggest investment that would scare me! I wouldnt let some Dentist that wasnt successful pull my tooth for 5 Bucks. One of the biggest discounter in the United States went out of business this year. What does that tell you! When your Realtor calls you at 8:00am on a Sunday Morning to tell you have gotten the home when they should be at church with their family that then you will see what Iam talking about. Happy House Hunting
0 votes Thank Flag Link Sun Nov 9, 2008
You get what you pay for....and no one knows their own value better than a discount broker.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sun Nov 9, 2008
The Hagley G…, Real Estate Pro in Pleasanton, CA
Real estate is a business, plain and simply. A discount broker can only pay his bill if he has volumn listings. There are many flat fee / discount services, some charging just 100.00 bucks to list your home on mls.

simple fact is, you gotta list a hellava lot of properties to make money just on the listing side...

Many discount agents are also blackballed by other agents. so sellers should pay careful attention to who they hire to sell their home.
0 votes Thank Flag Link Sun Nov 9, 2008
Discount brokers are the wave of the future. With the internet age upon us the playing field has been leveled and a normal guy off the street has just as much access to real estate data as any realtor. The MLS is a racket that will eventually fully crumble. Charging a homeowner 6% of the price of a home with no cap is absurd and that is the reason that discount brokers are making money. And what is wrong with minimum wage, or "minium" wage as you call it? The qualifications to sell a house are similar to the qualifications to sell burgers at a fast food place so I believe minimum wage is indeed a fair wage if we are going to compare apples to apples. Sorry to vent, but you're initial vent needed to be addressed by a non-realtor.
0 votes Thank Flag Link Sun Nov 9, 2008
Sorry I don't mean references from the agent, I mean references from your friends, family business partners who can refer/recommend a good agent.
0 votes Thank Flag Link Tue Oct 28, 2008
I'm not a strong believer in references provided by the agent.

After all, if you ask an agent for references, s/he's only going to give you the names of people who are going to tell you that they "walk on water". They're not going to give you the names of people who were anything less than super-satisfied with their performance.
0 votes Thank Flag Link Tue Oct 28, 2008
Alan May, Real Estate Pro in Evanston, IL
Sorry to hear that about that agent. In any profession there are goods and bad ones. The good news is they make the rest of us look pretty good!
0 votes Thank Flag Link Tue Oct 28, 2008
Silva is right..some agents should be flipping burgers and they give the rest of a bad rep! Most FULL-TIME agents, and that is important, rely on great customer service and getting the job done to pay our own bills.
Sorry you had a bad experience...but like in any industry there are good in bad. Best Tip: get references and don't go for the lowest commission.
0 votes Thank Flag Link Tue Oct 28, 2008
I think real estate is a business where you truly get what you pay for, in regards to marketing. Seems a little odd to me that they wouldn't want to market more and make the commission off the sale and not just the fee they charge to put it in the MLS and a sign in the yard - guess they only want the easy money. When you use a broker that represents your best interests, they are only paid if they succeed in selling your home - that's an incentive to market. Sometimes with discount brokers all you seem to get is more days on the market and no sale - scaring off many potential buyers who wonder what is wrong with the home that it has that many days on the market. . They do little or no marketing and if they are a transaction broker they don't even represent the best interests of the seller or buyer - they only represent the paper work - seems a little scary to trust one of your most valuable investments/possessions to this type of brokerage.
Web Reference: http://www.TerryWillis.net
0 votes Thank Flag Link Tue Oct 28, 2008
It's interesting you use the word, "sell"...A discount broker does no selling and usually no consultation...which is what an agent does when selling a property. The name is discount broker for a reason....
Are you a real estate pro?
0 votes Thank Flag Link Mon Oct 27, 2008
I beleive that you truly get what you pay for. It is a tough market and you need an agent that works hard and knows how to get homes sold in this type of market!
0 votes Thank Flag Link Mon Oct 27, 2008
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