Considering Discount Real Estate Brokers to sell your home in this HOT Sellers Market?
Do lower fees outweigh reduced services and potentially lower sales price?
The Pacific Northwest and Portland Oregon are currently experiencing an unusually hot real estate market. Like many parts of the country, inventory of available homes is at or near all time lows. We are deep in a seller’s market. The median days a home is on the market in Portland is currently 5 days. Because there is such high demand you may be considering discount real estate brokers to save money. This article reviews the fees, savings and costs when working with discount real estate brokers.
Sellers in Oregon typically pay the real estate brokers commissions. Full service real estate brokerage fees range from 5–6% in the Portland Metro. Seller’s (or listing) agent fees range between 3.5–2.5%, with the buyer’s agent commission around 2.5%.
The seller’s agent pays out of pocket for marketing including professional photography, drone images or videos, print flyers, postcards, signage and more. Your seller’s agent should present your home in the best possible light to gather the most interest through their marketing.
Discount real estate brokers offer lower brokerage fees as a sweetener for you to work with them. Their brokerage fees range from 3–4%. They typically accept a lower commission as the listing agent and set lower fees for buyer’s agents.
Since they are receiving lower commissions, discount brokers often cut costs on marketing their clients’ homes. Professional photography is offered as an add-on fee or replaced with agent-taken photos (see example of difference above). Drone photography is rarely used. Print media, if any, is low quality. Post cards to mailing lists of potential buyers does not happen. Poor photography and marketing captures less potential buyers and quality offers.
Some buyers’ agents may be less willing to show properties with discount commissions to the buyer’s agent. Interested buyers could be persuaded by unethical agents to view other options. In other words, reducing the pool of buyers viewing your ‘For Sale’ home.
An often overlooked cost to working with discount real estate brokers is their incentive to sell the property quickly. They are getting paid less and want to sell the property as soon as possible, with the least amount of work. Recommending a low market price could cost their clients thousands. Relying on Redfin or Zillow Zestimates to price a home is not thorough market analysis.
Selling a home requires a lot of communication and coordination with the listing agent. After signing a listing contract with discount real estate brokers you may rarely speak or correspond with that agent again. Sellers can be instructed to interact with office managers or assistants. Agent communication from online companies is typically poor due to low pay, high volume and turnover.
Discount brokers rarely have their listings staged. It’s harder for buyers to understand how to live in the home. Open houses may be held by unlicensed hourly employees that don’t know the particulars of the home they are hosting. Buyers’ agents calls may be unreturned for details important for buyer offers. Once in contract, communication for contingency timelines and repair negotiations can cause offers to fall through.
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You may save 1–2% in fees with discount real estate brokers but forego thousands elsewhere. Your home may be marketed poorly or priced incorrectly. Fewer buyers may view your home leading to less offers. Communication and negotiations can suffer leading to a stressful and unsuccessful transaction. In most cases, using discount professionals often leads to less desirable results and more headaches.
Josh helps sellers prepare their home to be the most marketable to earn top dollar without the stress. If you’re considering selling your home Josh can help. Contact him todayfor a consultation or other real estate related questions.